GSPartners
|
|
|
|
Volume XVIII | No. 27 | June 30, 2010
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.35%
|
5 Yr US Treasury
|
1.76%
|
5 Yr Swaps
|
2.04%
|
|
12-MAT
|
0.40%
|
3 Month LIBOR
|
0.53%
|
10 Yr US Treasury
|
2.92%
|
10 Yr Swaps
|
3.01%
|
|
11th Dist COFI
|
1.79%
|
6 Month LIBOR
|
0.75%
|
30 Yr US Treasury
|
3.88%
|
|
|
|
| | | Transaction Description: | | $4,274,000 Multifamily Refinance with Cash Out GSP secured Non-Recourse debt on a 48 Unit Multi-Family property in Los Angeles in 18 days from application to closing! The borrower owned the Mid Wilshire property for over 10 years. He had limited debt on it and he was looking to get about $4,000,000 in cash out.
|
Challenge: (1) The borrower wanted to close by the end of the June, which gave GSP and the lender less than 21 days from the day the borrower executed the application to fund and record the loan.
(2) The property was located in a submarket of Los Angeles that is experiencing rising cap rates and some other market fluctuations. |
Solution: (1) GSP secured a lender that was comfortable with that timeframe. Our experience with the DUS process and Multi-Family loans helped expedite the process and allowed the borrower to close 3 days before the end of June.
(2) GSP showed that this property was superior to other properties in the area and that it commanded higher rents and a better cap rate .
|
| | Rate: 5.38 | | Term: 10 years | | Amort: 30 years | | LTV: 75% | | DCR: 1.25 | | Prepayment: Yield Maintenance | | Non-recourse | | Lender Fee: Par | | Broker: Shahin Yazdi |
|
|
| | | Hot Money | Life Company Funding Fixed Rate, Non Recourse Bridge Loans Nationwide Lender will consider Multifamily, Office, Industrial, Retail and selected Hospitality or Marinas. Lender understands Marina financing which is unique. Properties can be stabilized, near stabilized, partial lease up. No construction, but tenant improvements ok. Transaction sizes considered range from $20,000,000 to $40,000,000. Max LTV: 75%. Fixed rates range from 6% to 9%, depending on property dynamics. Typical structure is 2 year bridge with 2 x 1 year extensions. Interest only available for much of the loan term. Lender fee is usally 1.0%. | | | 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 | Investors continue to pour money into US Treasuries, with the 10 year yield plunging to below 3%. We are seeing certain fixed rate loans for apartments in the sub 5% range, for lower leverage in good markets. CMBS pricing is in the mid 5% range for 5 year terms and about 6% for 10 year terms. The flight to quality is fueled by predictions of (1) a "stagnant and tepid" recovery or (2) a "double dip" recession. Jobs and housing are key and both sectors are "sputtering" Recent debate among world leaders at the G20 and among US policymakers center on whether to maintain stimulus or rein in deficits. Its the old Keynes vs Friedman argument, I guess we are going to find out who was right?......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.
|
|
|
|
|
|
|
|
