GSPartners
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Volume XXIII | No. 3 | January 21, 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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1.33%
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5 Yr Swaps
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1.40%
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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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1.86%
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10 Yr Swaps
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1.93%
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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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2.44%
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| | | Transaction Description: | | $5,650,000 Non-Recourse Class B Office Bridge Loan George Smith Partners successfully placed the acquisition bridge financing of a 38,428 square foot multi-tenant Class B office building in the Governor Park submarket of San Diego. In-Place occupancy at the time of acquisition was 73%, with market occupancy at 88%. Sized to 65% LTC, the $5,650,000 non-recourse loan provided an initial funding of $4,800,000 for acquisition and closing costs followed by an $850,000 future funding. The 3 year loan term with (2) 1 year extensions allows our client to execute their business plan and lease the asset up to market occupancy. Future fundings are allocated for tenant improvements and leasing commissions. The loan provides a 12 month interest only period followed by a 25 year amortization schedule. Floating at L+3.00%, the low cost of capital allows the Sponsor to earn a higher project level IRR. |
| | Rate: LIBOR + 3.0% | | Term: 3 Years + (2) 1 Year Extensions | | Amort: 12 Months I/O followed by 25 Years | | LTC: 65% | | Non-recourse | | Lender Fee: 1.0% | Advisors: Malcolm Davies, Murtuza Razavi
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| | | Transaction Description: | | $3,000,000 Acquisition Financing w/30 Day Close for Santa Monica Apartment Building George Smith Partners successfully arranged the acquisition debt for the purchase of a 16 unit multifamily property for a non-US Resident borrower. The 14,400 square foot property was constructed in 1969, and includes controlled access gates, secure parking, laundry facilities and an elevator, while ideally located less than half a mile from Santa Monica Beach and Gold Coast. Our client was coming out of an exchange and went into application with one month to close requiring a “funded as applied for” execution. Liquidity and net worth covenants were structured to address the non-US Residency of the Sponsor. Professional 3rd party property management mitigated the Borrowers’ lack of credit history and out-of-country ownership. Fixed at just under 4.0% for 10 years amortized over 30 years, the loan funded in less than 30 days, meeting the Sponsors’ 1031 requirements. |
| | Rate: 3.95% | | Term: 10 Years | | Amort: 30 Years | | LTC: 50% | | DCR: 1.20 | | Recourse | | Lender Fee: Par | Advisor: Shahin Yazdi
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| | | Transaction Description: | | $1,950,000 14 Unit Los Angeles Multifamily Acquisition Bridge Loan Closed in 5 Days Bryan Shaffer successfully placed the $1,950,000 Quick Close loan for the acquisition of a 14 unit apartment complex in Los Angeles, California. Sized to 70% of purchase, the 6 month loan closed within 5 business days to accommodate a year-end tax deferment. As the asset is fully stabilized, the Sponsor will now seek to secure institutional debt to replace the 7.9% bridge loan. |
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| | | | Stabilized Fixed Rate Portfolio Debt w/Modified Prepayment Options GSP identified a national portfolio capital provider offering 10-year fixed rate non-recourse debt with beneficial prepay structures. Financing to 75% of appraised value on transactions from $15,000,000 to $50,000,000 is priced 200 to 225 basis points over corresponding treasuries rate locked at application. Prepayment for the 10-year product is yield maintenance for the first seven years then open for the remaining three years of the term. Prepayment on 5 and 7 year terms are yield maintenance for the first half and open without penalty for the remaining term. |
| | | 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 | All Eyes On Draghi; Other Euro Factors Continue to Effect US Treasuries ….. Tomorrow’s ECB announcement is going to be closely watched, as ECB President Draghi is expected to roll out a quantitative easing program. The central bank will start purchasing 50 billion euros of bonds per month. They are hoping to replicate the perceived success of our Federal Reserve’s program. Europe is more complex as there is debate among the members over which bonds to purchase ie; strong economies such as Germany, or the weaker countries such as Spain and Italy. The stronger countries are safer from default risk but the “need” is in the weaker countries. This should continue to depress bond yields overseas, which then makes our 1.85% 10 year Treasury a relatively high yield play. The Greek election on January 25 is being closely watched as it may lead to a possible Greek exit from the Euro (which is considered to be less risky than it was in 2010-2011). The US Treasury is also rallying due to the fallout from Switzerland’s surprise decision to untether the Swiss Franc from its self-imposed currency ceiling against the Euro. Currency markets are reeling and liquidity is pouring into US Treasuries. The 10 year hit a low of 1.75% this week, now at 1.86%. Loan Rates - Both CMBS and Life Companies are adjusting their rate floors, all-in coupons are in the mid to high 3’s or low 4’s. ….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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