FINfacts Newsletter XVI-30

Volume XVI  |  No. 30  |  October 15, 2008   Letter to the Editor   Print PDF KEY RATE INDICES Prime Rate  4.50% 1 Month LIBOR  4.36% 5 Yr US Treasury  2.98% 5 Yr Swaps  4.14% 12-MAT  2.48% 3 Month LIBOR  4.55% 10 Yr US Treasury  4.07% 10 Yr Swaps  4.66% 11th Dist COFI  2.69% 6 Month LIBOR  4.15% 30 Yr US Treasury  4.29%     George Smith Partners Forms Lender Services Group to Accelerate the Sale of Lenders’ Assets LOS ANGELES (October 2, 2008)— Commercial real estate investment banking firm, George Smith Partners, Inc. has formed the Lender Services Group to effectively market and sell lenders’ assets in an accelerated format, while focusing on the highest recovery for the lending institution.   The Lender Services Group utilizes strategically appropriate disposition efforts, according to George Smith Partners. In specific circumstances where lenders require timely access to capital, the new group will have the capability to evaluate assets tapped for disposition and to either choose from a select list of potential bidders to help facilitate discreet, quick sale of one or more assets or to utilize a broad-based bid program.   “In recent months, GSP has been inundated with requests from investors and institutions seeking note acquisition and REO investment opportunities,” explained Craig Hamilton, Senior Vice President of George Smith Partners. “Due to our extensive relationship with a large pool of qualified investors and lending institutions, our newly formed Lender Services Group will be able to assist by linking lenders who currently have an increase of substantial sized assets on banks’ balance sheets that need to be liquidated with qualified buyers to facilitate quick sales of the lender’s assets.”   “All of the multiple disciplinary skills we have honed as a firm over the cycles in the past 40 years will come into play in GSP Lender Services,” added David Rifkind, Principal/Managing Director of George Smith Partners. “This best-in-class service will be a tremendous asset to our large base of lenders and investors at this critical time in the credit and real estate cycle.”   The Lender Services Group is headed by Craig Hamilton and George Smith Partners Principals Scott Bottles, David Rifkind, Gary E. Mozer, Steve Bram and Gary M. Tenzer, as well as Senior Vice President Andrew Levant, all with tremendous industry experience and deeply rooted relationships with key financial participants including banks, private equity funds and individual investors. Hamilton has a wide experience in complex land and construction projects coupled with a unique ability to rapidly facilitate the process of evaluation, presentation and then negotiation of assets put up for sale. Bottles’ experience includes 22 years at Wells Fargo and understands the needs of banks and borrowers. Rifkind is widely recognized among the nation’s foremost experts in real estate debt restructuring. Mozer, Bram and Tenzer are recognized among the nation’s leading real estate financiers, each with two decades of experience in all aspects of commercial real estate finance and an in-depth knowledge of virtually all product types.   The Lender Services Group is one of several recent initiatives by GSP to respond to the rapidly changing capital markets environment. GSP continues to lead the industry with best in class commercial mortgage and investment services. G-7 Power Move and FASB by Max Friedman & David R. Pascale, Jr.  The credit markets finally showed signs of promise this week. However, the journey “back to normal” will not be measured in days or weeks. Global markets responded with a sharp upswing on news that a global consensus had been reached and full backing would be provided to support the banking system. The European Central Bank offered $120 billion to facilitate lending between banks. The battle-cry “No More Lehmans” resounded strongly as the G-7 promised to provide liquidity and guarantee all bank deposits. The US Treasury is: (1) Injecting capital directly into nine major banks, (2) Guaranteeing interbank lending, and (3) Expanding deposit insurance. Treasury yields rose dramatically, which is a good sign that the “flight to quality” may be ending as investors are getting more comfortable with other fixed rate instruments and appetite for some risk is increasing. The 10 Year Treasury is at 4.10%, up 0.25% this week. Also note that supply issues are front and center as the US Government and Fed moves need to be paid for. LIBOR rates have fallen for three straight days in response to the global liquidity infusion. FASB: In new activity aimed at quelling the intense volatility in the financial markets as well as helping banks and other lenders survive through this tumultuous period, The Financial Accounting Standards Board has migrated from its normal stance on Fair Market Value Accounting to allow holders of illiquid assets to use some discretion in pricing assets that differs from where the market may price them at this moment. The move to amend FAS 157 has come amid much controversy, as bank officials will now have a hand in determining the components of their own balance sheet.  Stay tuned... GSP Private Briefing Series David Rifkind, GSP Principal/Managing Director, along with Gary M. Tenzer, GSP Principal/Senior Director, are presenting a Private Briefing Series to Goodwin Procter LLP on Wednesday, October 15, 2008. This 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. This presentation is geared toward industry professionals whose practice is in Commercial Real Estate, Law, Accounting or Government. This program is qualified for MCLE credits. If you are interested in having Mr. Rifkind and his team present to your firm, please contact Stella Debibi at 310-557-8336 Ext. 103 or sdebibi@gspartners.com.  Speakers Corner October 22, 2008   Steve Bram, GSP Principal/Senior Director, will be guest lecturer at UCLA Extension, Property Management class. He will be discussing how financing affects the viability of a property as well as the current market conditions. 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.