FINfacts Newsletter XVIII-44

Volume XVIII  |  No. 44  |  December 1, 2010   Letter to the Editor KEY RATE INDICES Prime Rate  3.25% 1 Month LIBOR  0.27% 5 Yr US Treasury  1.64% 5 Yr Swaps  1.85% 12-MAT  0.33% 3 Month LIBOR  0.30% 10 Yr US Treasury  2.96% 10 Yr Swaps  3.01% 11th Dist COFI  1.66% 6 Month LIBOR  0.46% 30 Yr US Treasury  4.23%     Transactions of the Week Transaction Description: 3 Year Asset Based Loan for Owner-User  GSP arranged non recourse financing for a 21,000 SF Industrial Building Challenge: (1) The company had very weak historical financials so they could not qualify for “conventional” loan programs (2) One of the partners would not sign recourse (3) Their current lender filed an NOD because the loan was due and we only had a limited amount of time to close Solution: (1) GSP found an Asset based lender that was willing to lend the borrower the money based on the LTV vs the cash flow of the asset (2) GSP convinced the lender to not require recourse since there was so much equity in the property (3) GSP worked with the lender to produce a commitment within 1 week of submitting the application Rate: 8.99% Term: 3 years Amort: Interest Only LTV: 60% Prepayment: None Non-recourse Broker: Shahin Yazdi Transaction Description: $1,600,000 Permanent Financing for 30,000 s.f. Multi-Tenant Industrial Property in Fort Worth, Texas GSP arranged financing for this late 70's vintage 2-building property. Property is well located just south of the DFW airport. DFW airport is the third busiest in the US. Dallas is a major trade hub with no port, the industrial market surrounding DFW is tight. Property is 86% occupied, 9 tenants. Challenge: Property is 30 years old with low clear heights, much of the surrounding product is newer, low loan request limits the pool of lenders Solution: Loan is recourse from an insurance company, and priced at a premium above a typical "A" industrial property. Rate: 6.75% Term: 10 years Amort: 25 years LTV: 70% DCR: 1.36 Prepayment: Yield Maintenance Recourse Lender Fee: 2.0% Brokers: Steve Bram, David R. Pascale Hot Money California Portfolio Lender Funding Mini Perms, $5,000,000 and up, 3 or 5 Year Fixed Rates at 3.74% (3 year) and 4.50% (5 year)   This program is ideal for borrowers wanting fixed rates with some flexibility, ultra low 3rd party costs, and simple docs.    Loans are typically 50% recourse and priced over the corresponding Swap rate.   Some 7 year loans will be considered on a case by case basis.   Leverage: Up to 1.25 DCR / 70% LTV for apartments, 1.30 DCR / 65% LTV for office or industrial, and 1.35 DCR / 60% LTV for retail.   Loans can also float over LIBOR with a spread or "ABR (Alternative Base Rate)" with start rates as low as 2.77%!  Amortization: 30 years for apartments, otherwise 25 years.  Simple process and documentation: Legal and processing costs are about $3,500, property tax impounds only.   Lender fee: 1.00% Hot Money Aggressive "Full Leverage" Permanent Program Funding Loans $15,000,000 and up, Nationwide This lender is pushing leverage in to 1.15 DCR and 80% LTV for good transactions. It's a "one-stop shop" senior/mezz or B note for stabilized "Core 4" property types plus hotels.  Transaction Size: $15,000,000 and up; Rate: 5.50-6.50% approx; Amort: 25-30 years; Max LTV: 80%; Min DCR: 1.15. Non-recourse Property Types: Apartments, Office, Retail, Industrial, Hospitality;  Prepayment: Defeasance or Yield Maintenance; Fees: 0.25-0.50%; Geography: Nationwide Hot Money Approved Freddie Mac Mezzanine Lender Actively Investing Behind Senior Agency Debt, Lending up to 90% Combined LTV and 1.05 DCR Lender is a national multi-family real estate mezzanine lender. Their fixed rate loans are ideal for new acquisitions or cash-in refinancing. $1 million is the minimum loan amount and the loan term is coterminous with the Freddie Mac loan. Qualifying properties include stabilized, conventional Class A and B multifamily properties in good physical condition with opportunity for improved performance. 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. "Kafkaesque Moments With A Special Servicer" - A New Blog Post by Nathan Auslander Special Servicers generally are charged with obtaining the highest net present value (NPV) when disposing of assets (mostly non-performing notes). However, it’s not that simple, as Special Servicers also factor in issues such as......click here to read the entire post 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.