GSPartners
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Volume XVI | No. 24 | August 27, 2008
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KEY RATE INDICES
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Prime Rate
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5.00%
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1 Month LIBOR
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2.47%
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5 Yr US Treasury
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3.05%
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5 Yr Swaps
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4.04%
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12-MAT
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2.86%
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3 Month LIBOR
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2.81%
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10 Yr US Treasury
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3.79%
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10 Yr Swaps
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4.50%
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11th Dist COFI
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2.83%
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6 Month LIBOR
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3.12%
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30 Yr US Treasury
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4.40%
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| | “Navigating Rough Seas…Charting New Courses” | by Andrew Levant, GSP Senior Vice President
Since the beginning of the year, reports of turmoil in the capital markets have dominated the news. While many lenders, investment bankers and mortgage brokers have run aground, abandoned ship or simply headed for a safe harbor to wait out the storm, George Smith Partners has battened down its hatches and remains firmly on course.
Although the company’s 2008 year-to-date transaction volume is down as compared to recent years, GSP has nevertheless managed to post some impressive production numbers given the challenges with which the industry is faced. As of mid-August, GSP has closed over 55 real estate transactions totaling in excess of $600,000,000 with a variety of banks, life companies, credit companies, FNMA, private lenders, and a few CMBS originators.
YEAR-TO-DATE PRODUCTION HIGHLIGHTS
In 2008, GSP continues its success in representing its clients on a diverse array of property types and loan requests. To wit:
· 20 multi-family transactions totaling approximately $225,000,000 and consisting of both bridge and permanent debt, one equity investment and a ground-up construction loan.
· 20 office building loans aggregating $155,000,000 of both bridge and permanent debt.
· Four retail financings topping $35,000,000 in bridge and permanent debt.
· Three industrial properties combining for $25,000,000 of permanent and construction loans.
· One investment sale of a trophy multi-family property valued at $18,000,000.
· A $50,000,000 line of credit for a private hard money lender.
· $50,000,000 in interest rate swap transactions.
· Rounding out production were a hotel permanent loan; a $14,500,000 land loan; several single family estate home loans; a mobile home park; a movie theatre; and a dozen or so consulting assignments.
· Our current pipeline includes 50+ transactions in varying stages of application aggregating another $750,000,000.
In response to the restricted supply of fresh capital and the ever changing needs of our clients, GSP is adapting and expanding its mortgage brokerage platform with the launch of our “Lenders Advisory Services” division. Drawing upon its long standing relationships throughout the capital markets and forging alliances with a wave of new and existing opportunity funds, GSP is now actively engaged in representing borrowers and lenders on:
· Discounted Note Purchases.
· Loan Restructures.
· Project Recapitalizations.
· Select Investment Sale Opportunities.
· Lines of credit for receivables and REO portfolio acquisitions.
· Expert witness/litigation consulting.
In addition, GSP continues to forge alliances with many of the new and existing funds that are primarily focused on acquiring distressed assets. With CMBS effectively out of the market and commercial bank loan portfolios quickly reaching capacity, access to participating debt and large pools of equity will be the key ingredient to facilitate new investment opportunities.
Looking ahead, GSP is well positioned to help our growing client base weather the climatic changes in the market. We have in place an ideal mix of seasoned veteran finance professionals with decades of experience in all cycles of the market, an emerging group of well informed independent brokers, and an up-and-coming crew of young, highly ambitious analysts and junior brokers who benefit from the best hands-on training in the industry. In spite of the general slowdown in the market, GSP continues to offer its brokers the most generous commission splits in the industry. All of this has contributed to GSP recently being named “one of the best companies to work for in Los Angeles” by the Los Angeles Business Journal.
At a time when some in the business have been swallowed up by a merciless sea and many others appear stuck in a dead calm, George Smith Partners continues to forge ahead. We stand ready at the helm to take on your next assignment, constantly on the lookout to plot the best course that will provide safe passage to both familiar and new destinations. | | | George Smith Partners Named One of LA’s Best Places to Work | George Smith Partners has been recognized by the Los Angeles Business Jounal as one of L.A.'s 2008 top employers. The annual ranking recognizes GSP’s leadership, innovation and excellence placing the firm among L.A.’s elite for employee mentoring, competitive compensation structure and growth opportunities. GSP provides cutting-edge financing for today’s diverse real estate market and has made the grade through a proven track record of taking our top-notch mortgage brokers, originators and assistants to new heights.
GSP was honored by the Los Angeles Business Journal at a high-powered luncheon in August.
If you’d like to consider a career at one of L.A.’s best places to work, please direct confidential inquiries to Stella Debibi, Director of Business Development and Recruitment, at (310) 557-8336, Ext. 103.
| | | | California Portfolio Lender Offering Fixed or Floating Rate Financing for Commercial and Residential Properties. Reduced debt coverage loan programs (.80-.90 DSCR) for 5-15 unit apartment buildings.
STATED INCOME apartment loan programs for borrowers with FICO scores of 700+.
Processing and underwriting fees start at $1,100.
Commercial financing for restaurants, theaters, hospitals, motels/hotels, bed & breakfasts, health clubs, churches, retirement residences/assisted care facilities, mini-warehouse storage, auto repair facilities, mixed use buildings, office buildings, retail buildings, warehouse/industrial buildings, shopping centers, etc.
| | Transaction Size: $1-7M | | Rate: Apt: 5.50% + / Comm: 6.25% + | | Loan Term: 3, 5 yrs | | Amort: I/O | | Max LTV: 75% | | Min DCR: 1.15 | | Recourse Negotiable | | Prepayment: YM | | Fees: Par | | Geography: California MMAs |
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| | | Interest Rate/CMBS Update | This week Treasury yields are remaining on the low side (compared to recent months) as the 10 Year is 3.80%. This is due to recent “flight to quality” upon recent selling in the equity markets and spread widening in all types of credit bonds - corporates, mortgage backed, etc. The market has not reacted to the release of Fed minutes that indicate their next move will be to raise rates due to inflation concern. LIBOR has stayed put, but watch for it to rise with the Fed rates along with Prime. Credit Markets: The story for the past few weeks has been the GSE’s (Fannie and Freddie). The consensus was that the next step to resolving the credit crisis involved more direct government support (bailout?) for the two mortgage giants. This week, major analysts have opined that the GSE’s are sufficiently capitalized, at lease “through the end of the year.” Now some analysts are calling for a merger. Stay tuned… (David R. Pascale, Jr.) | | | Speakers Corner | September 8, 2008
11:00 am PST
Eric H. Better, GSP Vice President, will be Guest Speaker for the Sperry Van Ness National Hospitality Team’s conference call on September 8. He will provide an update on Hospitality and Capital Markets. SVN Brokers and invited Guests ONLY
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October 2, 2008
Thursday, 8 am – 5 pm with a cocktail reception following
Gary M. Tenzer, GSP Principal/Senior Director, will moderate a panel at APARTMENTS 2008, produced by Real Estate Media publishers of Real Estate Forum, Real Estate Southern California, GlobeSt.com and the RealShare Conference Series.
Panel Topic: With Dislocation Comes Opportunity- Surviving Today's Capital Crisis--Who will Fill the Debt & Equity Financing Void for the Next 18 Months and into the Future?
Panelists Include:
Brian Benson, Chief Lending Officer, Imperial Capital Bank
Barbara Dugas-Patterson, Senior Vice President & Regional Director, Citibank
Cheryl Higley, National Director of Multifamily, RBC Capital Markets
David Kadin, Senior Director, Investments, Wrightwood Capital
Heidi McKibben, Vice President, Fannie Mae
Scott Lee, Vice President, GE Real Estate
Philip Powers, Senior Vice President, Security Pacific Bank
The Westin Bonaventure
404 South Figueroa Street, Los Angeles, CA 90071 | | | In the Press | |
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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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