GSPartners
|
|
|
|
Volume XXI | No. 41 | October 29, 2014
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
|
1 Month LIBOR
|
|
5 Yr US Treasury
|
|
5 Yr Swaps
|
|
|
12-MAT
|
|
3 Month LIBOR
|
|
10 Yr US Treasury
|
|
10 Yr Swaps
|
|
|
11th Dist COFI
|
|
6 Month LIBOR
|
|
30 Yr US Treasury
|
|
|
|
|
| | | Transaction Description: | | $16,500,000 Non-Recourse Bridge Refinancing of Columbus, Ohio Shopping Center GSP secured a $16,500,000 bridge loan for the refinance of a 200,000 square foot retail center in Columbus, Ohio. The asset is 82% occupied with 15% of the vacancy coming from a single large space. The loan was sized to 80% of the current value and 75% of the stabilized value and included an earn-out to pay for tenant improvements and leasing commissions once the large space was leased. |
Challenge: While the property has good current cash flow and many long-term tenants, the large vacant suite had been vacant for many years, making it difficult for some lenders to get comfortable with underwriting that future income. The lender also needed to close within 30 days to meet the existing loans payoff date. During due diligence the Phase 1 came back requiring a Phase 2 because of the presence of a dry cleaner onsite. |
Solution: GSP identified a lender that was comfortable with the required additional leasing as the Sponsor had a long, proven track record of successful retail ownership and management. The lender was also very nimble and able to close in the required timeframe. Because of GSP’s strong relationship with environmental companies, GSP was able to engage a Phase 2 to be completed within 1 week, allowing the loan to close on time. |
| |
|
| | | Transaction Description: | | $8,000,000 Refinance of a Class B Multitenant Office Building Floating @ 2.30% GSP successfully placed an $8,000,000 on-book refinance for a stabilized Class B multitenant office building in Los Angeles County. The 70% leverage loan floats over LIBOR and is 25% recourse to the guarantors. Lender does not require interest rate protection in the form of a cap or swap. The three year term is Interest Only for the first 12 months and requires principal and interest payments at a 30 year amortization schedule thereafter. There are two 12-month extension options after the initial three year term. This refinance allowed the takeout of a higher cost of capital debt and will save the Borrower over $30,000 per month in debt service payments during the Interest Only period and approximately $15,000 per month once the loan starts to amortize. There is no pre-payment penalty after the 1st year of the loan. |
| |
|
| | | Transaction Description: | | $1,880,000 Acquisition Financing for Unentitled Land to 80% of Acquisition George Smith Partners successfully placed the financing to acquire unentitled land for a to-be-built multifamily development near Culver City, California. The Subject is zoned C-2, and is currently improved with an auto-repair facility that has been in operation since 1947. The surrounding parcels are a mixture of multifamily and commercial. Floating over LIBOR with a 4.5% spread subject to a 6.5% floor, the loan was sized to 80% of the purchase price for the 12 month term. Interest is paid monthly on an interest only basis from a lender funded interest reserve. |
| | Rate: LIBOR + 450bps w/6.50% floor | | Term: 12 Months, w/6 Month Extension | | Amort: Interest Only | | LTC: 80.0% | | Lender Fee: 1.50% | Advisors: Jonathan Lee, Adam Candler
|
|
|
| | | | Non-Recourse Ground-Up & Reposition w/Mini-Perm GSP is working with a fully discretionary pension fund originating large non-recourse construction loans and reposition/adaptive-reuse transactions from $15,000,000 to $150,000,000. All asset classes are considered and construction mezz-debt may be layered on to 90% of total capitalization. A five year market-rate mini-perm is available upon asset stabilization. |
| | | 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 | QE2 Ends Today? What’s next? Today the Federal Reserve’s unprecedented $4 trillion bond buying program has officially come to an end. QE1 (first round of bond buying launched in 2008) was part of the emergency rescue measures after the September 2008 crash. QE2, launched in 2010, was meant to further stabilize markets and act as a fiscal stimulus. The buying of mortgage bonds was meant to target credit spreads, while the treasury buying was meant to control the index. The Fed was attempting to keep financing costs low for corporations, consumers, homeowners, etc. in the hope the “easy money” would spur job creation and also wage inflation, ie key standard of living metrics. The results are mixed with unemployment dropping, but wages basically stagnant and overall job market participation at an all time low. We now enter a period of “Fed stasis” as bond buying has ended, but the Fed is not going to disrupt markets by selling bonds (although the Fed may not reinvest maturing bonds). What jarred markets today, was the accompanying statement that indicated a more bullish assessment of the labor market than recent statements. Investors interpreted this as hawkish, ie portending a sooner than anticipated raise in short term rates (early to mid 2015). An auction of 5 year treasuries went out “weak” and the rate jumped to 1.60 with the 10 year T hitting 2.32%. ....stay tuned…. David R. Pascale, Jr. |
|
|
|
|
©2014 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
