GSPartners
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Volume XXI | No. 14 | April 10, 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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0.90%
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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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1.80%
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10 Yr Swaps
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1.94%
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11th Dist COFI
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1.00%
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6 Month LIBOR
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0.44%
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30 Yr US Treasury
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3.00%
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| | | Transaction Description: | | 10 Day Close on 40% Occupied Multifamily for $3,150,000 GSP’s Bryan Shaffer successfully placed the acquisition debt of for a distressed 208 unit multifamily asset that is 40% occupied. The transaction from introduction to funding executed in 10 days. |
Challenge: The subject property had been in receivership and was poorly managed. The partnership is a mix of US and international investors with limited US Credit, negating any opportunity for a recourse transaction. The asset is severely distressed, operating at break-even cash flow. The court required a quick close execution upon their approving our purchasers’ bid. |
Solution: Utilizing our long-term relationships, market expertise and experience with international buyer, GSP was able to quickly identify the correct lender and close the transaction within the 10 day deadline. This capital source was responsive to the request and quickly became comfortable with the ownership and quality of the asset. Mr. Shaffer structured the loan to allow for an additional $1,000,000 construction budget to bring the asset up to market competitiveness. |
| | Rate: 11% | | Term: 18 Months | | Amort: Interest Only | | LTC: 67% + $1,000,000 Rehab | | DCR: 1.0 | | Non-recourse | | Broker: Bryan Shaffer |
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| | | Transaction Description: | | Five-Week Life Company Close on 65% Occupied Office Building J. Jay Brooks placed the no-cash-out refinance of a single tenant office building in a secondary Colorado market. The asset is leased to a single tenant for ten years but was only 65% occupied at the time of funding. The tenant will expand into the remaining vacant square footage but will not be paying rent on the additional space until year-end. The $5,000,000 non-recourse loan underwrote to near break-even coverage at funding. The rate is fixed at 5.0% for ten years. There was no hold-back of funds subject to the tenant expansion. |
Challenge: The existing loan matured and required immediate funding. The Borrower was not willing to process two transactions, initially a bridge loan today and then the permanent take-out once the property fully stabilizes in December/January. A high loan to value relative to life company underwriting was needed at funding to fully take-out the existing capital. |
Solution: GSP identified a life insurance company with a very flat decision making process who could respond quickly without having to pole committee on underwriting and loan structure. The five-week due diligence from application to funding satisfied the existing lender and allowed us to close in a timely fashion. The LifeCo underwrote the credit of the lease guarantor and was comfortable that they would expand into the remaining vacant space and increase the net cash flow to an acceptable DCR by January 2014. |
| | Rate: 5.0% Fixed | | Term: 10 Years | | LTV: 80% | | Recourse | | Broker: J. Jay Brooks |
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| | | | Hospitality: Debt, Mezzanine Debt, JV Equity George Smith Partners is actively placing the entire capital stack on existing hotel/hospitality transactions with a single capital provider on a national basis. Bridge/reposition and perm debt is available under this program from $15,000,000 and up to 75% LTC/LTV. Transactions that cover to a 1.0 DCR or better are funded without a repayment guarantee. Sub-10% debt yields are funded on business projections with a 12% debt yield exit. DPOs/story deals are welcome. Most flags are considered with Hilton and Marriott favored. Mezz-debt and joint venture equity requests are underwritten to quality experienced Borrowers from $5,000,000. Ground-up construction is not currently being considered by this $1.4 billion fund. |
| | | Hot Money | More Mezz… Construction and Permanent A national hedge fund is flexing their balance sheet with the addition of construction or perm mezzanine debt behind a bank or Wall Street CMBS execution. Preferred equity may be structured if a tri-party agreement is unavailable. The 10 year term is co-terminus with the CMBS first, fixed at 10% Interest Only with a one point origination fee and one point exit fee. Construction mezz will be sized and structured on a case-by-case basis. This is true balance-sheet financing as the A Piece is not resold/leveraged and thus affords more flexibility to what may be executed. Loan requests will start at $5,000,000 & up. | | | 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 | Managing Directors Gary E. Mozer and David Rifkind are both quoted this week in GlobeSt.com. Mr. Mozer's observations on the return of institutional equity investors is available on-line. Mr. Rifkind's comments on the largest Bank of the Internet (BofI Federal Bank) closing may be found here. |
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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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