GSPartners
|
|
|
|
Volume XXI | No. 45 | November 20, 2013
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.17%
|
5 Yr US Treasury
|
1.38%
|
5 Yr Swaps
|
1.46%
|
|
12-MAT
|
0.14%
|
3 Month LIBOR
|
0.24%
|
10 Yr US Treasury
|
2.81%
|
10 Yr Swaps
|
2.84%
|
|
11th Dist COFI
|
0.96%
|
6 Month LIBOR
|
0.35%
|
30 Yr US Treasury
|
3.91%
|
|
|
|
| | | Transaction Description: | | $28,000,000 Non-Recourse Recapitalization of a 290,500 Square Foot Shadow-Anchored Retail Center in a Secondary Southern California Market. GSP successfully arranged $28,000,000 in non-recourse debt to recapitalize a shadow-anchored regional center in a secondary market. The 73% LTV financing consisted of two loans; 1) $24,000,000 5-year loan fixed at 4.32%, amortized over 30 years for the in-line parcels, and 2) $4,000,000 portfolio loan floating over 30-Day Libor + 3.00% with no floor; collateralized by out-parcels and pads. These loans were structured to allow for the prepayment of the floating rate debt and liquidation of out-parcels. |
Challenge: The property suffered from significant decreased cash flow during the economic downturn due to its location in a secondary market and a weak frontage on major thoroughfares. The sponsor required a non-recourse structure while securing maximum proceeds but the flexibility to sell off parcels in accordance with their business plan. |
Solution: GSP identified a securitized lender who will also utilize their balance sheet for an on-book execution. The portfolio transaction does not require a pre-payment penalty, allowing the flexibility to sell parcels. Both loans were originated by the same originator, allowing one underwriter to review both transactions. |
| |
|
| | | Transaction Description: | | $2,200,000 Tarzana Car Wash and Hotdog Stand GSP successfully secured acquisition debt for the purchase of a Tarzana Carwash and adjacent popular hotdog stand. The property is well located on a major thoroughfare of the Valley and is minutes from Highway 101. The 75% of purchase fixed rate loan will self-liquidate over 25 years but is open for prepayment without penalty beginning in Year 4. |
Challenge: There was very little historical information provided by the seller making the loan difficult to underwrite or value the asset from an income approach. The buyer had already removed all contingencies to the purchase and needed to close on a date certain or lose a substantial earnest deposit. |
Solution: GSP carefully selected a lender with a high probability to fund based on their track record with similar difficult transactions. The deal team worked with the Borrower to create a realistic proforma that the lender accepted based on information from other car wash operations and knowledge of this market. |
| |
|
| | | Transaction Description: | | $1,800,000 Cash-Out Refinance for a Los Angeles Studio/Brick Multifamily Apartment Bryan Shaffer successfully placed the cash-out refinance of a 30 unit apartment building in downtown Los Angeles. The product mix is a 100% studio floor plate. Cash out proceeds were sized to 75% of value for the 1914 construction of the brick building. Amortized over 30 years, the rate lock was executed at application, fixed for five years at 4.0%, mitigating the run-up in treasuries. The loan will float at 250 over LIBOR for years six through 15. There is no balloon risk for 15 years although the loan is pre-payable without penalty after the third year. |
Challenge: All-brick structures present a concern as to how the building will perform during an earthquake. All-studio configuration as well as the Class C location in a lower income area of Los Angeles ruled out a large percentage of institutional lenders. At the time of funding, the Fed was considering ending their bond purchasing program, resulting in an unstable secondary market and rapidly rising rates. |
Solution: GSP has funded a number of transactions with a local balance sheet lender who is active in this specific market and understands this location and demand for this configuration. The lender permitted an early rate lock that pre-dated a 50 basis point treasury movement once the loan was ready for funding. Cash out was justified and permitted due to a recent rehabilitation and an increase in operating cash flow. |
| | Rate: 4.0% for 5 Years; LIBOR+2.25% | | Term: 15 Years | | Amort: 30 Years | | LTV: 75% | | Prepayment: 3,2,1 Open | | Recourse | | Lender Fee: Par | | Advisor: Bryan Shaffer |
|
|
| | | | National Balance Sheet Mini-Perm George Smith Partners is working with a national investment bank that has recently launched a five year mini-perm program geared towards performing assets with a potential upside. Core assets (no hospitality) must be economically stabilized and underwritten to standard permanent debt guidelines. Coupons in the mid-4% range are fixed for five years with no prepayment penalty after the 12th month. Amortization will be set for 25 or 30 years. All transactions are held on-book and are non-recourse other than standard carve-outs. |
|
|
|
|
|
©2013 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
