GSPartners
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Volume XVII | No. 12 | May 27, 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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0.32%
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5 Yr US Treasury
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2.31%
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5 Yr Swaps
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2.70%
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12-MAT
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1.34%
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3 Month LIBOR
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0.66%
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10 Yr US Treasury
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3.56%
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10 Yr Swaps
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3.61%
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11th Dist COFI
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1.63%
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6 Month LIBOR
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1.27%
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30 Yr US Treasury
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4.50%
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| | | Debt and Equity Fund Providing Unique Bridge, Mezzanine, and Preferred Equity Financing. GSP has identified an active nationwide debt and equity fund providing unique offerings including: 1st mortgages, 2nd mortgages, mezzanine loans, b-notes and junior participation. The fund is looking to capitalize on existing real estate sectors not pursued by conventional financial institutions and is aggressively pursuing mezzanine financing (up to 85% LTC) for multifamily, office, retail, industrial and hospitality properties. | | Transaction Size: $1M minimum | | Rate: Starting at 12% (varies by transaction) | | Max LTC: 85% | | Property Types: All major asset classes and hospitality | | Fees: Varies depending on loan structure | | Geography: Nationwide |
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| | | 05/19/2009 Hot Money - Commercial Lender Providing Non-Recourse Financing for Debt Purchases. GSP has identified a nationwide commercial lender currently providing non-recourse floating rate financing for debt purchases. The lender will consider financing both performing and non-performing "distressed" debt on commercial real estate for: 1). property owners buying their current debt at a discount; 2). third party debt acquisitions with strategies for hold to maturity, foreclose/deed-in-lieu, restructuring, etc. The lender will provide attractive advance rates - including debt purchase plus resolution/stabilization expenses (up to 50%-70% of cost). Loan terms of one to five years available. | | | 05/11/2009 Hot Money - A Major GSP Lender Relationship Has Announced a New “CMBS Like” Program Providing Non-Recourse Stabilized Financing. This program is only possible because of the Federal Government’s new TALF program, which allows the buyer of the investment grade portion of the loan to get a loan from the treasury. The program is currently originating loans from $10M - $200M (max 70% LTV) for the four major asset classes in core markets; the pricing is from 9% - 10% with three to five year terms available. The lender is prepared to close these loans on their warehouse lines prior to securitization. | | | 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: | | Cash-out Refinance of Two Industrial Properties in Glendale, California. GSP arranged the cash-out refinance of two flex industrial properties in Glendale. |
Challenge: The borrower had a court order to refinance the subject properties to pull cash-out in a very short time frame. The industrial properties did not have credit tenants and had limited cash flow. |
Solution: GSP was able to secure financing by going to an asset based lender and cross-collateralizing the properties in order to maximize their cash flow. GSP was able to close the transaction in less than a week by processing the loan over the weekend for a Monday close. |
| | Rate: 9.9% | | Term: 1 year | | Amort: Interest Only | | LTV: 50% | | Prepayment: None | | Recourse | | Lender Fee: 2% | | Key Player: Shahin Yazdi |
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| | | TALF Expansion - Will it Aid Commercial Real Estate? | Since the Term Asset-Backed Loan Facility (“TALF”) was announced in late November of last year by the US Federal Reserve, there has been a lot of talk and speculation regarding the government sponsored loan facility and its potential benefit to the beleaguered commercial real estate industry.
Initially, TALF was written off by commercial real estate professionals because the program only accepted newly issued CMBS bonds as collateral - doing very little to address the enormous strain on lending institutions caused by the “toxic” assets (distressed loans) already sitting on their balance sheets (aka legacy assets). This concern was addressed on March 23rd 2009, when the US Treasury Secretary, Timothy Geithner, announced the Public-Private Investment Program (“PPIP”), a government sponsored initiative designed to buy $500 billion to $1 trillion worth of commercial real estate loans and CMBS issued before 2009 (legacy assets). The Fed also announced on May 1st that, starting in July 2009, existing CMBS securities (aka legacy loans/securities) will become eligible as collateral under TALF. In addition to expanding the TALF program to accept legacy loans/securities as collateral, the Fed also announced that it will offer loans with five year maturities in addition to the current three year term.
These new, positive developments in the government programs are just beginning to bare fruit in commercial real estate finance. George Smith Partners is working with several investment banks (see Hot Money above) and insurance companies to explore potential loans for the bond offerings under the assumption that investors are ready to get back in CMBS game after a prolonged absence. Stay tuned to Finfacts for a piece describing the nuances of the PPIP program and its ramifications for investors and tax payers. (Sean Lurry). | | | Speakers Corner | May 27, Wednesday night, GSP Principal and Senior Director Steve Bram will be a guest lecturer for UCLA Extension class on Real Estate Development and Property Management and will be discussing the importance of proper financing for properties.
June 6, Saturday morning, GSP Principal and Senior Director Steve Bram will be the guest lecturer for the ULI’s Advanced Commercial Development Real Estate School class, where he will discuss how to get financing and how to arrange a Joint Venture. | | | Come Grow With Us |
George Smith Partners is seeking several seasoned real estate professionals with workout and restructuring experience to work in GSP’s Loan Work-Out/Restructuring Group. Specific experience with CMBS and bank loans is preferred.
GSP offers incentive based compensation and an excellent environment in which to work. We invite you to consider a career with George Smith Partners. George Smith Partners is an equal opportunity employer. Please direct all confidential inquires to Stella Debibi at (310) 867-2901 or sdebibi@gspartners.com.
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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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