GSPartners
|
|
|
|
Volume XXI | No. 31 | August 14, 2013
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.18%
|
5 Yr US Treasury
|
1.48%
|
5 Yr Swaps
|
1.65%
|
|
12-MAT
|
0.15%
|
3 Month LIBOR
|
0.26%
|
10 Yr US Treasury
|
2.71%
|
10 Yr Swaps
|
2.88%
|
|
11th Dist COFI
|
0.95%
|
6 Month LIBOR
|
0.40%
|
30 Yr US Treasury
|
3.75%
|
|
|
|
| | | Transaction Description: | | $4,500,000 Cash-Out Refinance of an Unanchored Retail Center JJay Brooks recently placed the non-recourse cash-out refinance of a mid-western unanchored retail center. Although the center is 100% leased and occupied, additional funds were advanced to cover needed tenant improvements and leasing commissions and maintain occupancy. The ten-year term is fixed at 5.50% and amortizes over 30 years. Proceeds were sized to 75%. |
| | Rate: 5.50% Fixed | | Term: 10 Years | | Amort: 30 Years | | LTV: 75% | | Non-recourse | | Lender Fee: Par | | Advisor: JJay Brooks |
|
|
| | | Transaction Description: | | $1,800,000 Cash-Out Refinance of a Two-Tenant Office Building GSP’s David Stepanchak placed the cash-out permanent loan on a two-tenant, 100% occupied office building in a Southern California beach community. The non-recourse loan is fixed for 10 years at 4.50%, amortized over 25 years and carries a yield maintenance pre-payment penalty. |
Challenge: One tenant comprises 83% of the net rentable with turn-over event risk during the loan term. The Sponsor, an active Southern California real estate developer, was negatively impacted in the downturn that absorbed most of his liquidity and required the restructuring of two commercial real estate loans. The appraisal confirmed a lower valuation than anticipated and threatened loan proceeds. |
Solution: Although a return of equity was being requested, the 45% underwritten LTV and Class A condition of the asset mitigated the requirement for turn-over reserves. GSP worked with a national Life Insurance lender who invested the time to fully credit qualify the borrower prior to the issuance of an application. The Sponsor’s dedication to make capital providers whole was well documented proving that credit is so much more than a FICO score and balance sheet. This capital provider allowed cash-out proceeds to serve as liquidity to supplement the Borrowers’ balance sheet. The underwriter agreed to raise the LTV constraint so as to not negatively impact loan proceeds. |
| | Rate: 4.50% Fixed | | Term: 10 Years | | Amort: 25 Years | | LTV: 48% | | Prepayment: Yield Maintenance | | Advisor: David Stepanchak |
|
|
| | | | Mid-Market Joint Venture Equity from $4,000,000 GSP is working with a recently formed discretionary fund providing equity capital from $4,000,000. While most funds are targeting “bigger is better”, this organization is addressing a much needed niche for developers with project capitalizations from $15,000,000. Transactions considered are from Denver west and will include core assets plus hospitality. Management plays or physical reposition is favored although some ground-up construction will be underwritten. High IRR executions may allow for a refinance upon stabilization to return capital and postpone the sale for a longer hold period. |
| | | Hot Money | Nationwide Non-Recourse Mini-Perm Lender GSP is originating mini-perm transactions nationally for stabilized assets on a non-recourse basis. Story deals are welcome subject to going-in debt yields north of 8.7%. Credit issues are reviewed and approved prior to application. The five-year term is fixed in the high 4%/low 5% range for core assets up to $10,000,000. LTVs top out at 75% for commercial and 80% for multifamily. No TI/LC reserves are taken at close of escrow. Prepayment may be in the form of yield maintenance or a step-down. | | | 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 Partner Steve Bram will be a featured panelist at the upcoming International Management Network (IMN) Conference during their two-day event September 9th & 10th. The Borrowers’ Forum on Non-Bank Real Estate Finance & Subordinated Debt will be held in Santa Monica, California. Mr. Bram will be discussing financing options for value-add and out-of-favor product types. More conference information is available on the IMN website. | | | Pascale's Perspective | Treasuries, more Taper Talk….. The 10 year Treasury closed at 2.71% as both equity and bond markets are in agreement with the consensus reached in a survey of 48 economists released yesterday: (1) The Fed will start tapering next month, lowering their monthly bond purchases from $85 billion to $75 billion; (2) The bond purchase program will end in mid-2014. The July retail sales were “Goldilocks” ie not to good but not too bad. However, they were the first bit of economic data for the 3Q 2013 and they weren’t bad enough for the Fed to deviate from the generally accepted September 2013 start to tapering. European GDP data indicated an emergence from their double dip recession, which lessens the “fear factor” that often spurs treasury buying. The good news is that credit spreads are stabilizing and/or narrowing slightly…. …Stay Tuned… David R. Pascale, Jr. |
|
|
|
|
©2013 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
