GSPartners
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Volume XXI | No. 7 | February 19, 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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0.15%
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5 Yr US Treasury
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1.51%
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5 Yr Swaps
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1.63%
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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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2.74%
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10 Yr Swaps
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2.85%
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11th Dist COFI
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0.78%
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6 Month LIBOR
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0.33%
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30 Yr US Treasury
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3.71%
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| | | Transaction Description: | | $25,400,000 Inland Empire Class-A Office Acquisition George Smith Partners successfully arranged $25,400,000 Owner/User Financing for the acquisition of a 392,728 class A office building in the Inland Empire. The sponsor is a nonprofit health care company relocating headquarters and will occupy over 80% of the building. The financing features both an attractive long term fixed rate and flexible pre-payment terms (no defeasance or yield maintenance). The acquisition allowed the sponsor to consolidate multiple locations into a single campus like setting. This purchase was an REO from a special servicer and required bondholder and court approval to close. GSP was able to assist in expediting that portion of the process. Recourse is limited to a capitalized entity - there is no warm body repayment guarantee. |
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| | | Transaction Description: | | $14,400,000 Acquisition Debt Financing of 114 Senior Housing Multifamily Units GSP arranged the $14,400,000 First Trust Deed for the purchase of an age-restricted Huntington Beach multifamily asset built in 1987. The loan represented 66% of purchase price plus 100% of anticipated reposition costs. The repayment guarantee limited to the top 25%, burns down to a non-recourse loan upon completion of budgeted renovations and achievement of a 1.20x debt service coverage ratio. 100% of the reposition costs will be financed, funded by the capital provider through future draw requests. The coastal Orange County asset was purchased for $19,000,000 ($166,667 per unit) and has a unit mix of 3% studios, 87% one-bedroom units, and 10% two-bedroom units. The LIBOR based floating rate loan does not amortize or carry a prepayment penalty. |
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| | | Transaction Description: | | $2,000,000 Cash-Out Refinance for a Vernon Manufacturing Facility GSP successfully arranged the cash-out refinance of an 80,000 square foot warehouse in Vernon, California. The Los Angeles based owner/user owns several separate buildings where they manufacture, assemble, and ship their product globally. The recent economic downturn netted losses posted to the company financials during the last several years and their bank was unwilling to extend additional credit. No warm-body was available to provide for a repayment guarantee. GSP identified a fund that was comfortable providing a return of equity based on the value of their real estate. Proceeds from the non-recourse loan will be used by the Company for expanding their operations lines as corporate sales have picked up throughout the United States. |
| | Rate: 8.99% | | Term: 12 Months+Two 6 Month Options | | Amort: IO | | LTV: 35% | | Prepayment: None | | Non-recourse | | Lender Fee: 1.5% | | Advisors: Jonathan Lee, Shine Cheng |
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| | | | Treasury v. SWAP Execution; Life Company Wins on Rate George Smith Partners is closing acquisition and refinance of core assets nationwide with a direct Life Insurance provider who has recently compressed their spreads. The treasury execution also reduces the all-in coupon by 10 to 13 basis points over the comparable SWAP priced transactions. Loans from $5,000,000 to $75,000,000 range from 3.35% (5 year) to 4.05% (10 year) on 9.0% debt yields. Lower leveraged (higher debt yield) requests will receive tighter premium pricing by an additional 10 to 15 bpts. Flexible pre-payment options may also be structured prior to close. |
| | | 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 | | | In The Press | Managing Director David Rifkind was recently quoted in The Las Vegas Review-Journal on how the capital markets are viewing the recent multifamily construction developments around Las Vegas. Mr. Rifkind was also interviewed by GlobeSt on the unrelated topic of acting now in this current market & environment, or remaining on the sidelines. Both articles are available on-line and are hot-linked above. | | | Pascale’s Perspective | Tapering “Weathers the Storm” Today’s release of notes from the latest Fed meeting indicated a firm resolve to continue tapering, now buying $65 billion in securities each month. The Fed and most investors continue to shrug off dismal economic reports (housing, retail, etc), chalking them up to the harsh winter gripping much of the country. The Fed has made it clear that they need to see substantial problems in order to deviate from their schedule, which now has them ceasing bond buying in Sept/Oct of this year. It will be interesting to see what happens if negative reports linger when temperatures rise. What got more attention today was some Governors talk of raising the Fed Funds rate as soon as mid-2015, while market consensus has been early to mid 2016. The government also has let the “HAMP” (Home Affordable Modification Program) expire, more signs that the “training wheels are coming off” as we are 5 years post crisis. …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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