GSPartners
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Volume XVII | No. 32 | October 14, 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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0.24%
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5 Yr US Treasury
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2.33%
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5 Yr Swaps
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2.63%
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12-MAT
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0.632%
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3 Month LIBOR
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0.28%
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10 Yr US Treasury
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3.31%
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10 Yr Swaps
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3.48%
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11th Dist COFI
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1.412%
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6 Month LIBOR
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0.59%
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30 Yr US Treasury
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4.26%
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| | | Transaction Description: | | $54,375,000 Refinance of Multi-Family Apartment Complex in Los Angeles GSP arranged the financing for a 465 unit apartment complex and coordinated with a consultant for the defeasance of the outstanding loan.
GSP worked extensively with the Lender, Defeasance Consultant, and Counsel to coordinate the funding of the loan and defeasance in the required timeframe. Due to the successful communication and execution, the borrower obtained a very low rate for a long-term fixed rate transaction in today’s market.
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| | | | New Bank Program Funding Nationwide Loans for "Tier 1" Investors This lender will consider Perms and some Construction. This bank has a clean balance sheet, no legacy issues. Focus is on good borrowers in primary and secondary markets. Lender will consider "some" non-recourse, but most loans will be recourse. Lender underwrites to a 10.5% debt yield, which is fairly aggressive in today's environment. Will consider single tenant with long lease term. | | Transaction Size: Up to $7,000,000 | | Rate: 6.5% | | Loan Term: 3-5 years | | Amort: 25 years | | Max LTV: 60-65% | | Max LTC: 50% | | Min DCR: 10.5% debt yield | | Recourse Negotiable | | Property Types: Office, Industrial, some Retail | | Fees: 1.0% | | Geography: Nationwide | |
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| | | Hot Money | Equity Fund Offering Unique Program for Properties in Need of Capital This program is targeted at properties in this "example" situation: An owner of a multi-tenant property has an opportunity to sign a new major tenant which will add value to the property. The owner needs capital to fund tenant improvements, leasing commissions, etc. The existing lender either will not or cannot fund the new capital required. The equity fund will enter into a joint venture with the owner and fund the needed capital. The fund's return is calculated based upon "before and after" valuations. This is ideal for borrowers who can't obtain bridge financing to pay off existing debt and fund improvements, but have an opportunity to increase value. | | | Hot Money | Non Recourse Financing for Single Tenant Transactions, Including "near Investment Grade" Tenants This is an ideal nationwide program for investor owned properties leased to a "arms length" single tenant (ie: non-owner user). Note that lender will also fund under an SBA program for owner user. Lender analyzes tenant financials and does an internal "shadow rating" Tenant gross annual income should be $75,000,000 minimum. Shadow rating: minimum "BB" for office and indsustrial, "BBB" for retail. Target leverage is about 65%, but 75% max is ok for good transactions. Lease income will be "marked to market" based on property type and submarket dynamics. At this time, lender is targeting office, industrial and retail properties in good markets. No restaurants, franchisee fast food, or government leased properties. Transaction Size: $2,000,000 to $15,000,000; Rate: 8.25%-9.25%; Loan Term: 5 years and up (must have minium 5 year lease);Amort: 25 years usually; Max LTV: 75% (prefers 65%);Max LTC: 75%; Min DCR: 1.25;Non-recourse;Property Types: Office, Industrial, Retail (no Restaurants);Prepayment: Yield Maintenance;Fees: Par; Geography: Nationwide | | | 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. | | | Pascale's Perspective | Focus on CMBS: There has been no new issuance this year (or most of last year), all of the trading is in the secondary market. CMBS bonds have rallied lately as the Public Private Investment Program (PPIP) is in effect. How does PPIP differ from TALF? PPIP allows funds to purchase "toxic" assets, including bonds rated below AAA. So this program is tightening spreads especially on bonds recently downgraded to AA and below (even as low as BBB-). The benchmark super-senior AAA bonds have rallied to spreads below Swaps + 300 bps. Note that these bonds were trading as high as Swaps + 1700 bps (about 20%!) in late 2008 and early 2009. So the alphabet soup of government programs is actually starting to work, although its taken a while. What about new issuance? The $400 million DDR transaction has funded and should be securitizing in the next few weeks, more details to come... Stay tuned....David R. Pascale, Jr. | | | 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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