GSPartners
|
|
|
|
Volume XVIII | No. 19 | May 5, 2010
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.29%
|
5 Yr US Treasury
|
2.32%
|
5 Yr Swaps
|
2.56%
|
|
12-MAT
|
0.41%
|
3 Month LIBOR
|
0.36%
|
10 Yr US Treasury
|
3.57%
|
10 Yr Swaps
|
3.60%
|
|
11th Dist COFI
|
1.86%
|
6 Month LIBOR
|
0.55%
|
30 Yr US Treasury
|
4.41%
|
|
|
|
| | | Transaction Description: | | $4,000,000 Permanent Financing for a Multi-Family Complex in San Jose, CA. GSP successfully arranged a 10-year fixed-rate loan for the refinance of a stabilized apartment complex. The 1970's built complex contains 120 units. The Sponsor’s objective was to refinance the existing HUD loan to remove the stringent reporting requirements which included annual audited financial statements. Not only does the new lender have less onerous reporting requirements, but GSP was able to reduce his interest rate by more than 1%. While this asset has always had very strong occupancy and leasing, the property only has one-bedroom units, leased on a month-to-month basis as well as approximately 15% Section 8 tenants which posed a hurdle for the lender. |
| |
|
| | | | Attention Apartment Owners! 3 years of Interest Only at 5.40% or 5 years of Interest only at 5.75%
Total loan term is 30 years with an interest only period of 3-5 years. Loan then converts to a 30 year amortization and floats at 12MAT + 2.55-2.70%. Loan features declining prepayment during the interest only period and then is prepayable at par. George Smith Partners is a correspondent to this lender and receives wholesale pricing with no fee to the lender. Lender underwrites to a 1.15-1.20 DCR on the start rate with a 30 year amortization. Max LTV's are 75% for purchase and 70% for refinances (65% for cash out refinances). Lender is usually recourse.
For example on 5 year IO program
Lender Net Operating Income = $200,000
Underwrite at 1.15 Debt Coverage on 30 Year Amortization Underwriting Rate is Start Rate = 5.75% Estimated Loan Proceeds = $2,480,000 Monthly Payment = -$14,492
| | Transaction Size: $750,000-$5,000,000 | | Rate: Start rate for 3-5 years @ 5.40% to 5.75% | | Loan Term: 30 | | Amort: 30 | | Max LTV: 75% | | Max LTC: 75% | | Min DCR: 1.15 on 30 year amortized constant | | Recourse | | Property Types: Apartments | | Prepayment: 1.5,1.5,1.5,1.0,1.0, then None | | Fees: Par | | Geography: California |
|
| | | Hot Money | Institutional Bridge Money Lender Sees Opportunity in Core Markets This nationwide lender is funding bridge loans ($10,000,000 and up). GSP met with the top executives of the group today in our office. Takeaway quote: "The market recovery is moving faster than we anticipated" Lender is looking to fund transitional properties in core markets for good sponsors. Property type focus is on apartments, grocery anchored retail, selective office and hotels (limited and full service). Lender will fund below break even and most aggressively on apartments, while hotels will size at an approximately 12.5% debt yield. Maximum loan to total cost is 70-75%. Lender will consider future fundings with no neg arb. Transaction Size: $10,000,000 and up; Rate: LIBOR + 4-5%, 1% floor on LIBOR; Loan Term: 3-5 years; Amort: Interest only; Max LTV: 75%; Max LTC: 75%; Min DCR: 1.0 for most properties; Non-recourse Property Types: Apartments, Grocery Anchored Retail, Office (some), Hotels; Fees: 1% plus 1% exit fee Geography: Nationwide | | | Hot Money | Equity Update, Major Pension Fund Manager: Fund Manager has $40,000,000 total portfolio containing all major product types and over 150 pension fund clients. Program designed for ground up construction. Does not require prevailing wage for developement. No transactions with entitlement risk. Can fund the land with a site plan and schematics. Program is IRR oriented with short term horizon, ie JV the development and sell at completion or stabilization. Target yields: 20+ IRR, 7.5% return. Gross project cost range: $20,000,000-$40,000,000. Fund will not sign on recourse. 60-65% debt is normal, but can accept up to 80% leverage | | | 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 | Greece is the word.....Many are wondering how a nation with a GDP the size of Connecticut can cause panic throughout world equity and credit markets....It's the "fear factor" again as outliers such as Times Square terror threat, Gulf oil spill and the threat of "contagion" in Europe have rattled investors. Interesting that the head of the ECB, Jean-Claude Trichet's briefing remarks tomorrow are being more closely watched than Fed Chairman Bernanke's scheduled speech in Chicago. The world will be looking for clues as to whether Europe's central bank will embark on some 2008 style emergency programs such as quantitative easing (purchasing securities) or perhaps flooding the credit markets with rock bottom 30, 60 and 90 day money contracts. This would ease LIBOR rates, which have creeped up slightly, while Treasury yields plummet on flight to quality.....Stay tuned.....David R. Pascale, Jr. | | | Join Us on LinkedIn | George Smith Partners is now on LinkedIn. Last week our membership surged to over 1,200 members. Click here to join the George Smith Partners group to get access to current conversations and topics. | | | 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. |
|
|
|
|
©2010 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
