GSPartners
|
|
|
|
Volume XXI | No. 6 | February 12, 2014
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.15%
|
5 Yr US Treasury
|
1.56%
|
5 Yr Swaps
|
1.67%
|
|
12-MAT
|
0.13%
|
3 Month LIBOR
|
0.24%
|
10 Yr US Treasury
|
2.76%
|
10 Yr Swaps
|
2.89%
|
|
11th Dist COFI
|
0.78%
|
6 Month LIBOR
|
0.33%
|
30 Yr US Treasury
|
3.72%
|
|
|
|
| | | Transaction Description: | | $14,300,000 Non-Recourse Refinancing for East Coast & West Coast Multi-Family Assets Shahin Yazdi successfully refinanced the debt on a 1) 2003 Garden-Style, 144-unit multifamily property in Charlotte, North Carolina and 2) a 232-unit West Coast rental community in a secondary market. The two non-recourse senior loans stand-alone and are not cross-collateralized. The notes at $7,500,000 and $6,800,000 respectively, represent 75.4% loan-to-value. The ten-year term loan is fixed SWAPs plus 2.21%. |
Challenge: In spite of the high LTV, the Borrower was intent on not having a cash management account and required that legal fees be capped prior to review of loan documents. The appraisal came in below the expected value and underwritten net cash flow did not support the debt coverage threshold. |
Solution: The Bank agreed to a soft-lock box with a “trigger event” (ie; default or BK) for the cash management system to be engaged. GSP negotiated a legal fee cap based on recent loan documents negotiated by the Borrower for a separate capital provider. Credit committee agreed to increase the LTV constraint to 75.4% and underwrote pro-forma revenue based on the current in-place rent roll versus the trailing 12 month collections to meet the debt coverage requirement. |
| | Rate: 10-Year SWAP+2.21% | | Term: 10 Years | | Amort: 30 Years | | LTV: 75.4% | | Non-recourse | | Advisor: Shahin Yazdi |
|
|
| | | Transaction Description: | | $14,850,000 Non-Recourse 20-Year Fixed Rate Apartment Loans GSP successfully arranged four individual loans on four apartment properties in California and adjacent states with a 20-year fixed rate term and 30 year amortization. The Sponsor sought to take advantage of today’s low interest rates with assets he intends to hold for the long-term. GSP identified a life insurance company with very competitive long-term rates. While initially engaged to secure 10-year fixed-rate debt, GSP presented this 20-year option that better fit his business plan and aversion to future rate fluctuations and balloon risk. The assets are Class-B apartment rentals in secondary locations. The non-recourse rate is fixed at 5.25% for 20 years but amortized over 30 years. |
| |
|
| | | | Non-Recourse Bridge Rates Compressed George Smith Partners is working with a national bank funding reposition requests from $5,000,000 to $30,000,000 on a non-recourse basis. Transactions to 75% of total cost start in the low 4.0% range for a 1% origination fee. There is no exit fee or prepayment penalty. Breakeven cash flow at close is preferred although an interest reserve will be underwritten for a suitable business plan on sub-1.0 debt coverage. |
| | | 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 | Treasury Yields Rise as the Yellin Era Begins The new Fed Chairperson has testified before Congress and made other statements on policy…. What does the market think? (1) The Fed will not overreact to negative economic issues such as currency volatility, abnormally low employment reports, etc. It seems she is “staying the course” on tapering. The 10 year Treasury hit 2.80% today, up from 2.58% a couple weeks ago; (2) The Fed Funds Rate will remain at near zero and will be the chief tool to aid struggling labor markets even if the unemployment rate hits 6.5%, as long as inflation remains in the 1.0% range…. All-in loan rates for full leverage 10 year loans is now approaching 5.0%. ...stay tuned… David R. Pascale, Jr. |
|
|
|
|
©2014 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
