GSPartners
|
|
|
|
Volume XVI | No. 21 | July 24, 2008
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
5.00%
|
1 Month LIBOR
|
2.46%
|
5 Yr US Treasury
|
3.44%
|
5 Yr Swaps
|
4.40%
|
|
12-MAT
|
3.08%
|
3 Month LIBOR
|
2.80%
|
10 Yr US Treasury
|
4.07%
|
10 Yr Swaps
|
4.83%
|
|
11th Dist COFI
|
2.92%
|
6 Month LIBOR
|
3.11%
|
30 Yr US Treasury
|
4.64%
|
|
|
|
| | | Transaction Description: | | $4,650,000 (70% LTV, 9.25% Debt Constant) for the Refinance of an Office Building in West Los Angeles, CA. GSP secured financing for a very experienced property owner/developer for the refinance of an 85% occupied office building totaling 18,616 sq. ft. in West Los Angeles, CA. |
Challenge: At the time GSP began marketing the transaction, the property was only 50% occupied. In addition, all tenants are on short-term leases. |
Solution: GSP worked with the Borrower to improve the property’s marketability and identified a lender able to offer an extremely competitive floating-rate quote with a 5 year term. The lender also offered the option to fix the rate at the same spread over the 5 year Swap Rate. GSP gave the lender comfort by providing market rent comparables proving that short-term leases are in line with the small suite sizes at the property.
|
| |
|
| | | | Boutique Private Equity Shop Offering Mezzanine Financing and Preferred Equity on Major Product Types in the Western US. Will consider projects with below breakeven DCR if the real estate is good and there is a good reason for the lack of NOI. All major property types. Target yield in the low to mid teens. Prefer 3-5 year terms, but will go as short as 2 years and as long as 10 years. | | Transaction Size: $1-10M | | Rate: fixed or floating, 12%+ | | Loan Term: 2-10 yrs | | Amort: I/O available | | Max LTV: 80-90% | | Min DCR: will go below breakeven | | Non-recourse | | Prepayment: flexible | | Fees: 1-2% | | Geography: Western US |
|
|
| | | Interest Rate/CMBS Update | Treasuries have been volatile this week. There is reason to sell based on: A Fed governor’s comments that rates must rise to combat inflation and a housing bill in congress that should bring about more investor confidence in mortgage backed instruments (due to a more explicit government guarantee for Fannie Mae and Freddie Mac paper). This should drive investors out of the “safe haven” of treasuries. There is reason to buy based on: tumbling oil prices (less inflation) and more data indicating the US housing market is still nowhere near the bottom. The 10 Year has bounced between 3.90% and 4.16%, Thursday morning it is 4.06%. Credit Spreads: CMBS widened over the past few weeks and new originations today are at approximately 8.00% among the few originators quoting. Borrowers have other options in the sub 7.00% range with various portfolio lenders. Stay tuned… (David R. Pascale, Jr.)
| | | Speakers Corner | July 31, 2008
Thursday, 7:00 am - 5:00 pm
Panel Topic: State of the Market - Roundtable forum discussing trends and emerging valuation issues impacting Real Estate Markets.
Participants Include:
1. Greg Harris, The Harris Group/Marcus & Millichap
2. Jim Myers, Cushman Wakefield
3. David Zoraster, CB Richard Ellis
4. John Ellis, Integra Realty Resources
5. Christian Lawrence, George Smith Partners
6. Michael Warner, George Elkins Company
Cerritos Sheraton Hotel
12725 Center Court Drive
Cerritos, CA 90703 | | | 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. |
|
|
|
|
©2008 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
