GSPartners
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Volume XXI | No. 39 | October 15, 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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1.33%
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5 Yr Swaps
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1.53%
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12-MAT
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0.12%
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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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2.12%
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10 Yr Swaps
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2.28%
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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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2.91%
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| | | Transaction Description: | | $51,000,000 Refinance Single-Tenant Office to 85% of Value & 7.8% Debt Yield George Smith Partners successfully placed the refinance of a 204,123 square foot Class A single-tenant office building. The tenant is a Fortune 500 company utilizing this space as a regional headquarters. Fixed for 5 years at 5.76%, the $51,000,000 loan is non-recourse; sized to 85% LTV & a 7.8% debt yield. There is no amortization as the loan is interest only for the entire 5 year term. The transaction included a complicated restructure of a former Tenants-In-Common Ownership roll-up into a single purpose entity. This refinance allowed the owners to exit a maturity default and remove themselves from the special servicer. |
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| | | Transaction Description: | | $3,120,000 Office Acquisition: 90% of Purchase Raffi Sarkissian secured the acquisition debt of an owner/user office building that will allow his client to relocate and expand his current operations. The Borrower was working through a technical default issue that precluded him from securing traditional SBA financing and historical cash flow did not support a loan of this size. Mr. Sarkissian identified a bank that underwrote proforma cash flow given the demonstrated increase of purchase orders, and understood the need for the expanded facility to supplement the increase of sales. Fixed at 4.75% for 10 years, the loan provides for a step-down prepayment, open after the 5th year, and was sized to 90% of the contract sale price. |
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| | | Transaction Description: | | $2,050,000 Construction Loan Take-Out: Residence to Office Conversion GSP successfully placed the 70% LTV refinance of a 5,000 square foot custom built Calabasas office building. There is an additional 4,000 s.f. of basement and garage space. Formally a single family residence, our owner/user client converted the facility to accommodate his multifamily property management company. Fixed for 5 years at 3.91%, the full recourse loan amortizes over 25 years and provides for a step-down prepayment. |
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| | | | California JV Equity from $2,000,000 Institutional equity firm investing in multi-family development and/or reposition in select California markets from $2,000,000 to $8,000,000 for capitalizations of $30,000,0000 and more. Up to 100% of the equity can be funded subject to a developer fee and an attractive promote. JV equity for free-standing NNN development opportunities nationwide are considered with 100% debt financing for project construction. Programmatic relationships are sought with developers with a pipeline of projects for a specific NNN tenant in multiple locations. |
| | | 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 | | | Speakers Corner | Founding Partner Steve Bram will be lecturing to a USC Commercial Real Estate Class on the Sources of Debt and Equity Capital on Monday October 20. Fight On! | | | Pascale's Perspective | The 10 year opened at 2.21% then immediately plunged to 1.87% before closing at 2.12%. Note that the 10 year T was 2.63% on September 18 compared to the all-time low of 1.38% in July 2012. Why? Perfect storm of poor US data (retail sales down 0.3%, NY manufacturing index down), deflation fears (Europe’s inflation swap rate fell dramatically and US PPI fell 0.1%) and disturbing headlines about Ebola. The “fear trade” aka “risk off” caused a huge flight to quality and a drop in US equity markets. With the end of tapering now at hand (expect the formal announcement on Oct 29) and markets anticipating the next rise in short term rates by the Fed, there has been a major shift in expectations regarding the timing of that move. In July, 55% of investors polled by WSJ predicted that increase to occur by June 2015. That same poll now shows that number to be 12%. .....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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