GSPartners
|
|
|
|
Volume XVIII | No. 24 | June 10, 2010
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.35%
|
5 Yr US Treasury
|
2.05%
|
5 Yr Swaps
|
2.40%
|
|
12-MAT
|
0.40%
|
3 Month LIBOR
|
0.54%
|
10 Yr US Treasury
|
3.25%
|
10 Yr Swaps
|
3.34%
|
|
11th Dist COFI
|
1.825%
|
6 Month LIBOR
|
0.75%
|
30 Yr US Treasury
|
4.17%
|
|
|
|
| | | Transaction Description: | | $24,500,000 CMBS Refinance for Single Tenant 130,000 s.f. Office Complex in Northern California This is GSP’s first closing of a “CMBS 2.0” loan. GSP arranged the acquisition financing for this property in late 2006. At the time, the build to suit property had been vacacted by its previous tenant. The 1980’s vintage property consists of 3 identical, 3 story buildings in a campus setting that includes a manmade lake. Borrower leased the property to an investment grade government entity: 20 year lease commenced in 2008. Tenant and borrower spent over $10,000,000 in renovations and tenant improvements. The subject financing was completed during the final months of the term of the acquisition/bridge loan.
|
| |
|
| | | Hot Money | Mezzanine Financing Update Secondary financing is returning as part of the ongoing rebound of the capital markets. Senior loans are more conservative than before, so mezzanine can raise leverage and be thought of as "cheap equity" GSP has met with an oppportunity fund providing mezzanine financing for cash flowing properties including: apartment, office retail, industrial and rented condos. Typical uses inclde paydown of existing financing, partner buy-outs, equity recapture, tenant improvements, etc. Lender can structure extensions, earnouts and tailor made pre-payment options. Loan Size: $2,000,000-$10,000,000; Loan Terms: 2-5 years (co-terminus with senior); Rate: Transaction specific, competitive, usually "current pay"; Amort: Transaction specific, can be interest only in some cases. | | | Hot Money | New Single Tenant Non Recourse Financing Program This lender looks at tenant strength and real estate, they will lend on sub-investment grade single tenant properties with strong real estate attributes. Lender will consider lease terms as short as 7 or 8 years. Note that the loan terms are shorter than lease. Examples: 3 year loan term for 7-8 years of lease term, 6-10 year loan term for 15-20 years of lease term. Pricing is floating over LIBOR with cap or swap available. Some loans may be interest only depending on transaction strength. Rate: 30 day LIBOR + 3.50-5.00%; Loan Term: 3-10 years; Prepayment: Lockout minimum of 18 months, then combination of set prepayments (1-2%) or defeasance; Lender Fees: up to 1% | | | Hot Money | Aggressive Owner User Program: Strong National Lender Looking for Local Presence and Larger "Footprint" in Southern California. This program is benefitting from a massive US Government committment to help small businesses. This is the highest possible leverage in the marketplace. Current spreads over weekly Treasury Constant Maturity Index (TCM) are between 2.00-2.50 basis points depending on overall internal risk rating after underwriting. Maximum LTV is 75% on conventional but up to 90% with SBA component. Partial principal paydown allowed during fixed term with no penalty. Borrower also has the option to lock interest rates prior to close for 0.50 fee. This particular lender is looking for heathly 2 years trailing income on corporate and personal returns. They do not require depository relationship like a majority of other lenders near this spread level Current Interest Rates are as follows based on weekly Treasury Constant Maturity Index. 5 year fixed: 4.10-4.60% 7 year fixed: 4.78-5.28% 10 year fixed: 5.33-5.83% For the 90% transactions, the SBA adds a 2nd TD priced at the SBA debenture rate. Currently it is approximately 5.52% for 20 year fixed amortized over 20 years. Transaction Size: $750,000-$10,000,000; Loan Term: 20 years (10 years fixed with reset); Amort: 20-25 years; Max LTV: 75% for conventional, 90% with SBA component; Property Types: Owner User (usually industrial or office); Prepayment: 5-4-3-2-1; Fees: Par | | | 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 | Credit markets have calmed down the past few weeks: LIBOR has stopped rising, Treasuries yields are not dropping and credit spreads have narrowed slightly. CMBS: All eyes are on the bond pricing on a $761,000,000 pool, the first new "classic CMBS" securitization in years. The pricing will be a bellweather for investor demand and risk appetite for the bonds. A securitization director for a major bank indicated that he expects approximately $15 billion in CMBS issueance this year, compared to virtually zero in 2008 and 2009 and $270 billion in 2007......Stay tuned....David R. Pascale, Jr. | | | 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. | | | Speakers Corner | GSP led a panel discussion for 125+ Regional Real Estate Professionals at the "NAI Capital 2nd Quarter Semester Training" on June 9, 2010. The event was organized by NAI Capital's Chairman, Mike Zugsmith and other executives at NAI Capital. Panel discussion included a capital market update and summary of current trends from David Rifkind, Managing Director. Raffi Sarkissian, SVP also contributed a detailed breakdown of owner-user programs, rates, and current underwriting criteria. Marc Schillinger, VP provided an overview of multifamily lending with a focus on increasing probability of close. |
|
|
|
|
©2010 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
