GSPartners
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Volume XVIII | No. 44 | December 15, 2010
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KEY RATE INDICES
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Prime Rate
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3.25%
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1 Month LIBOR
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0.26%
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5 Yr US Treasury
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2.08%
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5 Yr Swaps
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2.35%
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12-MAT
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0.33%
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3 Month LIBOR
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0.30%
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10 Yr US Treasury
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3.47%
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10 Yr Swaps
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3.65%
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11th Dist COFI
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1.65%
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6 Month LIBOR
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0.46%
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30 Yr US Treasury
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4.55%
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| | | Transaction Description: | | $4,100,000 Refinance of a Creative Office Property in Southern California
GSP successfully closed a 10 year, fixed-rate loan for a newly occupied office building. GSP was able to locate a lender that was comfortable with the fact that one of the two tenants was not yet in occupancy at loan funding.
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| | Rate: 6.25% | | Term: 10 years | | Amort: 25 years | | LTV: 65% | | Prepayment: Yield Maintenance | | Lender Fee: 1% | | Brokers: Steve Bram, Allison Higgins |
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| | | Hot Money | Nationwide Perm Lender Offering Fixed Rates with No Prepayment Borrowers can lock in a fixed rate for 5 years and retain flexibility with this program. Rates are usually 6.00-6.50% (note that this is competitive with CMBS due to Treasury run up). Lender will go up to 65-75% LTV for office, medical office, industrial retail, healthcare and some special purpose. Lender will not lend in MI, FL, NV or AZ. Loan Sizes: $1,000,000 - $9,000,000; Loan Term: 5 years or 5 + 5; Amortization: 25 years; Max LTV: 65-75%; Min DCR: 1.25-1.45; Lender Fee: 1.00%; Prepayment: None; Recourse | | | Hot Money | CMBS Update-Spreads Tighten, Coupons are Higher due to Treasury and Swap Volatility The good news is that the CMBS market is strong with new lenders appearing (or reappearing) at the rate of 1-2 a month. More lenders equals heightened competition for transactions. Also note: Hotel transactions are being quoted. Some high profile hotel loans have funded recently (including large portfolios and big one off transactions such as Times Square Hilton). The not so good news is treasury and all in swap rates are spiking and driving up rates. Right now, 10 year loans are being priced as low as Swaps + 2.25-2.50 or about 5.90%. Historically, this is still a good non-reourse rate for office, retail, industrial, hotels, etc. Some lenders will size to a 9.5% debt yield, 75% LTV. Forecasts call for big volume in 2011. | | | 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% | | | 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. | | | Pascale's Perspective | Treasury Yields Continue Their Spike The 10 year is over 3.50% up over 110 bps in 80 days. Some interesing data on US debt purchasers: China is not the largest holder of Treasuries, it has been supplanted by the Federal Reserve. Also, China has been selling long term bonds and buying short term. Other large purchasers have followed suit. This is part of the market pressures putting upward pressure on the long end of the curve. Notes from the recent Fed meeting indicated no change in policy, no expansion or lessening of the bond purchase program......Stay tuned..... David R. Pascale.... | | | "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 more.... | | | 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. |
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©2010 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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