GSPartners
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Volume XXIII | No. 13 | April 8, 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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0.18%
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5 Yr US Treasury
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1.35%
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5 Yr Swaps
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0.15%
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12-MAT
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0.15%
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3 Month LIBOR
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0.27%
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10 Yr US Treasury
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1.91%
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10 Yr Swaps
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2.01%
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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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2.53%
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| | | Transaction Description: | | $23,000,000 Refinance for 304,000 Shopping Center and Office Building on Leasehold GSP successfully placed the $23,000,000 bridge loan for the 238,000 square foot shopping center and 67,000 square foot office building in Inglewood, California. The early 1960s vintage property is on a 17 acre parcel on a major intersection with a traffic count over 60,000 cars per day. Underwritten to a 7.25% debt yield on in place income, this non-recourse loan pays off an existing term loan at maturity and will fund $4,000,0000 in renovations, tenant improvements, leasing commissions and other capital expenditures to reposition both the office and retail. The retail portion includes 4 value oriented chains and several local businesses. The reposition of the retail has already attracted new national tenants including restaurants. The office building will be renovated to feature street level retail. Upper floors are a mixture of a major tenant occupying two full floors and several local businesses. Several office tenants are month to month, but the building has strong occupancy history. Originally executed in the late 1950s, the ground lease was recently restated and extended. Interestingly one of the tenants ground leases a stand-alone restaurant pad from the Sponsor. The two-year interest only loan floats over the 30 day LIBOR floored at 5.15%, with a LIBOR cap. The loan has three - 12 month extension periods for an additional fee. |
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| | | Transaction Description: | | $3,210,000 Ground-Up Condo Construction to 75% of Cost Jonathan Lee arranged the ground-up construction financing for a 12 unit condominium project in the Koreatown (Harvard Heights) area of Los Angeles, California. The project will be a five-story structure, composed of one and two-bedroom units that will feature underground parking, premium fixtures, and open floor plans that range from 640 to 985 square feet. Located in a very walkable and transit-oriented area, this asset is well positioned to draw professional-level residents that want to live close to entertainment and employment centers. Sized to 75% of cost, the 18 month loan (with two six-month extension options) is priced at an all-in rate of 3.15%. |
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| | | | Non-Recourse Hospitality Perm and Reposition/Bridge Debt up to 85%LTC/LTV GSP is working with a national capital provider funding floating rate bridge and fixed-rate perm debt on flagged hospitality. Bridge requests from $5,000,000 to $25,000,000 sized to 85% loan-to-cost. Pricing starts at LIBOR plus 500 basis points, and can be non-recourse for high quality Sponsors. Permanent debt extends to 85% loan-to-value with a pre-payable mezzanine component; ie the mezzanine component may be replaced with equity or a lower cost of capital at a future date. Terms are 5 to 10 years fixed with up to a 30 year amortization on a non-recourse basis for stabilized assets. |
| | | 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 | Fed “Split” Over Timing…. Today’s Fed minutes reveal a debate over the timing of the first rate increase since 2006, referred to as “beginning normalization”. Does this mean that there will be a transition from the “new normal” to “normal”? Some policy makers feel that the economic data and future outlook warrant a June increase, while others are cautioning more patience, preferring to wait until September. Investors also noted that caution may be the path as the meeting took place before the disappointing March jobs report, released last Friday. The Fed does not want to raise rates too early and have to backtrack and lower rates if the economy stumbles…. Meanwhile, trends in Europe indicate that the Fed may not have a lot of control over long term rates as over $3 Trillion of European fixed rate debt has negative interest rates (dominated by Germany and France). Note that the 10 year yield for German government bonds is 0.16%. ....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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