GSPartners
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Volume XVII | No. 8 | April 23, 2009
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KEY RATE INDICES
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Prime Rate
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3.25%
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1 Month LIBOR
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0.44%
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5 Yr US Treasury
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1.87%
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5 Yr Swaps
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2.53%
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12-MAT
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1.44%
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3 Month LIBOR
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1.09%
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10 Yr US Treasury
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2.92%
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10 Yr Swaps
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3.10%
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11th Dist COFI
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2.00%
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6 Month LIBOR
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1.64%
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30 Yr US Treasury
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3.79%
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| | | West Coast Debt Fund actively looking to place non-recourse bridge debt in the Western US. West Coast Debt Fund with discretionary capital provides "one-stop" financings for real estate acquisitions, re-financings and re-capitalizations across the Western United States on all property types including office, retail, industrial, multifamily and hotels. The fund is actively looking to participate in all layers of the capital stack, including: first mortgages, junior mortgages, mezzanine loans, pref. equity and the financing of note purchases. | | Transaction Size: $10M Minimum | | Rate: Spread over LIBOR (deal specific) | | Loan Term: 2 to 5 years | | Amort: Interest Only | | Max LTV: 75% | | Non-recourse | | Property Types: All major asset classes and hospitality | | Fees: Typically 1% | | Geography: Western US |
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| | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, asset sales or advisory services please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or taugust@gspartners.com.
| | | | Transaction Description: | | $2,300,000 Senior Loan for the Acquisition of 16 Unit Multi-family Property in Los Angeles, CA.
GSP arranged the financing for the acquisition of an 16 unit multi-family property located in Los Angeles. |
Challenge: First time multi-family borrower wanted to purchase a non-rent controlled building to manage during his retirement. Loan to value was critical to the borrower, so GSP needed to pre-underwrite and prepare for any potential issues before the borrower's contingency period expired. The seller also did not have any flexibility on the close of escrow date. |
Solution: GSP was able to identify a lender that would lock the interest rate at application and convinced the lender that a third party management company was not necessary due to the borrower’s proximity to the building and successful track record in managing his personal business. Transaction went from application to close in 45 days. |
| | Rate: 5.84% | | Term: 10 years | | Amort: 30 years | | LTV: 60% | | Prepayment: Yield Maintenance | | Non-recourse | | Key Players: Marc Schillinger |
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| | | Market Update | We are often asked about what economic indicators and/or “signs” we are watching to indicate the return of normally functioning credit markets.
Background: At one time, we closely watched all the indices and risk indicators such as Swaps, etc. The new paradigm is not about following indices and spreads, as lenders are now quoting all-in rates or flooring. LIBOR, Prime and Treasuries (along with major lenders' cost of funds) are at historic lows due to government and central bank interventions, quantitative easing policies, etc. So “spreads” between cost of funds and prevailing loan rates are historically high. Lending should be a very profitable business, but credit risk, “fear factors” and toxic legacy assets are clouding the picture.
What are we watching now? The good news is that the disastrous credit meltdown of late 2008 has largely subsided evidenced by a drop in the Ted Spread, the LIBOR-OIS spread, the partial return of corporate bonds, etc. In addition to real estate fundamentals (vacancy, rents), the focus is on macro-economic indicators and it seems that “everything is connected.” Employment and housing prices affect consumers’ spending and therefore retail rents. Corporate earnings and stock markets affect overall wealth and tenants’ ability to pay rents. Delinquencies and defaults in residential, credit cards, auto loans, etc affect lender balance sheets. Mixed signals abound with some calling this the “bottom” and seeing signs of a turnaround… Stay tuned….(David R. Pascale, Jr).
| | | Speakers Corner | GSP Principal and Senior Director Steve Bram will be the featured speaker at the Cornell Club of Los Angeles' Quarterly Business Networking Breakfast. Mr. Bram will lead a discussion about overcoming the challenging times in which we find ourselves. For more information regarding this event please click on the following link - Event Information. | | | Single Family Financing - Synergy | GSP is pleased to announce that we have established a relationship with a well recognized and established residential mortgage lender providing a full range of residential mortgage products. A lender representative is located in our offices. Please contact Todd August or your GSP representative if you need assistance with your residential mortgage. | | | Happy Birthday Sid! | George Smith Partners would like to wish it's Chairman Emeritus Sidney Wallis a happy 89th birthday! Sid has worked with our company since 1984 and mentored many of the brokers and partners. | | | Come Grow With Us | George Smith Partners is selectively seeking several seasoned real estate professionals with work-out and restructuring experience to work in GSP's Loan Work-Out / Restructuring Group. GSP offers highly competitive compensation and an excellent environment in which to work.
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) 867-2901.
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©2009 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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