GSPartners
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Volume XXIII | No. 1 | January 7, 2015
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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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0.17%
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5 Yr US Treasury
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1.48%
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5 Yr Swaps
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1.62%
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12-MAT
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0.12%
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3 Month LIBOR
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0.25%
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10 Yr US Treasury
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1.97%
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10 Yr Swaps
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2.08%
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11th Dist COFI
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0.69%
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6 Month LIBOR
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0.36%
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30 Yr US Treasury
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2.53%
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| | | Transaction Description: | | $36,115,000 Bridge to Perm with Forward Rate Lock for a Four Building Apartment Complex plus Boat Docks GSP successfully placed a uniquely structured Bridge to Perm fixed rate non-recourse loan that provides 100% of renovation costs, reserves, financing costs and all soft costs for this 1972 built complex. Renovation and soft costs are funded as needed in three draws over 18 months with no negative arbitrage. A minimal interest reserve was required because of the existing cash flow serviced the increasing debt load. Once renovation and re-stabilization are completed in 24 months, the loan converts to an 8 year term amortized over 25 years. Interest rate is locked and fixed at 5.0% for the entire 10 year term. Financing is structured to allow one of the four buildings off-line in tandem to renovate, then lease at new market rents while commencing construction on the next building. The complex features a prime Marina Del Rey waterfront location including 10 docks with 209 boat slips. This is a full “life-style” complex: amenities include a swimming pool, spa/sauna, full size basketball courts, tennis courts and a large club house with billiards. Units are larger than comparable newly built comparable units nearby. The extensive rehab includes a gut renovation of the interiors and installation of a new exterior skin with all public areas revamped. Hardscape access to boat docks and bathroom/laundry facilities for the boat docks will be replaced/upgraded. This structure minimized rate risk for the Sponsor by locking in a rate today even though the construction will not be completed for 24 months. |
| | Rate: 5.0% | | Term: 10 Years | | Amort: 2 Years Interest Only; 25 Years Thereafter | | DCR: 1.30 | | Non-recourse | | Lender Fee: 1.0% | Advisors: Steve Bram, David R. Pascale, Jr
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| | | Transaction Description: | | $10,950,000 Cash-Out Refinance of a Los Angeles County Community Retail Center GSP successfully placed the $10,950,000 cash-out refinance on a Los Angeles County multi-tenant retail property anchored by a national off-price department store and variety retailer. 10% of property income is derived from leases whose tenants were not in occupancy at loan closing. Lender structured a capitalized holdback for loan proceeds attributable to the unoccupied space, to be released upon commencement of rent. The 75% leverage non-recourse loan has a 4.36% fixed coupon for the 10-year term. Interest only for the first four years, the loan amortizes over a 30-year schedule thereafter. |
| | Rate: 4.36% Fixed | | Term: 10 Years | | Amort: 4 Years Interest Only; 30 Year Amortization thereafter | | LTV: 75% | | Prepayment: Defeasance | | Non-recourse | | Lender Fee: Par | Advisors: Gary E. Mozer, Katie H. Rodd, Michael Anderson, Kyle Howerton
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| | | Transaction Description: | | Revolving Line of Credit Bryan Shaffer successfully secured the $1,900,000 revolving line of credit for a local commercial real estate developer. The unrestricted line will be used at the clients’ full discretion but will be predominantly used as equity contributions for the purchase of multifamily purchases. This capacity will allow the Sponsor to compete with faster escrows in a very competitive purchase market. |
| | Rate: 5.0% Fixed | | Term: 3 Years | | Amort: Interest Only | | Recourse | Advisors: Bryan Shaffer, Jon Shapiro |
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| | | | Ground-Up Construction; Fast Bank Execution GSP is working with a fast moving construction to perm lender from $1,000,000 to $30,000,000. On-book loans may roll to a 7 year fixed perm upon lease-up. Pricing from L+3.25% to 75% loan-to-value is available for core locations in Pacific and Atlantic States plus Texas. Recourse may burn-off during stabilization with non-recourse an option at lower LTVs. Non-US Residents are acceptable. |
| | | 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 | What would George Smith say? One of George’s favorite New Year’s activities was comparing economist interest rate predictions from the first of last year to actual year end rates. He would have enjoyed this year very much. January 2014, most predictions for the 10 year Treasury at year end were in the 3.50-3.75% range. 2014 turned out a little differently, the 10 year peaked at 3.05% on January 2, 2014 and then proceeded to slide to different key technical levels, hitting a low of 1.85% in October, before ending the year at 2.12% and then plunging to as low as 1.87% this week, closing today at 1.97%.... Various reasons for this including global slowdown fears (with the US in a “fitful” recovery), massive quantitative easing, commodity deflation, etc…. Even the Fed’s indication of a timetable including “definite” rate increases in 2015 didn’t scare bond investors as the accompanying statement indicated “patience” and a gradual increase to “normalization” (whatever that is in the age of the “new normal”)…... Yellon predicted interest rising over a three year interval, a slower pace than previously anticipated. This year started with an unexpectedly weak US manufacturing report on Jan 2, followed by anxiety over oil price shock (fears of deflation) which also is affecting credit markets due to massive energy components in both financial derivatives and unrated corporate “junk” bonds. Energy company woes can negatively affect these items which could also hurt credit spreads. That and the return of Greece uncertainty are spurring a flight to quality. ….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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