GSPartners
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Volume XVII | No. 20 | July 15, 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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0.29%
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5 Yr US Treasury
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2.40%
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5 Yr Swaps
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2.79%
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12-MAT
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1.05%
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3 Month LIBOR
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0.51%
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10 Yr US Treasury
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3.52%
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10 Yr Swaps
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3.65%
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11th Dist COFI
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1.83%
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6 Month LIBOR
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0.99%
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30 Yr US Treasury
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4.43%
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| | | National Lender Still Actively Lending on Variety of Core and Special-Use Asset Classes. GSP has identified a capital source actively lending on commercial real estate nationwide. The lender will finance the following asset classes: office, industrial, retail (anchored or not), multi-family, self-storage, hospitality, healthcare and other special purpose properties. Additionally, the lender benefits from short and long term fixed rate loan programs with no prepayment penalty, granting borrowers greater flexibility to refinance when financing conditions improve. Par deals and amortization periods of up to 30 years are also available on a deal by deal basis. | | Transaction Size: $1M -$10M | | Rate: 6.75% - 7.5% | | Loan Term: 1,3,5,7,10 years | | Amort: 25 years | | Max LTV: 65% | | Recourse | | Property Types: All major asset classes (some special use) | | Prepayment: None | | Fees: 0.75 to 1% | | Geography: Nationwide |
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| | | Hot Money 07/08/2009 - Local California Community Bank Offering Attractive Financing Program on a Wide Variety of Asset Classes. Regional balance sheet bank is actively financing owner-user and multi-tenant commercial properties in California, including: industrial, multi-family, office and retail (deal by deal basis). The lender is flexible regarding recourse but relationship oriented, requiring a marginal depository relationship with the borrower. Additionally, the lender will consider doing non-recourse deals on a deal-by-deal basis and benefits from a low doc fee. Interest rates ranging from 5.99% - 6.99% for deals ranging from $1M to $5M. Loan terms of five, seven and ten years available. | | | Hot Money 07/01/2009 - Interim Bridge Lender Providing Attractive Rates for California Assets. GSP has identified a private investor providing competitive interim financing for a variety of California asset classes including: land, vacant lots, residential, commercial (four major asset classes) and mixed use. The lender is able to approve and close loans in a very tight time frame and is currently quoting rates as low a 9.00%. The lender typically charges between 1% and 3% origination fees and the loans do not carry a prepayment penalty. Cash-out refinances are available and the credit quality of the borrower is of lesser importance. The lender can also contemplate providing secondary financing behind senior debt. | | | 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 a Mixed-Use, Owner-User Asset in Beverly Hills, CA GSP arranged the refinance of a unique mixed-use asset of apartments over retail (with an owner-user component) located in Beverly Hills. The borrowing entity, a trust, needed a cash-out refinance of the subject in order to satisfy an estate tax due to the death of the trustor. Successor trustee's engaged GSP to negotiate a loan within a short time frame in order to avoid tax penalties. |
Challenge: Use of property was an acting studio/theatre previously run by the deceased trustor. The borrowers needed to close the loan no later than 45 days from application to avoid tax penalties. The lenders needed a warm-body guarantee from within the trust in order to qualify for higher leverage owner-user financing. |
Solution: The loan process was expedited by quickly coordinating third party reports and a cooperative borrowing entity. One of the successor trustees signed guarantees and the transaction closed 15 days ahead of schedule. GSP negotiated a fixed loan term with a step-down prepay affording flexibility for future restructuring of the debt and borrowing entity. |
| | Rate: 6.95% | | Term: 7 years | | Amort: 25 years | | LTV: 60% | | DCR: 1.0 | | Prepayment: Step-down | | Recourse | | Lender Fee: Par | | Key Players: Marc Schillinger |
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| | | Pascale's Perspective | by David R. Pascale, Jr.
Floating Rates: LIBOR and Prime remain very low, with the 30 day LIBOR at 0.29%. Ted spread also holding at a very functional level as the credit markets remain liquid and relatively unfazed by the problems with CIT and the State of California.
Fixed Rates: Positive economic data this week has negated some of the “flight to quality” and Treasury yields have risen every day this week. The 10 year T opened the week at 3.30% and now stands at 3.55%. Market watchers are aware of the interest rate “paradox”: as the recovery starts and investors leave treasuries, the yields rise and the subsequent rate spike threatens the recovery.
Spotlight on Earnings: In 2007 and 2008, the quarterly earnings reports were a blizzard of bad news as the big financials took massive losses on subprime mortgages and other credit related issues. Corporate earnings are important to a recovery in commercial real estate fundamentals. We are specifically watching: (1) Financials, balance sheets need to return to health; (2) Retailers: The US economy is 70% consumer driven; retail is a critical element of commercial real estate and closely monitored by lenders; (3) Homebuilders: Are we at the bottom? Watch the forecasts from the big builders; (4) Major Dow components: Widely held companies are in consumer’s 401k’s, big effect on consumer confidence, also affects major office and industrial sectors…Stay tuned… | | | George Smith Partners and Manatt, Phelps & Phillips, LLP Join Forces | George Smith Partners (GSP) and national law firm Manatt, Phelps & Phillips, LLP (Manatt), have joined forces to offer an integrated legal and financial advisory platform to advise and assist borrowers with securitized commercial real estate loans (CMBS) in restructuring their debt. For more information on this new program please contact Gary M. Tenzer, David Rifkind or your GSP representative. To read the entire press release please click on the following link: GSP/Manatt Press Release. | | | Speakers Corner | July 16, GSP Principal and Senior Director Steve Bram will be the guest speaker at the Appraisal Institute's 15th Annual Summer Conference and Trade Show (located at the Cerritos Sheraton). Mr. Bram is speaking at 9:30 AM and will discuss Wall Street and commercial mortgage markets in general. | | | Come Grow With Us | George Smith Partners is expanding its team of top-notch mortgage brokers/originators. 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 Todd August, Chief Operating Officer, at (310) 867-2995.
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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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