GSPartners
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Volume XX | No. 47 | December 5, 2012
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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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0.21%
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5 Yr US Treasury
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0.61%
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5 Yr Swaps
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0.76%
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12-MAT
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0.17%
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3 Month LIBOR
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0.31%
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10 Yr US Treasury
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1.59%
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10 Yr Swaps
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1.66%
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11th Dist COFI
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1.01%
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6 Month LIBOR
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0.53%
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30 Yr US Treasury
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2.78%
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| | | Transaction Description: | | $11,000,000 Refinance of a 97% Occupied Los Angeles Retail Center GSP arranged the refinance on a 2005 constructed, 59,000 square foot retail center in the San Fernando Valley area of Los Angeles, California. The Borrower was cash flow driven and GSP secured an Interest Only 10-Year fixed term to maximize monthly proceeds after debt service. |
Challenge: Despite the relatively new construction and the 97% occupancy at the property, rental rates in the San Fernando Valley had experienced an overall decline over the past three years. The majority of the subjects’ leases will roll during the new loan term, predominantly in the next three years. The lease-roll added a perception that gross rental income could slide upon tenant renewal, adversely impacting the net income. |
Solution: GSP demonstrated that sales for national tenants at this location were particularly strong, and the overall cost of occupancy was below market. GSP identified a lender that understood the metrics of these specific tenants and how they differentiated themselves from other retailers in the local market. The Lender issued an application for 60% leverage and 10 Years of Interest Only. The property appraised value netted a 53% LTV allowing the Borrower to maximize cash flow over the next ten years. |
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| | | Transaction Description: | | $8,500,000 Cash-Out Refinance of a Multifamily Portfolio GSP placed the cash-out refinance of a four-asset, San Fernando Valley multifamily portfolio totaling 91 units. The Borrower requested a single loan for the non-contiguous assets, replacing the multiple loans that were encumbering the properties. The new debt allowed the Sponsor to retire a 6% loan and return over $500,000 of equity while simultaneously improving the cash flow after debt service by a significant amount. The new loan is fixed for 5 years at 3.625% and adjusts for the remaining 25 years of the 30 year term, limited to a 1.20 DCR and 75% LTV. GSP was able to secure the Borrowers’ requested single fixed-rate loan with a flexible prepay options. |
| | Rate: 3.625% | | Term: 5 Years Fixed then LIBOR+2.25% | | Amort: 30 Years | | LTV: 75% | | DCR: 1.20 | | Prepayment: 3,2,1,1,1 open | | Recourse | | Lender Fee: Par | | Broker: Jason Gaffner |
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| | | | Life Company Non-Recourse Debt from $2,000,000 GSP identified a national Life Insurance Company funding transactions as small as $2,000,000 on a non-recourse basis. LifeCo transactions under $5,000,000 typically require a repayment guarantee. Terms from five years to 25 years are available with flexible pre-payment options. Core assets are financed to 65% of market value, 70% for multifamily and student housing. Self-storage and unanchored retail have a 50% advance rate. Forward commitments may also be locked up to six months for 5 basis points per month after the first three months for free. |
| | | Hot Money | High Leverage Non-Recourse Construction Debt GSP is working with an institutional lender funding very large construction and reposition transactions in gateway cities. Loan requests of $25,000,000 and up will be underwritten to 85% to 90% of total costs on a non-recourse basis. Hospitality and spec (un-leased) assets will be considered with the proper metrics. Yields are risk based: high single-digit to low double-digit depending on the asset and leverage. Terms are limited to three years. | | | 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 |
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©2012 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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