GSPartners
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Volume XVII | No. 27 | September 9, 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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0.25%
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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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2.72%
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12-MAT
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0.76%
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3 Month LIBOR
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0.30%
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10 Yr US Treasury
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3.50%
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10 Yr Swaps
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3.64%
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11th Dist COFI
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1.47%
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6 Month LIBOR
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0.69%
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30 Yr US Treasury
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4.35%
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| | | National Lender Still Funding Hotel Loans for Strong Flags in Top Markets. GSP has identified a nationwide lender still funding low leverage loans for hospitality properties in strong metropolitan markets. The capital provider is currently lending only to franchisors of top "flag" hotel brands in primary markets. Currently the lender is requiring the following to fund a transaction: 1). Owner/operator with demonstrated hotel ownership experience (minimum of two hotels for at least three years), 2). Excellent property location; visibility, accessibility and positive economic demand generators, 3). Meets all qualifications of franchisor. | | Transaction Size: Over $1M | | Rate: 7.5% and up | | Loan Term: 3 years | | Amort: 20 years | | Max LTV: 50% | | Min DCR: 1.50 | | Property Types: Hospitality | | Fees: 1% | | Geography: Primary MSAs |
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| | | Palatable Mezzanine Financing Available for Institutional Quality Commercial Assets Nationwide. GSP has identified a source of attractively priced mezzanine financing for all asset classes of commercial real estate nationwide. Currently, the fund is looking to provide the much needed capital between the limited leverage availability in the marketplace (between 50% LTV - 70% LTV) at a rate of approximately 12%. Although there are other players in this arena, they are more expensive, typically pricing their loans between 15% - 22%. This lower pricing affords the borrower a lower blended rate that may make the difference in a deal penciling in the tight credit environment. The fund is currently focused on high quality assets (institutional quality) in top tier, high barrier to entry primary markets. The financing can be structured as typical mezzanine or preferred equity (under same mezzanine terms) if need be. Transaction Size: $5M - $25M; Rate: 12% -13% Fixed; Loan Term: 3 to 5 years; Max LTV: 70%; Geography: Large MSAs; Non-recourse. | | | “Nearly Bankable” Senior Loans and Note Purchase Financing (both distressed and performing). GSP has a strong relationship with a national lender specializing in “nearly bankable” senior loans. The lender will finance situations that conventional lenders won’t touch in today’s market: capital market bridge loans for maturing CMBS, assets in lease-up with above market vacancy, construction loan takeouts, purchase of commercial REO property, and cash outs. The lender also specializes in financing note purchases, including both performing and distressed loans. Rates and fees are a notch higher than conventional lending sources, but much less expensive than hard money sources. The lender will finance the following asset classes: office, industrial, retail, multi-family, self-storage, and healthcare. Single asset loans range from $1M - $10M. Larger financing amounts available for acquisition of loan pools with multiple assets. Transaction Size: $1M - $10M (prefer $2M - $7M); Rate: Varies by deal; Loan Term: 6 - 24 months; Max LTV: 75% Max (typically 65%); Property Types: All major asset classes; Geography: Nationwide (primarily focused on western states). | | | 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 on Super Jumbo, Residential Loan on a Second Home. As a courtesy to an existing client, GSP arranged the financing for a second home in the Mulholland Hills. There was very little debt on the property so the client was looking to pull a significant amount of cash out to buy commercial properties. |
Challenge: 1). The clients’ Tax Returns did not show enough income to meet the necessary debt to income ratios lenders required. 2). Due to the capital markers, lenders were reluctant to allow a significant cash out on a second home. |
Solution: 1). GSP convinced the lender to make an exception to their debt to income ratios because of the low loan-to-value and location of the property. 2). The client deposited a small portion of the cash out proceeds at the bank. |
| | Rate: 6.5% | | Term: 3 years | | Amort: Interest Only | | LTV: 50% | | Lender Fee: Par | | Key Players: Shahin Yazdi |
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| | | Pascale's Perspective | by David R. Pascale, Jr.
Floating Rates: What a difference a year makes… Last September, 3 month LIBOR jumped to 4.82% from under 3.00% in two weeks at the height of the credit crisis panic as AIG, Merrill and Lehman all careened towards bankruptcy or bailout. Today, 3 month LIBOR is at 0.30%, an all time low since the BBA began regular reporting in 1986. Prime rate remains at the absolute low after the rate cutting that occurred in the 4th quarter 2008. Recent statements by Fed officials and their European counterparts at the G20 meetings indicate a willingness to keep rates down for the time being...
Fixed Rates: The Treasury’s auction of $20 billion of 10 year notes went well today as the “Beige Book” report indicated a recovery is underway but no immediate fear of inflation, perfect for bond buyers’ state of mind. The 10 year T rose a bit, up to 3.51%. Curve watchers will note a fairly steep yield curve which usually portends a recovery, but these times are nothing if not “unusual”… Stay tuned… | | | 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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