GSPartners
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Volume XXI | No. 33 | August 28, 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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0.18%
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5 Yr US Treasury
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1.58%
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5 Yr Swaps
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1.77%
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12-MAT
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0.15%
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3 Month LIBOR
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0.26%
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10 Yr US Treasury
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2.77%
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10 Yr Swaps
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2.97%
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11th Dist COFI
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0.95%
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6 Month LIBOR
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0.39%
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30 Yr US Treasury
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3.74%
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| | | Transaction Description: | | $6,510,000 Rate & Term Refinance for a San Fernando Valley Industrial Asset GSP secured a no-cash-out refinance of a single tenant industrial building located in the San Fernando Valley in Los Angeles. The borrower was seeking to improve his existing rate with a fixed coupon but required flexibility to prepay the loan in the event of a sale. The loan was rate locked at application; fixed for four years at 3.50%. The loan will then float the final three years of the 7 year term at LIBOR+1.75%. The new financing allows for a step-down prepayment with no penalty after the third year. |
| | Rate: 3.5% Fixed for 4 Years | | Term: 7 Years | | Amort: 25 Years | | LTV: 70% | | Prepayment: 3,2,1 open | | Recourse | | Lender Fee: Par | | Advisors: Raffi Sarkissian, Tylene Turner |
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| | | Transaction Description: | | $1,450,000 Medical Office DPO Refinance GSP placed the refinance debt for a negotiated discounted payoff of a CMBS loan collateralized by a 42,000 square foot Medical Office Building. Prior to the discount, the loan balance was approximately $6,200,000. The bridge loan is fixed at 12% for 18 months, allowing time for the Borrower to increase occupancy from the 30% at close. |
Challenge: The subject property went into default in the market down-turn when market rents declined and vacancy spiked. A major tenant vacated when given the option to buy their own property at a lower cost than renting. The Special Servicer agreed to a substantially discounted loan payoff in exchange for a very brief window to close. |
Solution: Certainty of close was most critical. GSP worked closely with the lender to push processing and worked with the 3rd party vendors to secure draft reports allowing for closing to execute as scheduled. |
| | Rate: 12% | | Term: 18 Months + 1 - Six Month Ext. | | Amort: IO | | LTC: 65% | | Prepayment: None | | Recourse | | Lender Fee: 3.5% | | Advisor: Nathan Auslander |
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| | | | Multi with pre-pay issues? GSP is working with a national capital provider offering up to 6 month early rate-locks for multifamily assets. The entire coupon (not just the index or spread) is fixed at or shortly after application with a two-point deposit. Deposit funds are returned at close. The lender will allow up to a 5% forgiveness of proceeds at funding without breakage costs should the final underwriting not support the entire locked amount. Up to 25 basis points will be added to the spread for the forward, providing an inexpensive hedge against market movement as witnessed over the last two months. The program allows for stabilized properties to lock today’s rates while pre-payment penalties on the current capital stack burn off. Underwritten transactions from $5,000,000 and up will qualify. |
| | | Hot Money | Commercial Real Estate Ground-Up Construction Debt GSP is funding transactions with a West Coast portfolio lender originating ground-up construction debt for multifamily, office, industrial and retail assets to 75% of cost. Non-recourse execution is available for a 15 basis-point reduction in LTC. The LIBOR based loan will carry the option of rolling into a mini-perm at CofO or being paid off without an exit fee or penalty. Transactions from $10,000,000 will be considered in the western states and Texas. Product types w/full recourse will include homebuilding and entitle land for future homebuilders. | | | 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 Perspective | Bond market was oversold….Focus on housing Last week the 10 year T hit a high of 2.93% and we were “on our way” to 3.50% at year-end according to a consensus of institutional economists. Today the 10 year is at 2.76% after hitting a low of 2.69% yesterday. A surprisingly low new home sales report last Friday was a direct “message” to the Fed: higher rates hurt housing, and especially new housing which is a major factor in all US economic recoveries (as new housing construction is a huge employment driver). This caused bond buyers to believe that tapering may not be so imminent. What is the media’s role in all this? There is some speculation that the big sellers of bonds are not the big institutions, sovereigns, etc, the outflow are “retail” owners who have invested in bond funds and are susceptible to the financial media. ….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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