GSPartners
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Volume XXIII | No. 19 | May 20, 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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1.56%
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5 Yr Swaps
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1.67%
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12-MAT
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0.16%
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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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2.25%
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10 Yr Swaps
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2.29%
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11th Dist COFI
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0.69%
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6 Month LIBOR
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0.41%
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30 Yr US Treasury
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3.01%
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| | | Transaction Description: | | $8,600,000 Non-Recourse Cash-Out Refinance for a Non-Credit Single-Tenant Industrial Building GSP placed the $8,600,000 senior debt for the cash-out refinance of a single tenant industrial building in Valencia, California. The 115,453 square foot building sits on a 4.78 acre lot. The Sponsor occupied the property since 1998 as a tenant prior to purchasing the asset in 2005. This refinance included a $3,600,000 return of equity to the Borrower. Fixed at 4.50% for 10 years, the loan was sized to 66% of value and amortized on a 30 year schedule. |
Challenge: Sponsor required certainty of execution as his existing loan was maturing with no opportunity to extend. Zoning reports indicated an addition to the building was non-conforming and would take months to rectify. A maximum return of equity was also sought to expand operations. Single tenant non-credit owner/user assets are not a preferred asset in the capital markets. |
Solution: GSP demonstrated the strong asset location and long history & strength of the Borrowers’ business. GSP identified a capital source who is familiar with this market and subsequently qualified all terms prior to execution of the application. In order to avoid a balloon default, the lender agreed to fund prior to satisfying the zoning conditions uncovered during the due diligence process, giving the Borrower two months to address the non-conforming improvements. |
| | Rate: 4.50% | | Term: 10 Years | | Amort: 30 Years | | LTV: 66% | | Non-recourse | | Advisor: Gilda Rivera |
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| | | Transaction Description: | | $4,750,000 Refinance of Three Non-Credit Single Tenant Uncrossed Portfolio GSP successfully placed $4,750,000 in permanent debt on a three-property commercial portfolio located across two states. Each of the three assets are single-tenants, the first occupied by a non-chain, closely-held restaurant; the remaining two are leased to single-tenant flex/R&D users. GSP sourced three non-recourse loans on the portfolio, despite the individual single tenant exposure and non-investment grade profile. These loans are not crossed collateralized/cross defaulted. This refinance enabled the Sponsor to recapitalize his existing debt at a lower cost of capital and lock in a 4.20% coupon for 10 years with 30-year amortization. |
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| | | | Global Reposition Debt to 85% of Value GSP is working with a global debt provider lending from $20,000,000 to $150,000,000 sized up to 85% loan to value on all commercial real estate asset classes. Interest rates start at 5% on core asset classes in core markets for bridge debt. With the ability to fund anywhere in the debt stack, the lender also offers construction mezzanine financing with pricing from 8%-14%. |
| | | 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 | “Seasonality” Debate puts Focus on 2nd Quarter….. The latest expression at the Fed is “Residual Seasonality”. This week saw two competing Fed studies with differing interpretations of the effects of seasonality on the 2015 1st quarter GDP (which was an anemic 0.2%). How much was it affected by harsh weather and other “idiosyncratic factors”? The San Francisco Fed issued a study (using algorithms and historical data) that indicated 1st Quarter GDP grew at a 1.8% after seasonal “adjustments”. However, the Washington DC Fed office issued a study last week indicating that seasonal adjustments are not warranted. So both hawks and doves at the Fed have “cover” for their positions. Regardless, it puts the spotlight on 2nd Quarter economic data, “unfettered” by weather. Today’s release of Fed minutes took a June rate increase off the table, but investors are now not sure about September. The futures markets probability is now weighted to October, December or January. Meanwhile, a major investment bank research paper cautioned that waiting too long could result in volatile and swift increases in bond yields. The 10 year closed today at 2.25%, trading in a tight range between 2.15% and 2.30% in the past weeks. ….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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