GSPartners
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Volume XVI | No. 15 | May 15, 2008
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KEY RATE INDICES
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Prime Rate
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5.0%
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1 Month LIBOR
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2.50%
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5 Yr US Treasury
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3.14%
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5 Yr Swaps
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3.96%
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12-MAT
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3.53%
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3 Month LIBOR
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2.72%
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10 Yr US Treasury
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3.87%
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10 Yr Swaps
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4.48%
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11th Dist COFI
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3.28%
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6 Month LIBOR
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2.94%
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30 Yr US Treasury
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4.59%
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| | | Transaction Description: | | $22,309,000 Non-Recourse, Permanent Loan for the Acquisition of a 204-unit, 588-bed Student Housing Project at the University of Texas. GSP successfully arranged acquisition financing for a student housing project built in 2007, adjacent to the University of Texas at Tyler. Amenities at this premier, trophy student housing project include tanning-beds, fitness center, pool and deck area, internet access, and a computer / study room. The Sponsor was Myron Lieberman of MHE Real Estate. |
Challenge: Not only were lenders skeptical of the unique product type with leases signed by the bed, not the unit, lenders were also hesitant to lend in a tertiary market at a school with a student population less than 10,000. |
Solution: GSP located a lender that was comfortable with this product type because of the sponsor and management company’s strong track record. While the University has low current enrollment, it is quickly growing as the University recently transitioned from a 2-year University to a 4-year University. The University has also purchased most of the surrounding land which is slated for new academic buildings to serve the growing enrollment. This new growth will continue to improve the already prime location of the subject asset. |
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| | | | National Bridge Lender Funding Larger Transactions. Eligible Property Types: Commercial properties (typically with "value add" opportunities) including multifamily, anchored retail, multi-tenant industrial, multi-tenant office, hotel, and manufactured housing. Acquisition, development or rehabilitation financing for transitional assets with upside potential. Emphasis on existing properties. | | Transaction Size: $10-100M | | Rate: L + 3.50-4.25% | | Loan Term: 2-4 yrs | | Amort: I/O | | Max LTV: 65-75% | | Min DCR: 1.0 | | Non-recourse | | Prepayment: Open | | Geography: Nationwide |
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| | | Interest Rate/CMBS Update | Treasuries yields have risen due to supply issues ($21 billion auction last week) and a stock market rally. There is some investor sentiment that the corporate profits will rally sooner than expected. This is causing a narrowing of bond spreads as investor’s appetite for risk returns. The 10 Year T closed near 3.91% on Wednesday. CMBS: A major originator indicated that “the 6 handle is back” as spreads have narrowed; a standard 10 year loan is priced at about 6.96%. Originators are “warily optimistic” as short-lived rallies last Fall and in January ended with spreads blowing out again. This time there is some sustained buying in the market with some bond classes being oversubscribed. Lenders and brokers are hoping this time there is enough stability to start meaningful origination again. Stay tuned.. (David R. Pascale, Jr.)
| | | Come Grow With Us | George Smith Partners is expanding its team of top-notch mortgage brokers. 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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