GSPartners
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Volume XXIII | No. 14 | April 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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0.18%
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5 Yr US Treasury
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1.32%
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5 Yr Swaps
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1.47%
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12-MAT
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0.15%
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3 Month LIBOR
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0.28%
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10 Yr US Treasury
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1.89%
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10 Yr Swaps
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1.97%
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11th Dist COFI
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0.70%
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6 Month LIBOR
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0.40%
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30 Yr US Treasury
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2.54%
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| | | Transaction Description: | | $7,700,000 Cash-Out Refinance for 35 Unit West Hollywood Luxury Apartment George Smith Partners successfully refinanced the 35 unit multifamily rental property located in West Hollywood, California. The 26,051 square foot property was purchased by the Sponsor one year ago from a distressed seller: limited operating history was available to our Client at the time of acquisition. This execution netted just under 100% of the initial purchase price despite the lack of seasoning – full occupancy was realized just prior to close. Located in a premier section of West Hollywood, the high quality upgrades mitigated most of the lenders’ concerns and justified the return of capital. Sized to 70% of current value, fixed for 7 years, the self-liquidating loan will float at LIBOR + 2.05% for the remaining 23 years of the term. Prepayment features a step-down for the first five years with no penalty thereafter. |
| | Rate: 3.41% | | Term: 30 Years | | Amort: 30 Years | | LTV: 70% | | DCR: 1.20 | | Recourse | | Lender Fee: Par | | Advisor: Shahin Yazdi |
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| | | Transaction Description: | | $6,150,000 Refinance of a Santa Clarita Valley Neighborhood Retail Center GSP successfully placed $6,150,000 in permanent debt on a 92% occupied, 1970’s constructed unanchored multi-tenant retail property in Santa Clarita Valley. A national electronics retail chain, currently in bankruptcy, occupies approximately 10% of the property’s gross leasable area. This strong retail location and demographics supported the lack of credit tenants and a tenant in bankruptcy. The loan enabled the Sponsor to refinance existing debt at a lower cost of capital and lock in a 4.16% coupon for 10 years with two years interest only, and 30-year amortization thereafter. |
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| | | Transaction Description: | | $2,316,000 Free-Standing Dental Facility George Smith Partners placed the acquisition & reposition for the bank-to-dental office conversion for a future dental office user. Construction is scheduled to run 12 months including all TI work for the 3,448 square foot facility. This loan also funded all improvements as well as most of the dental equipment required to commence operations. Fixed at 4.3%, the recourse loan will self-liquidate over a 25 year term. |
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| | | | High-Leveraged Long-Term NNN Debt GSP identified a national capital provider funding long-term fixed rate debt on triple net leased assets across the country. Despite Walgreens shuttering 200 US stores by 2017, high-leveraged non-recourse financing is still being provided on the net-leased pharmacy chain. Terms are 15 to 25 years fully amortizing and sized to a 1.01x debt coverage ratio based on the remaining lease term. Pricing for Walgreens ranges from 4% to 4.25% fixed. Rates and terms for other net-leased assets vary based on credit, location and tenant credit. |
| | | In The Press | This week, Gary E. Mozer, Managing Principal of George Smith Partners, was quoted in Commercial Property Execuitve on the recent acquisition of GE Capital. Blackstone and Wells Fargo negotiated to acquire $23 billion in assets from the former commercial lending group. Read the full article online here. Gary Tenzer, Co-Founding Principal for George Smith Partners, Inc. moderated an “Inside the Capital Stack” panel at RealShare LA. Afterwards, he sat down to discuss the real estate trends: types of capital clouding the market, how lenders are staying competitive and what property types capital is seeking. See the full interview here. | | | Pascale’s Perspective | Treasury Markets Appear “Directionless” Weaker than expected economic data this week (retail sales) combined with a Producers Price Index showing a rebound in prices as oil actually increased last month indicate no “clear path” to a decision on rate raises. The Fed futures market now shows investors anticipating no hike until December 2015, the first implied probability over 50%. Meanwhile, today’s ECB press conference featured bankers reassuring markets that they are not planning on slowing down their massive quantitative easing program. It seems they are trying to avoid rattling markets with any “taper talk” of their own. Lots of eyes are on the German 10 year yield as it nears 0.10%. If that benchmark bond goes negative, it may drag US Treasuries lower as “any yield” will seem like “a bargain”. ….stay tuned…. David R. Pascale, Jr |
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©2015 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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