GSPartners
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Volume XXIII | No. 6 | February 18, 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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1.53%
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5 Yr Swaps
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1.68%
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12-MAT
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0.13%
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3 Month LIBOR
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0.26%
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10 Yr US Treasury
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2.07%
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10 Yr Swaps
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2.21%
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11th Dist COFI
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0.69%
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6 Month LIBOR
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0.38%
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30 Yr US Treasury
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2.72%
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| | | Transaction Description: | | $12,400,000 Cash-Out Refinance of an Inland Empire Community Retail Center GSP successfully placed $12,400,000 in permanent debt on an 80% occupied 1960’s vintage Inland Empire multi-tenant retail property, anchored by a national off-price retailer. Due to the property’s age, tenancy, and other characteristics, GSP leveraged its industry knowledge to target CMBS lenders with strong B-Buyer relationships in order to gauge the secondary market’s response to the prior to conducting due diligence. This increased certainty of execution at the terms provided at application. The 75% leverage loan enabled the Sponsor to secure a partial return of equity and lock in a 4.25% ten-year coupon with a 30-year amortization schedule. |
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| | | Transaction Description: | | $8,150,000 Non-Recourse Acquisition and Pre-Development Loan George Smith Partners successfully placed the acquisition and site development financing of a 36,320 square foot parcel fully entitled for a proposed 62-unit condominium tower in San Diego, California. The project is situated in a world class location adjacent to the renowned Balboa Park. The 12 month loan allows the developer to demolish the existing vacant medical office building and complete site work for vertical construction. The non-recourse loan was sized to 40% of total acquisition and site development costs, priced at Prime + 1.00% with a 5.0% floor. Vertical construction will be funded by an alternative capital source and is slated for June 2015. |
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| | | Transaction Description: | | $4,000,000 Anchorage Apartment Financing GSP successfully arranged a $4,000,000 permanent refinance for a 60-unit apartment building in Anchorage, Alaska. The property is a beautifully maintained 1980’s vintage asset with 100% occupancy with numerous long-term tenants paying below market rents. The borrower developed the property and “survived” multiple major market swings and as a consequence, was not willing to accept a loan with cash management or lender control triggers associated with fluctuating cash flow. Sized to 75% LTV, the non-recourse loan is fixed for ten years at 4.43%, amortized over 30 years and does not require a cash management system. |
| | Rate: 4.43% | | Term: 10 Years | | Amort: 30 Years | | LTV: 75% | | Non-recourse | | Lender Fee: Par | | Advisor: J Jay Brooks |
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| | | | Treasuries Drop – Can I rate lock? The tumble of long-term indexes netted sub-4% coupons for moderately leveraged commercial real estate transactions last week, precipitating a number of inquiries into early rate-locking fully indexed coupons. Traditionally, Life Insurance Companies held the exclusive for locking the full coupon prior to loan approval and/or for any period of time longer than a week. Multiple capital providers including regional banks, agencies (Freddie Mac & Fannie Mae) have entertained the lock at application request but not for periods beyond the 60 day due diligence period. As more capital programs enter the market, we are once again witnessing non-LifeCo rate locks as far forward as 12 months from regional banks, agencies and most recently, Wall Street CMBS executions. An add-on premium of 4 to 6 basis points per month is added to the coupon. Only fully stabilized or nearly stabilized assets are considered for an extensive advance lock position. |
| | | 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 | “Patient” Fed Cools Treasury Spike Today’s release of last month’s Fed minutes indicated continuing “patience” and a cautious Fed that is ultra “self-aware” of its ability to potentially derail a fragile recovery. The 10 year T closed at 2.07% after hitting 2.15% yesterday, capping off a 50 bps increase since mid-January. The combination of the January jobs report and Greece’s ability to stave off collapse contributed to a sell-off in treasuries. (Greece-markets seem “immune” to the possibility of a Greece exit from the Euro, much different from 2010 as Italy, Spain, etc. has strengthened their economies in the interim and a higher concentration of Greek debt is owned by central banks vs private investors). Today’s PPI reports also showed producer prices fell 0.8% last month, seasonally adjusted to negative 0.1%. These numbers also helped push back expectations of any rate increases as the Fed inflation target is 2.0%. The PPI info is mostly driven by dropping oil prices and therefore is not considered a harbinger of deflation (which is across the board price reductions in all sectors). …..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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