GSPartners
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Volume XXI | No. 18 | May 7, 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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1.65%
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5 Yr Swaps
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1.73%
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12-MAT
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0.12%
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3 Month LIBOR
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0.22%
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10 Yr US Treasury
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2.58%
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10 Yr Swaps
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2.69%
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11th Dist COFI
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0.70%
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6 Month LIBOR
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0.32%
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30 Yr US Treasury
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3.39%
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| | | Transaction Description: | | $15,300,000 Non-Recourse Bridge Refinance for Two Limited Service Atlanta Hotels David Stepanchak and Loren Bedolla successfully structured and placed the 75% LTV non-recourse bridge refinance of two limited service hotels. The loan is secured by two flagged Atlanta hotels with 254 total keys. During the economic downturn, hospitality struggled nationally and has only started their recovery over the last two years. GSP targeted a capital provider who was not only knowledgeable about the location and marketplace, but also comfortable with the month-over-month improving performance of both assets and the Sponsor’s operating experience. Both hotels outperformed cash flow expectations during the underwriting process and allowed for an increase in the actual funded loan. GSP vetted the business risk exposure upfront with the capital provider and worked to structure objective criteria that satisfied both the Sponsor and Lender. The non-recourse floating rate loan is floored at 6.0%, sized to a 75% LTV, 9.0% debt yield and 1.15 dcr amortized over 30 years. |
| | Rate: L+5.75%/6.00% Floor | | Term: 3 Years w/two 1-Year Exts | | Amort: 30 Years | | LTV: 75% | | DCR: 1.15 | | Prepayment: None | | Non-recourse | | Advisors: David Stepanchak, Loren Bedolla |
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| | | Transaction Description: | | $1,345,500 In-Line Retail Asset in Tertiary Market GSP successfully placed the refinance of a newly repositioned retail center that had recently been purchased as a DPO in the San Joaquin Valley. Historical operating history was limited to two months of operations since the asset was acquired. The new Sponsor demonstrated their market expertize by bringing physical occupancy to 100% with the leasing of two units in the short timeframe from purchase to refinance. The new loan is fixed at 4.35% for 5 years and was constrained by a 65% “as is” LTV with minimal focus on the initial capitalization. |
| | Rate: 4.35% | | Term: 5 Years | | Amort: 20 Years | | LTV: 65% | | DCR: 1.25 | | Prepayment: 5,3,1,1,1 | | Recourse | | Advisor: Jason Gaffner |
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| | | Transaction Description: | | $1,210,000 Refinance of South Bay Law Office George Smith Partners successfully arranged the refinance of a 5,165 square foot office in Torrance, California. The property was fully occupied at funding with ownership accounting for 54% of the net leased space. There was no reserve requirement for tenant improvements or leasing commissions. The 5 year term is fixed at 3.69% and amortized over a 25-year amortization schedule. |
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| | | | International Bank Large Loan Bridge Debt GSP is working with an International capital provider funding non-recourse floating rate reposition transactions from $35,000,000 to $300,000,000, all on-book for up to 7 year terms. Spreads range from 275 to 400 over LIBOR without a floor. Story requests in secondary and tertiary markets will be underwritten to break-even coverage down to 6% debt yields and 75% LTV. All product types including busted condos will be considered although hospitality must be in gateway cities. |
| | | 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 | Combination of “Goldilocks” and “Perfect Storm” Treasury yields continue to remain in the lower part of a tight range with the 10 year hovering around 2.60%. Some geo-political tension in the Ukraine continues (with signs of abatement today), Euro issues (which dominated credit markets in 2011-2012) are also receding as Portugal emerges from bailout, Fed Chair Yellen’s testimony today tempered fears of short term rate increase (a “high degree” of accommodation remains warranted, tapering continues). The recent rally in CMBS bonds (AAA’s down to Swap + 82 range) puts tight spreads on top of the low indices, ie: new loan rates for 10 year in the 4.50%-4.75% range on full leverage with lenders competing on structure and rates. …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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