GSPartners
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Volume XXI | No. 12 | March 27, 2013
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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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0.20%
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5 Yr US Treasury
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0.73%
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5 Yr Swaps
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0.97%
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12-MAT
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0.18%
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3 Month LIBOR
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0.28%
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10 Yr US Treasury
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1.85%
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10 Yr Swaps
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2.01%
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11th Dist COFI
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0.96%
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6 Month LIBOR
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0.45%
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30 Yr US Treasury
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3.09%
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| | | Transaction Description: | | $110,000,000 in Debt Financing and Joint Venture Equity for the Acquisition of 1,127 Multifamily Units GSP arranged $64,800,000 in first mortgage debt financing and $31,700,000 in joint venture equity (96.5% of the Sponsor’s total costs) on a 396-unit Class A- multifamily asset and a 379-unit Class B+ multifamily asset, both in the Pacific Southwest. The transactions include 65% loan-to-cost, LIBOR-based interest only non-recourse first mortgage financing on each property from a money center bank. Equity is a 90/10 co-invest between the Sponsor and an institutional equity partner. Additionally, GSP arranged $13,100,000 in joint venture equity for the same sponsor on a third Pacific Southwest 352-unit Class A multifamily asset under the same 90/10 structure. All three properties will undergo interior and exterior renovations financed by future funding’s from the first mortgage lender, which will equip these assets with some of the best amenity packages and highest quality interiors in the submarkets. |
| | Rate: Senior Debt: LIBOR+225 | | Term: 5 Years | | Amort: Interest Only | | LTC: 65% | | Non-recourse | | Lender Fee: 0.50% | | Brokers: Gary E. Mozer, Katie Rodd |
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| | | Transaction Description: | | $3,000,000 Purchase to 85% of Acquisition Price George Smith Partners placed the $3,000,000 acquisition debt of a multi-tenant mixed use property in Ventura, California. Although one of the Borrowers runs an operating company from this location, the firm utilizes less than 51% of the net rentable and therefore would not qualify for SBA financing. Ownership between the Borrower and the Operating Company also differs, necessitating the need for conventional financing. The Buyer/Sponsor was requesting maximum leverage, allowing him to keep a majority of his capital in his operations. The 15 year term is fixed at 4.20%, amortized over 20 years. |
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| | | | Ground-Up Construction Resurgence George Smith Partners identified a regional bank expanding their balance sheet to include ground-up construction requests in California and Texas to 75% of total cost. Multi-family, office, retail, industrial and flagged hospitality will be considered to $15,000,000 on-book. Co-participation will double their capacity. Non-multi product will require a significant amount of pre-leasing. The prime based pricing is floored at 5.25% and will carry the option of a mini-perm at stabilization for a 5 or 7 year fixed term and step-down pre-payment. |
| | | Hot Money | Nationwide Non-Recourse Bridge & Mini-Perm Program from $1,000,000 to $15,000,000. GSP is working with a national balance sheet bridge-loan provider advancing to 70% of purchase price/65% on refinances on a non-recourse basis. This nationwide program targets reposition assets in major metropolitan markets. This capital provider will advance to 100% of good news dollars going forward beyond the initial funding. Note purchase financing will be considered for performing, non-performing and distressed transactions. Assets will be B quality or better, although sponsor qualifications are less stringent. Pricing from the 6% to 7% for 3 to 5 years. Larger Class A assets may qualify for a coupon in the high 5% range. All transactions are interest only with one point origination and one point upon exit. | | | 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 | | | Pascale's Persective | Cyprus & Italy All in coupons stay tight as indices fluctuate….. ”Fear Factor” on Europe is back again, putting a damper on equity rally and fueling a Treasury rally…. Markets are still nervous about Cyprus as this bailout is different than recent agreements for Greece. This one was “messy” and highlighted Europe’s lack of an overall mechanism to deal with banking problems. Plus some senior bondholders may end up taking “haircuts” aka another controlled default. Today’s jitters are over the Italian government’s inability to form a coalition and the imminent exit of market favorite, Mario Monti, who today said “I can’t wait to leave office.” This will certainly lead to uncertainty in one of Europe’s major economies. Treasury yields plunged to as low as 1.82% on the 10 year T, now at 1.84…… Focus on Swaps: The 10 year Swap spread (a component of CMBS loan pricing) has doubled in recent weeks. After a long period at about 8 bps, it now stands at 17.5 bps…. CMBS spreads also have widened very slightly in the past week (about 2-5 bps)….. Overall coupons are still attractive, in the 4.00% range for new quotes. ...stay tuned... David R. Pascale, Jr. |
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©2013 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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