GSPartners
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Volume XVI | No. 26 | September 17, 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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3.03%
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5 Yr US Treasury
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2.50%
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5 Yr Swaps
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3.64%
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12-MAT
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2.66%
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3 Month LIBOR
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3.06%
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10 Yr US Treasury
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3.38%
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10 Yr Swaps
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4.12%
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11th Dist COFI
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2.70%
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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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4.03%
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| | | Transaction Description: | | $7,000,000 75% LTV, Fixed Rate, Permanent Financing for a Single Tenant Creative Office Building in Hollywood, CA. GSP arranged permanent financing for a spectacular newly redeveloped “build to suit” digital production studio. The two story freestanding building contains a total of 15,040 net rentable sq. ft. on a 26,298 sq. ft. lot. Originally built in 1925 to serve as an animation studio for an owner/user, the building was retrofitted in 1987 and completely renovated in 2007, including a state of the art digital recording studio. The property is strategically located near the epicenter of Hollywood’s Studio and Production core area between Cahuenga Boulevard, Highland Avenue, Melrose and Santa Monica Blvd. At the time of acquisition, the borrower signed a 10-year, NNN lease with a well capitalized start-up digital entertainment company. The proceeds from the permanent loan were utilized to pay off a construction/bridge loan. |
| | Rate: 6.55%, LIBOR Swap Fixed Rate | | Term: 5 yrs | | Amort: 30 yrs | | LTV: 75% | | Prepayment: The interest rate SWAP that fixes the rate may have a termination value, positive or negative, at the time of termination/prepayment. | | Recourse | | Lender Fee: Par | |
Key Players: Andrew Levant,
Gilda Rivera
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| | | Transaction Description: | | $1,800,000 (67% LTV, Non-Recourse) for the Refinance of an Owner-User Office Building in Orange County, CA. GSP secured non-recourse financing for an owner-occupied office building totaling 9,343 sq. ft. in Orange, CA. |
Challenge: The structure of the borrowing entity necessitated non-recourse financing, which is traditionally not widely available to owner-user borrowers. Additionally, the perceived softening of the Orange County Office Market coupled with the unique nature of the subject property gave some lenders reluctance. |
Solution: Supported by the financial strength of the borrower, GSP identified a lender willing to overlook market softening in order to fund an extremely competitive, non-recourse loan. The lender even worked to stretch from 65% LTV up to 67% LTV when a low appraisal threatened to reduce proceeds. |
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| | | Market Update | Turmoil on Wall Street and in the credit markets as Lehman Brothers declares bankruptcy, Merrill Lynch has been sold, AIG has been propped up by the US Government. This is a landmark week for the global financial system. Alan Greenspan has called the credit crisis a “once in a century event.” We may be seeing the end of Investment Bank domination of financials and a transition to Commercial Banks with Investment Bank subsidiaries, truly a “tectonic shift” in American finance. The effect on interest rates has been stark. Treasuries have rallied on a huge flight to quality; the 10 Year T is 3.35% as of Wednesday morning. LIBOR has spiked up 50 bps, the 30 day LIBOR rate is up to 3.03% (after spending weeks at 2.47%). The latest crisis has seen the entire worldwide overnight and short term lending market freeze up as banks hoard cash, driving up LIBOR. Central banks in US, Europe, Australia are trying to “un-freeze” these crucial markets with billions of dollars in cash infusions. Stay tuned… (David R. Pascale, Jr.) | | | Speakers Corner |
September 22, 2008
Andy Levant, GSP Senior Vice President, will participate on a panel at the “Core Network” Fall Conference. The event will take place on the evening of September 22 at the Hollywood Roosevelt Hotel.
Panel Topic: Current US Market Conditions and Future Prospects
Moderator: Frank Buckley, Principal, Ramsey Shilling
Other Panelists Include Representatives from:
· Fortress Capital, a hedge fund
· Essex Realty, a REIT
· A national developer (to be determined)
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September 23, 2008
David Rifkind, GSP Principal/Managing Director, is presenting a Private Briefing Series to Jeffer, Mangels, Butler & Marmaro LLP September 23, 2008. His program is designed to inform at a high level and address the State of the US Commercial Real Estate Capital Markets as seen from an industry insider. His presentation is geared toward industry professionals whose practice is in Commercial Real Estate, Law, Accounting or Government. His program is qualified for MCLE credits. For more information, please contact Stella Debibi at 310-557-8336 Ext. 103 or sdebibi@gspartners.com.
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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 | | | 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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