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| Volume XIX | No. 3 | January 19, 2011 |
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| KEY RATE INDICES |
| Prime Rate |
3.25% |
1 Month LIBOR |
0.26% |
5 Yr US Treasury |
1.93% |
5 Yr Swaps |
2.20% |
| 12-MAT |
0.32% |
3 Month LIBOR |
0.30% |
10 Yr US Treasury |
3.34% |
10 Yr Swaps |
3.46% |
| 11th Dist COFI |
1.57% |
6 Month LIBOR |
0.46% |
30 Yr US Treasury |
4.56% |
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| Transaction Description: |
| $12,400,000 Fixed-Rate, Bridge Loan for the Refinance and Lease-Up of an Office Building GSP successfully arranged a 24 month bridge loan, to enable our borrower to lease up/stabilize a 155,000 sq ft office property. The new loan pays off existing financing, funds future tenant improvements and leasing commissions, provides an interest reserve to service the debt until all tenants begin paying rent in October 2011, and reimburses the borrower for tenant improvements and leasing commissions spent prior to the loan funding. The Sponsor originally intended to build a mixed-use property on the site. However, as the market changed, the borrower decided to keep the existing structure and lease as office. In 9 months, the Sponsor successfully brought the property from almost entirely vacant to 42% occupied and 82% leased with very strong tenants. The borrower’s existing loan was coming due in 1st quarter 2011. The new bridge loan will allow time to lease up to market occupancy of 90%. |
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| Rate: 9.5% |
| Term: 24 months |
| Amort: Interest Only |
| LTV: 70% of stabilized value |
| Prepayment: 10 months yield maintenance |
| Non-recourse |
| Brokers: Steve Bram, Allison Higgins |
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| Hot Money |
Life Company with Large 2011 Allocation for Loans Pricing Aggressively With attention focussed on the return of CMBS, portfolio lenders are reminding us that they never left and are "back" as big as ever. GSP recently met with a major life company looking for institutional quality transactions $5,000,000 to $50,000,000. Rates for 10 year, fixed rate as low as Swaps + 1.40% (4.86% today). Rates for 5 or 7 years are Swaps + 1.50% - 1.75% (3.70% for 5 years lowest spread) Amort: 30 years, Max LTV: about 60%. Lender services their own loans, so future changes in structure can be accomodated. Forward rate locks available up to 12 months, typical spread premium is 3-5 bps per month.
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| Hot Money |
Specialty Single Tenant Lender Offering Unique Financing Program for Single Tenant Credit Net Lease Transactions GSP is in application with this lender on a CVS transaction. Pricing is 5.50% fixed with no prepayment penalty. Lender will consider 10 year term with a 20 year amortization (10/20) or 15/15 or possibly 15/20 structures. Must have remaining lease term. Loan sizes considered are generally $2,000,000 to $10,000,000, tenant must be investment grade. Lender fee is 1.0%.
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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
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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
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| 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.
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| Pascale's Perspective |
2011 Starting Strong The new year has brought good news for commercial real estate on several fronts. CMBS issuance is ramping up, with a $2.5 billion securitization set for March. That's the biggest pool since 2007. Various estimates for 2011 total issuance average about $50 billion. Life company allocations are back to mid-decade levels, with some institutions targeting $3 billion and up. The return of transactional velocity? Nationwide commercial real estate sales hit $21 billion in December, the highest month since late 2007. This tops off a year of $115 billion total, more than doubling the 2009 total. Cap rate compression continues with office cap rates dropping a stunning 200 bps in 2010. It looks like 2011 will rev up as banks and other lenders step up REO sales as fundamentals improve......Stay tuned.....David Pascale, Jr.
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| 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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| ©2011 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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