GSPartners
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Volume XXIII | No. 15 | April 22, 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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1.39%
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5 Yr Swaps
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1.56%
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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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1.98%
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10 Yr Swaps
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2.06%
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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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2.66%
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| | | Transaction Description: | | $38,500,000 Acquisition of 164 Newly Constructed Multifamily Townhome Units in Oxnard, California GSP arranged $38,500,000 in 10 year on-book non-recourse acquisition financing from a national life insurance company on a 164-unit Class A multifamily property in Ventura County, Southern California. The subject is part of a masterplanned community with a complicated HOA structure. The newly constructed property was built in two phases and was in lease-up during the closing process. Sized to 70% of acquisition, the loan is priced at 185 basis points over the 10-year Treasury and locked at 3.90% at application execution, eliminating interest rate fluctuation during the closing process even though the property had not yet reached stabilized occupancy. Five years of Interest Only payments maximizes the Sponsor’s cash flow during the initial hold period but still provides the lender with acceptable balloon balance at the end of the term. |
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| | | Transaction Description: | | $9,450,000 Acquisition Bridge Financing for Vacant Special Use Building; Two Week Funding @ 95% of Purchase George Smith Partners successfully placed the acquisition debt of a 68,000 square foot vacant special use building in downtown Portland, Oregon. The business plan calls for a conversion from its current special purpose configuration to a single tenant campus facility. A fifteen year credit tenant lease was executed for the entire space just prior to the close of escrow. The non-recourse loan was sized to 95% of the acquisition price and funded in two weeks from termsheet execution. Fixed at 10% for 6 months, the loan carries an interest reserve for the non-cash flowing asset. |
Challenge: Tenant lease negotiations lagged and conventional debt was unable to facilitate the acquisition on the vacant building above 50% LTC. With two weeks until contract expiration, certainty of execution as applied for was mandatory at a very high leverage based on the assumption that the lease would be signed. |
Solution: GSP identified a lender who could respond quickly and agreed to process to commitment based on the probability that the lease would be executed prior to funding. The value of the executed lease would provide for conventional construction financing and the take-out for this high-leveraged acquisition bridge loan. The lease was vetted by all parties and signed just prior to funding and the termination of the purchase and sale contract, two weeks from termsheet execution. The six month term will allow ample time for the sponsor to obtain institutional construction financing. |
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| | | Transaction Description: | | Acquisition Financing for 16 Unit Los Angeles Brick Apartment Building George Smith Partners successfully sourced the acquisition debt for the purchase of a 16 unit brick multifamily property located in Mid City, Los Angeles. The 10,252 square foot property had one vacancy and had recently received numerous upgrades to the plumbing, electricity and roof. Sized to 75% of the purchase price, the loan is fixed for 5 years at 3.925% before floating at 6 Month LIBOR + 2.40% for the remaining 5 year term. Mr. Yazdi secured 3 years of interest only with a step down prepayment penalty for the first 2 years of the loan. The non-recourse loan closed in 30 days. |
| | Rate: 3.925% | | Term: 10 Years | | Amort: 3 Years Interest Only; 30 Years thereafter | | LTV: 75% | | DCR: 1.25 | | Non-recourse | | Lender Fee: Par | | Advisor: Shahin Yazdi |
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| | | | National Non-Recourse Bridge Lender Starting from 2.0% GSP identified a national non-recourse bridge provider funding $5,000,000 to $25,000,000 on cash flowing transitional assets from LIBOR + 180/300 for three years prior to options. High quality core product types and limited service hospitality are sized to 70% of cost constrained by a 7.0% debt yield at close. Assets in secondary markets are considered for strong sponsors. |
| | | 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 | |
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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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