GSPartners
|
|
|
|
Volume XVIII | No. 26 | June 24, 2010
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.35%
|
5 Yr US Treasury
|
1.95%
|
5 Yr Swaps
|
2.17%
|
|
12-MAT
|
0.40%
|
3 Month LIBOR
|
0.54%
|
10 Yr US Treasury
|
3.12%
|
10 Yr Swaps
|
3.12%
|
|
11th Dist COFI
|
1.82%
|
6 Month LIBOR
|
0.76%
|
30 Yr US Treasury
|
4.07%
|
|
|
|
| | | Transaction Description: | | $32,000,000 Construction Financing for a Partially Completed Multifamily Project in Hollywood, CA. GSP has arranged construction financing to complete a 180 unit, 5, 6 & 7 story multifamily project on LaBrea Avenue and Hollywood Boulevard, in the heart of Hollywood. Built over a 3-level, 465 car subterranean parking garage, the project also contains 14,000 square feet of ground floor retail space. Our client purchased the construction note from the previous lender and subsequently took ownership of the project. The project, which is approximately 70% complete, required a new loan to complete construction and cover the lease-up period. GSP completed an in-depth analysis of the current and pending supply of high-end rental units in Hollywood, and began marketing the financing package at a time when construction financing generally was a challenge to obtain; the result is one of the largest construction loans funded since the financial crisis began some two years ago. Our client is an institutional equity fund that is going to complete and manage the project for its own account. |
| | Rate: LIBOR + 3.25 with a 5.25% Floor | | Term: 3 years | | Amort: Interest Only | | LTV: 49.5% of "stabilized" value | | LTC: 58.5% (no additional equity required) | | Prepayment: Open | | Recourse | | Lender Fee: 1% | | Brokers: Steve Bram, Jonathan Lee |
|
|
| | | Hot Money | New Bridge Loan Program from Existing Lender One of our longtime relationship lenders just "got a chunk of money" for bridge loans. They are looking for higher yield but are willing to to high up stack, up to 80% LTV. Lender can structure around short -term risk or negative NOI for the "right story." Lender looking at empty building right now. No future fundings, need to fund entire loan day one. Minimum loan size: $10,000,000. Pricing: Floating rate starting at about 8%, with fees/participation to get to a 9-10% minimum IRR, depending on transaction dynamics. Term: 3-4 years; Non-recourse | | | Hot Money | Well Capitalized "Low Profile" Bank Funding Transactions $5,000,000 and Up Lender likes large transactions, as they have no maximum on loan amount. This is traditional bank lending for cash flowing properties, ie flexible prepayment, floating rate. For retail, office, and Industrial they underwrite to 65% LTV, 1.20 – 1.25 DCR. They will lend on select hotels, at a 1.5 DCR. Typical pricing is 6 month LIBOR (floored at 2.5%) + 2.5%, 5 year term, 25 year amort, no prepayment penalty. Southern California preferred. Borrower can opt to swap or buy a LIBOR cap in order to fix the rate. | | | 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. | | | 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 | Action packed day (Wednesday): First off, US new home sales plunged 33%, sinking to their lowest level since 1963. The drop was larger than expected. This is partly due to "training wheels coming off" as the government tax credit for buyers has expired. Sooner or later, the private markets need to stand on their own and this is part of "taking the hit" and a necessary but painful part of returning to a normal housing market. Then the Fed announced (again) that it will keep rates low for "an extended period." The Fed futures market is now predicting rock bottom rates until mid 2011, with some commentators speculating that it won't come until late 2011 or even 2012. Factors in the decision include: (1) European debt crisis (2) Recent lackluster jobs and housing reports, and (3) Very low inflation (and indeed deflation in some categories).....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. | | | 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.
|
|
|
|
|
|
|
|
