GSPartners
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Volume XXI | No. 8 | February 26, 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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1.47%
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5 Yr Swaps
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1.58%
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12-MAT
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0.13%
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3 Month LIBOR
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0.23%
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10 Yr US Treasury
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2.67%
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10 Yr Swaps
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2.76%
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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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3.63%
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| | | Transaction Description: | | $51,075,000 Structured Financing; $38,750,000 Senior Trust Deed and $12,325,000 Mezzanine Loan for Ground-Up Construction of a Class-A Multifamily Asset GSP successfully arranged the combined $51,075,000 of construction financing for a 360 unit Class-A Multifamily project located in Las Vegas, Nevada. The subject is adjacent to Green Valley Ranch and “The District” in Henderson, a mixed-use project that includes a life-style shopping center and resort hotel. This project represents one of the highest quality, most amenitized and dynamic rental projects in Las Vegas. |
Challenge: The Sponsor requested a large construction loan in a market that is not on the preferred list for most capital providers. The projected loan per unit was higher than most completed comps in the market. The Sponsorship was seeking high leverage construction financing which required a combination of a senior and mezzanine loans. |
Solution: GSP demonstrated the considerable experience of the Sponsorship and the singular quality of the location within Green Valley Ranch as compared to other Vegas submarkets, and distinguished this project to justify the high cost per unit. The capital providers understood the value of this location and the Sponsor’s ability to deliver a product that is superior to competing properties in the market. GSP identified a senior lender which had recently negotiated an inter-creditor agreement with a construction mezzanine provider, resulting in a smooth and fast closing process. |
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| | | Transaction Description: | | $4,700,000 Non-Recourse Permanent Financing for a Single Tenant Walgreen’s GSP successfully placed the no-cash-out refinance of an investment grade single tenant retail property built in 2002. The 13,376 square foot asset had 8 years remaining on the lease at the time of funding. The 15 year fixed rate loan has a step-down prepayment. The lender did not require an appraisal or Phase I report for funding. Closing costs including third party reports and legal fees were capped at $5,000. The rate was locked at application for 120 days without cost or additional rate lock deposit. |
Challenge: Most lenders are not comfortable with 8 years remaining for a single-tenant building. The Sponsor required a lender who would not structure a yield maintenance or defeasance for this non-recourse loan. Store sales were not available for this location. Certainty of execution was vital as the existing loan was maturing in less than 45 days. |
Solution: Due to the low leverage and the excellent location of the property, GSP was able to structure a non-recourse loan with a step down prepayment penalty from a portfolio lender. All lender concerns on lease event risk and lack of store sales were mitigated through the loan structure, credit quality of the tenant and financial strength and operating experience of the Sponsor even though there is no repayment guarantee. |
| | Rate: 4.60% Fixed for 15 Years | | Term: 15 Years | | Amort: 15 Years | | LTV: 55% | | Prepayment: 5,5,4,4,3,3,2 par | | Non-recourse | | Lender Fee: 0.15% | | Advisors: Gilda Rivera, Salar Royaei |
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| | | Transaction Description: | | $2,400,000 Cash-Out Refinance of a West Los Angeles Strip Retail Center GSP arranged the $2,400,000 cash-out refinance of a 8,700 square foot unanchored retail strip center to 65% of current value with a portfolio lender. The non-recourse debt is fixed for 10 years at 5.06%. Legal fees were capped at $15,000 and there were no TI or LC reserves required for this non-Wall Street execution as the borrower has a 35 year track record of near 100% occupancy. |
| | Rate: 5.06 | | Term: 10 Years | | Amort: 25 Years | | Non-recourse | | Lender Fee: 1.0% | | Advisor: Loren Bedolla |
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| | | | SoCal Special Use Portfolio Lender to $8,000,000 & 65% LTV GSP is working with a Southern California bank funding special use commercial assets to $8,000,000. Rates may be fixed for 3, 5, 7 & 10 years with the option to self-liquidate over 25 years, removing all balloon event risk. Office condos, franchised restaurants and gas-free automotive use will be underwritten for owner/user and investor alike. Rates range from 4% to 5.5% depending on term and risk profile. Impounds and reserves are not required up to 65% LTV. |
| | | 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 | $13 Billion of new issuance; Rates drop? Today’s treasury rally is a reminder of the impact on how ordinary events in the macro world effect financial markets. The 10 year treasury closed at 2.67% despite a $13 Billion of new issuance hitting the market. Why? Russian army maneuvers near the Ukraine border raise concerns worldwide, spurring on a “flight to quality”. Meanwhile, economic news leading next week’s monthly employment reports are still being “discounted” due to concerns of severe weather distorting the statistics. …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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