GSPartners
|
|
|
|
Volume XVII | No. 23 | August 5, 2009
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.28%
|
5 Yr US Treasury
|
2.72%
|
5 Yr Swaps
|
3.10%
|
|
12-MAT
|
0.90%
|
3 Month LIBOR
|
0.47%
|
10 Yr US Treasury
|
3.76%
|
10 Yr Swaps
|
3.94%
|
|
11th Dist COFI
|
1.59%
|
6 Month LIBOR
|
0.90%
|
30 Yr US Treasury
|
4.56%
|
|
|
|
| | | Pool of Private Money to Restructure Existing Loans. George Smith Partners has amassed a pool of private money to help our clients restructure existing loans on commercial and multi family properties nationwide. The emerging scenario is a borrower in default (or potential default) on a loan and the lender either offers the loan for sale or offers a discounted payoff directly to the borrower. Our private sources are willing to finance up to 90% of the discounted loan amount (requiring new sponsor equity of approximately 10%). The new loan will pay off the existing lender at the agreed upon discount with a new 1st mortgage on the property. | | Transaction Size: $3M - $100M | | Rate: Low to mid teens | | Loan Term: Up to 5 years | | Non-recourse | | Property Types: All major asset classes | | Geography: Nationwide |
|
| | | Hot Money 07/29/2009 - Southern California Bank Still Lending Aggressively on Multi-Family Properties. A local bank (correspondent relationship with GSP) is lending aggressively on multi-family properties in Southern California. Of particular interest is the bank's flexible underwriting, making the program appealing for multi-family properties and borrowers that do not fit the agency "box". The bank will also permit the borrower to rate lock 60 days for a 1.00% fee and will contemplate non-recourse financing. Transaction Size: $1M - $7M; Rate: 5.9% - 6.4%; Loan Term: 30 years; Amortization: 30 years; Max LTV: 75%; Min DCR: 1.25; Geography: California; Non-recourse. | | | Hot Money 07/22/2009 - Non-Recourse Financing for Credit Tenant Leases Nationwide and Outside the United States. GSP has identified a capital source providing non-recourse financing of credit tenant leases nationwide and internationally. The lender deals only with investment grade tenants and can provide up to 100% LTV financing if the conditions permit. The terms of the financing vary (contingent on the length of the tenant's lease) but all loans are all fully amortized. The pricing also varies on a deal-by-deal basis and is contingent on the quality of the tenant's credit (only investment grade of BBB- or above considered) and strength of the lease (i.e. length of lease, bondable, NNN, NN, etc). Although an asset's location and sponsorship are taken into consideration, the quality of the credit and strength/length of the lease is imperative. | | | 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: | | Refinance of a 14 Unit Multi-Family Property in Sherman Oaks, CA. The asset, purchased earlier this year, is located in the prime area of Sherman Oaks, a city located in the San Fernando Valley, CA. The take-out financing was provided by a commercial bank in order to replace a more costly, private-money loan. |
Challenge: The borrower had only six months to refinance the existing loan and during that period of time there were dramatic fluctuations in the property's occupancy. The ownership entity structure and overall credit of the transaction required exceptions from the bank in order to fit their guidelines. |
Solution: GSP identified a lender that understood and felt comfortable with the compensating factors of the transaction (occupancy and credit). Additionally, the low LTV loan mitigated risks associated with the deal. |
| | Rate: 5.90% | | Term: 30 years | | Amort: 30 years | | LTV: 55% | | Prepayment: Step-down | | Non-recourse | | Lender Fee: Par | | Key Players: Marc Schillinger |
|
|
| | | Pascale's Perspective | by David R. Pascale, Jr.
Fixed Rates: The government is announcing a $77 billion auction in the next round of funding. After the recent record $200 billion funding last month, this supply is expected to be absorbed without much price or rate movement. The 10 year T is at 3.65%. Yields dropped across the curve today as the stock market rally took a break on some negative employment news.
Economy: Well, here we are, ready to digest data from 3Q 2009 (i.e. July 2009 reports on retail, employment, housing, etc). Today’s negative ISM service industry employment report indicates that if a recovery is under way, it is a “jobless recovery” for the time being. How will this type of recovery affect real estate? Certain sectors (such as office) are highly dependent on jobs. Retail will also be sluggish as consumers will hold back until confidence in the job market returns. Look for lenders to continue to collect lots of data specific to the subject property’s market, etc. Housing may recover first which hopefully will start to heal lender balance sheets…..Stay tuned… | | | In the Press | GSP Senior Vice President and resident capital markets expert, David R. Pascale Jr., was recently quoted in the California Real Estate Journal regarding his thoughts on the TALF program and the CMBS market. To read the full article please click on the following link: CREJ Article. | | | 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.
|
|
|
|
|
©2009 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
