GSPartners
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Volume XVIII | No. 13 | March 31, 2010
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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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2.56%
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5 Yr Swaps
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2.71%
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12-MAT
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0.44%
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3 Month LIBOR
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0.29%
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10 Yr US Treasury
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3.83%
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10 Yr Swaps
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3.81%
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11th Dist COFI
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1.83%
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6 Month LIBOR
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0.44%
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30 Yr US Treasury
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4.71%
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| | | Transaction Description: | | Nightclub Bar NNN Single Tenant Retail. Purchase Money Transaction in Prime West Hollywood Location.
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Challenge: Lender appetite for Single Tenant Retail, specifically new nightclubs, was very limited. Most of the lenders approached did not even have a program appropriate for this use and product type. Borrower also was in a 1031 exchange with limited time to close, so this contributed to the need for certainty of close. The borrowing entity was a Dual Purpose LLC, composed of 3 separate borrowers within 2 family trusts. The loan was also over $500/Square foot. |
Solution: GSP packaged the request and contacted over 20 lending institutions to ensure that financing would be in place at the time of close and to confirm that the borrower received the best rates and terms available in the marketplace. GSP was able to demonstrate the strength of building's location using recent market comparables and use the combined financial strength of the borrowing entity as a compensating factor to the high loan per Sq Ft. |
| | Rate: 6.75% fixed for 3 yrs, then Prime + 1% | | Term: 5 years | | LTV: 60% | | Prepayment: 3,3,2,2,1,1 | | Recourse | Broker: Marc Shillinger |
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| | | | Balance Sheet Lender Funding Nationwide Fixed or Floating Rate Loans This lender will consider bridge loans with additional fundings post closing with no neg arb (ie borrower pays interest on the additional funds based on the funding date). Main 4 product types in large markets are preferred (some hotels). This is an ideal program for properties in lease-up or with some future "pop" in the income. Lender will do floaters up to 5 years. Typical pricing is 90 day LIBOR + 4.50-5.00%, interest only, with a floor on LIBOR of 1%. So the starting coupon can be as low as 5.5% with no amort. Fixed rates are in the 6.25-7.00% range. Loans are not securitized, lender is the servicer for life of the loan. | | Transaction Size: $15,000,000 | | Loan Term: up to 5 years | | Amort: 25 years, 30 years, Interest Only | | Geography: Nationwide |
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| | | Hot Money | Attn Apartment Owners! High leverage, non-recourse, money with a step-down prepayment penalty is back. The competitive advantages to this new multi-family program include: 1.15 DCR on Cash Out Refis or Acquisitions, Ability to Lock Rate at Application, Non-recourse, and 75% LTV. Hot Buttons: This lender is very sensitive to recent (6 month trailing) rent decline, location, condition of building, and actual expenses. On the borrower's side they are focused on minimum thresholds for borrower's net worth, liquidity, experience, and outside income. GSP has been interfacing with this lender to assure that loans are structured and packaged correctly in accordance to these new guidelines. We have a longstanding relationship with senior decision makers. So to all who own multifamily buildings, your time has come, rates are low. Loan Size: $500,000 and up. Pricing: Current ARM rates in the low 4% range for Libor based floaters, 30 year terms; 5 year fixed rates in Mid 5% range, no lender fee, loan is a 30/30 with a reset after 5 years; Small premium in rate for loans under $1,000,000. Also, 7 and 10 year fixed rate loans priced within 25 bps of Fannie and Freddie with no PML requirement for most properties. Primary markets preferred. | | | Hot Money | Capital provider with over $3.0 billion to purchase/originate debt on all major real estate product types throughout North America. Structures include senior debt, mezzanine debt, preferred equity and note purchase financing. Minimum size investment is $40 million which could be on a single asset or on a portfolio of assets. Preferable term is 3 to 5 years but could do more and pricing is 8% to 15%+ with LTV’s capping in the 75% to 80% range. Not a buyer of distressed “loan to own” debt but capable of providing the note purchase financing for others employing this strategy. | | | 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. | | | Join Us on LinkedIn | George Smith Partners is now on LinkedIn.....Click here to join the George Smith Partners group to get access to current conversations and topics. | | | Pascale's Perspective | CMBS: The 10 year Swap is still slightly negative (-2 bps), and CMBS lenders are quoting over the all in Swap, even though it is lower than the treasuries. All eyes in the CMBS world are on the first multi-borrower, "standard" CMBS offering in 2 years which is now at market. The early buzz is that demand is high and the AAA's should be oversubscribed. CMBS bond spreads continue to compress (good news), as part of the recent trend: corporate bonds and other private issues (such as CMBS) are rallying, while government issue demand is flagging. Investors are now concerned about sovereign debt worldwide, whether its Greece, Ireland, Portugal, the UK, the USA, etc. The massive flight to quality of the past two years has flip flopped with private issue now in demand. Hopefully any run up in treasuries will be matched by corresponding spread compression, keeping all-in rates at low levels. In other news, this week's US employment number is one of the most highly anticipated statistical releases in recent memory. It is expected to show a net gain in jobs which will be a major step in the recovery.....Stay tuned...David R. Pascale, Jr. |
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©2010 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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