GSPartners
|
|
|
|
Volume XX | No. 42 | October 24, 2012
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.21%
|
5 Yr US Treasury
|
0.76%
|
5 Yr Swaps
|
0.88%
|
|
12-MAT
|
0.16%
|
3 Month LIBOR
|
0.32%
|
10 Yr US Treasury
|
1.79%
|
10 Yr Swaps
|
1.82%
|
|
11th Dist COFI
|
1.07%
|
6 Month LIBOR
|
0.59%
|
30 Yr US Treasury
|
2.95%
|
|
|
|
| | | Transaction Description: | | $5,000,000 2nd Funding for Los Angeles Hospitality GSP placed a fixed rate, $20,000,000 permanent loan on a stabilized Los Angeles hotel last year with a major Life Insurance carrier. The Borrower recently approached GSP to secure an additional $5,000,000 to cover estate taxes. Rather than solicit traditional mezzanine capital, GSP approached the senior lender who held the loan on-book for an additional funding. As the collateral was very low loan-to-value, the senior lender agreed to the unscheduled 2nd funding. The funding as a senior note was optimal in rate and term over obtaining mezzanine debt. GSP was also instrumental in putting the Credit Committee presentation together and assisted in engaging a qualified appraiser who understood the complex ownership of the Property. |
| |
|
| | | Transaction Description: | | $1,914,000 Cash-Out Refinance of 6-Unit Studio City Apartment Building GSP successfully arranged the $1,914,000 construction loan take-out on a 6-unit apartment building in Studio City, California. The loan is fixed for 5 years at 3.65% prior to floating at LIBOR+2.25% (floored at the start rate) for the remainder of the 30 year term. |
Challenge: Lenders have seasoning requirements to allow for a return of equity to the Borrower. This is especially relevant when the collateral has only recently commenced operations. With just few months of occupancy, the building had very limited cash flow information, and was therefore difficult to underwrite. Due to the limited size of the complex, this request exceeded most Lenders’ standard loan per unit constraint. |
Solution: GSP emphasized the quality of the collateral and provided the Lender with comparable rents and values to support the high loan per unit. GSP negotiated an exception from normal guidelines to obtain the additional requested cash-out. GSP was also able to negotiate an open fourth year to prepayment to accommodate the Borrower's request to potentially sell the units as condos. |
| | Rate: 3.65% Fixed for 5 Years; then LIBOR+2.25% | | Term: 30 Years | | Amort: 30 Years | | LTV: 70% | | Prepayment: 3, 2, 1 | | Recourse | | Lender Fee: Par | | Brokers: Marc Schillinger, Andrew Hornblower |
|
|
| | | | Hospitality Mini-Perm Financing from $5,000,000 Nationwide Limited and Select Service & Extended Stay financing is now available to 70% of value for experienced hospitality owner/operators. The subject property must carry a flag, present stabilized cash flow and be less than 10 years old. Rates start at LIBOR+5.50% floored at the fully indexed rate with no prepayment after the 2nd year. Fixed rate terms may also be available but will require yield maintenance prepay. Terms are from three to five years, amortized over 25 years for this recourse program. Two or three units may be combined to reach the $5,000,000 minimum. |
| | | Hot Money | Insane LifeCo Pricing George Smith Partners is working with a Life Insurance Company looking to augment their portfolio with low-leveraged, high quality real estate loans and cut rates this week for transactions to 55% LTV. Loans from $5,000,000 to $100,000,000 offering an 11%+ debt yield will be priced from 2.50% fixed for five-years or 3.25% for a 10-year term. The 10-year opens with five-years of interest only before rolling into a 25 or 30 year amortization schedule. This pricing is reserved for core institutional assets nationwide. | | |
If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com.
| | | In The News | National Real Estate Investor polled 16 Commercial Real Estate Industry pros on their thoughts of the impact the 2012 Presidential Election will have on Commercial Real Estate. Published quotes from GSP Founding Partner Gary E. Mozer and other real estate contemporaries may be found here. | | | Pascale’s Perspective | ”Perfect Storm” for Borrowers keeping coupons low…. US Treasury yields dropped again on renewed “fear factors” such as lower corporate earnings (along with lower guidance on 2013) and downgrades in Spain. In addition, loan spreads are narrow as the CMBS rally continues as bond buyers looking for yield are now bidding on the lower bond tranches. The paradox working in borrowers’ favor is that there is risk aversion in the Treasury market and risk appetite in the CMBS and debt markets. Rates are in the 4.50%-5.00% range for full leverage CMBS; life companies and Fannie/Freddie are lower. Lots of borrowers are taking advantage of the low rates in order make returns in a period of generally low rent growth (some sectors are seeing rent growth such as core apartments). ...Stay Tuned... David R. Pascale, Jr. |
|
|
|
|
©2012 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
