GSPartners
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Volume XXI | No. 33 | September 3, 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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1.67%
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5 Yr Swaps
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1.80%
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12-MAT
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0.12%
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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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2.39%
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10 Yr Swaps
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2.51%
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11th Dist COFI
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0.67%
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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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3.14%
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| | | Transaction Description: | | $35,000,000 Non-Recourse Refinance for a Single-Tenant Office Complex w/Event Risk GSP successfully arranged the $35,000,000 permanent refinance of a northern California single-tenant office complex. The three-building collateral totals 137,232 square feet on 9.49 acre campus, all leased to a single AAA (S&P rated) tenant for an additional 14 years. One of the three buildings may be unilaterally vacated in 2018 at the tenants’ sole discretion. GSP mitigated this potential risk by structuring a cash flow sweep to address this one-time event. Fixed for 10 years, the non-recourse loan was sized to 70% of value and a 1.25 dcr constraint on a 30 year amortization schedule. The loan allowed the borrower to take out 130% of their original cash equity. |
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| | | Transaction Description: | | $3,680,000 Permanent Financing for a Single-Tenant Co-Op Grocery Store JJay Brooks secured a permanent loan for a non-credit single tenant grocer in a tertiary Northern California market. This financing provided a consolidation of the existing 1st Trust Deed and a higher yielding 2nd. As a build-to-suit, the lease rate was established as a return on cost. That and its’ tertiary location complicated the appraisal comparative process. Mr. Brooks identified a capital provider who was comfortable with the sales history and structured a tighter amortization period to minimize event risk. The 7 year term loan was sized to 65% LTV and is fixed at 4.90%, amortized over 15 years. This portfolio lender offered a step-down prepayment with the final two years open without penalty. |
| | Rate: 4.90% | | Term: 7 Years | | Amort: 15 Years | | LTV: 65% | | Prepayment: 5,4,3,2,1,0,0, | | Recourse | | Advisor: JJay Brooks |
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| | | Transaction Description: | | $1,510,000 Supplemental Funding for a Colorado Springs Apartment GSP arranged supplemental financing on a 114 unit stabilized apartment building in Colorado Springs. The Sponsor acquired the undermanaged property mid- 2012 when GSP secured the 10 year fixed rate acquisition loan for the subject to 64% of capitalization. The Sponsor significantly improved NOI over the subsequent two years and justified a return of equity. This funding reduced the Sponsors’ initial cash capitalization to less than 10%. The non-recourse supplemental funding was sized to 65% of current value, fixed at 5.06% and is co-terminus with the existing 1st Trust Deed. |
| | Rate: 5.06% | | Term: Co-terminus w/1st Trust Deed | | LTV: 65% Combined | | Prepayment: Yield Maintenance | | Non-recourse | | Lender Fee: Par | | Advisors: Jonathan Lee, Adam Candler |
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| | | | California Ground-Up Construction Multiple California and West coast Banks are aggressively chasing existing multifamily – creating a void for construction capital under $5,000,000. GSP identified a regional bank funding commercial and multifamily projects to 75% of cost. Transactions from $1,000,000 to $5,000,000 are priced from 5.25% for 12 months on industrial, self-storage, office condos and other commercial use products. Mini-perms may be secured at stabilization although there is no prepayment or exit fee should the construction loan not be rolled. |
| | | Pascale's Perspective | Treasuries/Credit Spreads Treasury yields rose this week as positive economic news overcame the global “fear” issues that caused yields to plunge to 2.30% in previous weeks, the 10 year closed today at 2.41%....CMBS: No new pools have traded since a mid-August issue went out at Swaps + 90 (a widening from Swaps + 72 in mid-summer)…..There are multiple issues being priced, what we hear: “Appetite is good” “Whisper talk is about Swap + 85”…..Hopefully the widening has abated and some tightening is imminent…..stay tuned... David R. Pascale, Jr. | | | 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 |
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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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