GSPartners
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Volume XXI | No. 17 | May 1, 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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0.65%
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5 Yr Swaps
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0.82%
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12-MAT
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0.17%
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3 Month LIBOR
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0.27%
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10 Yr US Treasury
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1.63%
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10 Yr Swaps
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1.83%
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11th Dist COFI
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1.00%
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6 Month LIBOR
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0.43%
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30 Yr US Treasury
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2.83%
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| | | Transaction Description: | | $5,550,000 Acquisition Bridge Loan for Soon to Be 89% Vacant Shopping Center George Smith Partners successfully placed the 72% LTC bridge loan for the acquisition and reposition of a Los Angeles based grocery anchored shopping center. The interest-only coupon floats at 250 bps over LIBOR and is currently under 3.0%. |
Challenge: Although the property is 100% occupied, the grocery anchor that represents 89% of the gross leasable area will vacate in four months at their lease maturity. The property also has a legacy environmental issue from a former dry cleaning plant. |
Solution: GSP identified a capital provider comfortable with the Sponsor’s expertise and the property’s leasing potential as demonstrated with letters of intent for 41% of the space to be vacated. GSP worked with the lender to structure reserves containing objective criteria for releasing the funds at various project stages. The new Sponsor confirmed an abatement plan to resolve the environmental issue and obtained closure from the local governmental agency. |
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| | | Transaction Description: | | $1,350,000 Cash-Out Refinance of a Mixed Use SoCal Asset GSP placed the cash-out refinance of a restaurant anchored office building in Southern California. Additional loan proceeds were used to consolidate non-related, higher priced debt. The 10 year term is fixed for the first five years at 3.75%, amortized over 25 years. The rate will adjust to then market and will be fixed for the second five-year term subject to a rate cap of 6.75%. Third party due-diligence costs were limited to $8,500. This portfolio lender does not charge a pre-payment penalty. |
| | Rate: 3.75% Fixed for Five Years | | Term: 10 Years | | Amort: 25 Years | | Prepayment: None | | Recourse | | Lender Fee: 1/2 Point | | Brokers: David Stepanchak, Jason Gaffner |
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| | | | Non-Recourse Bridge Debt from 3.0% George Smith Partners is placing non-recourse reposition loans at bank pricing for larger assets. The LIBOR based capital provider will fund without a repayment guarantee to 65% of current value or 75% with a warm-body repayment guarantee. Transactions from $15,000,000 to $40,000,000 are priced from 275 to 325 over 30 day LIBOR, and are not subject to a floor. Assets in the Western United States are considered with positive debt coverage in place at funding. |
| | | Hot Money | International Equity Fund GSP is working with an international firm with 700+ employees in 10 countries possessing ample capital to be deployed. With almost $78 billion under management, their real estate allocation is poised for global growth. Equity contributions from $20,000,000 up to several hundred million dollars are available to quality borrowers. Co-invest and IRR hurtles are transaction specific although the fund is experienced with complicated transactions and embraces structure. | | | 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. | | | Speakers Corner | Founding Principal Gary M. Tenzer will be moderating the finance panel at the RealShare Investment & Finance convention Tuesday June 18th. The two-day event will be held at the Westin Gaslamp Quarter in San Diego starting on Monday the 17th. An early registration discount is available here. | | | Pascale’s Perspective | Equity and Bond Prices Simultaneously Peaking This is not “natural” (unless you consider all the world’s central banks pushing the accelerator as natural)……. This week we are seeing the Dow/S&P hitting all time records, bond prices pushing Treasury yields to near record lows AND negligible inflation (potential deflation?)….. The “new normal” is taking hold but we don’t know what comes after….. Today’s Fed announcement indicating that short term rates and bond buying are continuing and bond buying may be increasing showed that the “training wheels” are still on for the time being. Credit spreads are still tight and, yes, its still a great time to get fixed rate financing (just ask Apple and JC Penney). …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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