GSPartners
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Volume XXII | No. 1 | January 8, 2014
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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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0.16%
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5 Yr US Treasury
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1.76%
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5 Yr Swaps
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1.84%
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12-MAT
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0.13%
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3 Month LIBOR
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0.24%
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10 Yr US Treasury
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2.99%
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10 Yr Swaps
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3.07%
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11th Dist COFI
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0.78%
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6 Month LIBOR
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0.34%
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30 Yr US Treasury
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3.89%
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| | | Transaction Description: | | $27,100,000 Non-Recourse Acquisition Financing for a 169-Unit Class A Multifamily in a Secondary Market GSP successfully placed the 72% of purchase acquisition debt on an early 2000’s vintage, 169-unit multifamily property in Northeastern New York State. The $27,100,000 non-recourse senior note consisted of an initial funding of $23,800,000 and a $3,300,000 future funding for capital improvements. Located in a secondary market, the subject property lacks easy access to major employment centers or transportation hubs. Interest Only for three years, the interest rate floats at LIBOR plus 3.00% with a 3.20% floor. The Sponsor purchased a 3-year cap at close with a LIBOR strike price of 2.0%. |
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| | | Transaction Description: | | $1,650,000 Non-Recourse Rate and Term Refinance for an Owner/User David Stepanchak placed the no-cash-out pay-off of a construction loan for the build-to-suit office building of a charitable organization. The loan to the 501c3 borrower is 100% non-recourse and does not require a carve-out guarantor. A pocket-to-pocket lease was not underwritten and therefore there was no additional credit support to the loan beyond the value of the collateral. The ten year loan is fixed for 7 years at 4.7% before rolling to a floater over 6-month LIBOR for the remaining 3 years. Prepayment penalty steps-down from 5% to open the final two years of the fixed term. |
| | Rate: 4.7% Fixed for 7 Years | | Term: 10 Years | | Amort: 30 Years | | LTV: 70% | | Prepayment: 5-4-3-2-1 Open | | Non-recourse | | Advisor: David Stepanchak |
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| | | | Story Bridge Debt Another Debt Fund is expanding their platform accepting higher risk transactions in favor of a more favorable return. Non-recourse debt will be considered to 80% of total capitalization on LIBOR based debt with coupons from 6.0% to 7.5%. The three year term is interest only for core plus hospitality products. Some cash flow is required at funding although an interest reserve can be structured for sub-1.0 coverage. All major and secondary markets and select tertiary markets are considered for loan requests over $10,000,000. |
| | | 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 | Happy New Year or should I say “Happy 3% Treasury”? The fallout from the Tapering and recent “down the middle” economic reports netted a 10-year T that has settled in at about 3%..... Meanwhile, Life Company and CMBS lenders have large allocations and/or appetite for new loans now that they have closed their year-end transactions and are looking forward. Spreads range from 150-200 over Treasuries for Life Companies (lower leverage, best assets) to 180-220 over Swaps for CMBS (higher leverage, wider range of assets). That puts the 10-year “benchmark” perm rates at 4.50-5.75%. Sales brokers indicate that sellers are not yet adjusting cap rates upward. Meanwhile, investors need to see if transactions pencil in a rising rate environment, this will be market specific depending on their ability to raise rents. Those with loan maturities may have to adjust return expectations or make decisions on whether to sell. A glut of sellers could raise cap rates in some markets. This is all part of the “normalization” of rates and the general economy as ultra-accommodative central bank policies recede. ….stay tuned… David R. Pascale, Jr. |
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©2014 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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