GSPartners
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Volume XVI | No. 9 | March 12, 2008
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KEY RATE INDICES
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Prime Rate
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6.00%
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1 Month LIBOR
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2.89%
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5 Yr US Treasury
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2.56%
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5 Yr Swaps
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3.50%
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12-MAT
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4.08%
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3 Month LIBOR
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2.87%
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10 Yr US Treasury
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3.53%
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10 Yr Swaps
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4.28%
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11th Dist COFI
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3.97%
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6 Month LIBOR
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2.74%
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30 Yr US Treasury
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4.45%
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| | | Transaction Description: | | $17,000,000 Bridge Loan for a Vacant Mixed Use Office and Retail Property. GSP arranged a $17,000,000 bridge loan for an 89,000 sq. ft. vacant office building with ground floor retail located on Van Nuys Blvd in Panorama City. The 1.49 acre site is improved with a six-story office building, two-story concrete parking structure (approx. 300 spaces) and attractive landscaping. The sponsors purchased the property vacant in 2005 and used a previous construction loan and significant borrower equity to make both structural and major cosmetic improvements, converting it from Class B to Class A with a spectacular marble and glass lobby. With the majority of the construction work now complete, and leasing activity starting to occur, the new loan was used to repay the original construction loan plus provide funds to facilitate the lease-up and carry of the property. |
| | Rate: 6 Mo LIBOR + 2.60% | | Term: 1 yr | | Amort: Interest Only | | LTC: 70% | | Prepayment: Open | | Recourse | | Lender Fee: 0.50% | Holdbacks: $1.4M interest reserve, $3.75M TI's, $1M leasing commissions, and $525K contingency
Extension Option: (2) 6-mo extension options (0.25% fee each)
Other: No floor or LIBOR cap required
Key Players: Andrew Levant,
Gilda Rivera |
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| | | | California Lender Making Business Loans to Business with Real Estate as Collateral. Lender underwrites business balance sheet and income. Therefore they are able to push proceeds above standard real estate underwriting if business profitability is solid. Aggressive pricing: Lender looks at what index will be worth at loan maturity to derive interest rates. Prepayment: While banks use a fully indexed rate (index plus spread) to determine prepayment, this lender only looks at the index. If index rises during loan term, borrower can reap positive gains from a prepayment. Loan is also “portable”, example: If borrower is selling the building and buying a new one, the loan can be moved to the new building. Loan also can be assumed by a third party without penalty. | | Transaction Size: $1-10M | | Rate: Fixed (over TCM) or Floating (over LIBOR), spreads competitive | | Loan Term: 5, 7, 10, (30 yr am) 15/15, 20/20 | | Max LTV: 75% | | Max LTC: 80% | | Min DCR: 1.25 | | Recourse | | Property Types: All owner-user, including condos | | Prepayment: Derivative | | Fees: Par | | Geography: California |
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| | | Interest Rate/CMBS Update | Credit markets cheered Tuesday morning’s injection of liquidity by the Fed. What made this different from other Fed moves is the ability of financial institutions to post collateral consisting of Freddie Mac, Fannie Mae and, interestingly, AAA mortgage backed securities. The stock market responded with its biggest jump in over five years. Treasury yields actually rose as investors left treasuries for riskier instruments. This is good news for credit spreads; CMBS narrowed 30 bps, Fannie Mae spreads should follow suit. Stay tuned… (David R. Pascale, Jr.)
| | | Speakers Corner |
Andrew Levant has accepted an invitation to participate as a judge for the International Real Estate Case Competition -- an annual event hosted by the Marshall School of Business at the University of Southern California. The week-long competition is held on the USC campus in Los Angeles and features oral and written presentations from teams of real estate students from some of the top undergraduate business and real estate schools in the world, addressing real-world real estate problems posed by leading practitioners in the industry. This year teams will be travelling from as far away as New Zealand and Singapore to attend the event, which will take place April 14-20.
| | | In the Press | GSP Senior Vice President Andrew Levant has listed a trophy multi-family property located in West Hollywood. The 20-unit Spanish courtyard complex is the recipient of numerous architectural awards since being built in 2002 and the property itself has a rich and storied history. Romancing the Courtyard is a feature article which appears in the current issue of “Multi-Family Professional”, an industry trade publication, concerning the sale of the property. For more information, or to request a sales brochure, contact Andrew Levant at 310-557-8336, ext. 126.
| | | Come Grow With Us | George Smith Partners is expanding its team of top-notch mortgage brokers – originators and assistants. We offer highly competitive compensation and an excellent environment in which to work, learn and be supported. GSP provides its employees with cutting edge market information, resources for identifying the best capital sources for each transaction, training opportunities and peer support whenever it is needed.
We invite you to consider a career with George Smith Partners. Please direct confidential inquiries to Stella Debibi, Director of Business Development and Recruitment, at (310) 557-8336, Ext. 103.
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©2008 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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