GSPartners
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Volume XXIII | No. 29 | July 29, 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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0.19%
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5 Yr US Treasury
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1.61%
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5 Yr Swaps
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1.72%
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12-MAT
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0.18%
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3 Month LIBOR
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0.29%
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10 Yr US Treasury
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2.29%
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10 Yr Swaps
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2.37%
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11th Dist COFI
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0.69%
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6 Month LIBOR
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0.47%
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30 Yr US Treasury
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2.99%
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| | | Transaction Description: | | $25,000,000 Joint Venture Equity Financing GSP successfully arraigned the Joint Venture equity financing for a sponsorship group involved in various development strategies. One targeted project is the coastal infill development of luxury single family residences in affluent sea-side neighborhoods. |
Challenge: This type of capital placement is difficult to structure due to the disparate nature and location of all the assets being developed. These transactions are sponsorship driven where the importance of articulating the strengths of the sponsorship group to capital is paramount. |
Solution: Utilizing GSP’s program to introduce sponsorship group’s to institutional sources of capital for various strategies successfully led to the close of this financing. While various other opportunities had been presented over the years, the benefits of gaining a knowledge foothold of the Sponsor’s infrastructure and platform helped achieve the successful and eventual closing with this particular strategy. |
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| | | Transaction Description: | | $6,550,000 Acquisition and Bridge Loan of 108 Unit San Antonio Apartment Complex GSP arraigned an 80% loan to purchase, non-recourse acquisition and bridge loan in 45 days from being introduced to the opportunity. Floating at 4.75% over LIBOR, the three year term offers two – 1 year extension options. With only 45 days to execute on the purchase option, our Sponsor requested a highly leverage execution with the added ability to future fund heavy renovation of the facility. Sized to 80% of the acquisition price, this capital provider will fund all future renovation costs. Full loan commitment was obtained within 30 days loan application. |
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| | | Transaction Description: | | Ground-Up 14-Unit Denver Condominium Construction JJay Brooks arranged the $3,950,000 construction loan for a 14-unit residential condominium development in Denver, Colorado. Located in an increasingly popular urban area, our Sponsor received ample interest in lining up pre-sales prior to ground-breaking. Sized to 72% of total cost and priced at P+1, repayment guarantees burn down to 50% of the outstanding loan balance upon Certificate of Occupancy and sale of units currently under contract. The 23 month loan term carried a ¾ point origination fee. |
| | Rate: Prime + 1.00% | | Term: 23 Months | | Amort: Interest Only | | LTC: 72% | | Lender Fee: 0.75% | | Advisor: J. Jay Brooks |
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| | | | Regional Multifamily Lender from 3% A Southern California regional lender is expanding multifamily originations with their recent addition of several marketing pros and support staff. Bay Area and SoCal stabilized multifamily assets are underwritten to a 1.15 dcr with pricing starting at 3.0% fixed for three years to 3.9% fixed for seven years. Loans roll into a LIBOR based floater for the balance of the 30 year amortization. Step-down prepayments are structured for loan requests up to $10,000,000. Closing costs are minimal for this streamlined process - there is no lender origination fee. |
| | | 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 | Ready for Liftoff? Remember the summer of 2004? The Fed committee most likely had that in mind today, as this month’s meeting is predicted to be the last one before raising rates for the first time in 7 years. In May 2004, the Fed removed the word “patient” from their message as they signaled markets that the increase was coming in the next meeting. The Fed then raised rates 0.25% for 17 consecutive meetings. Today’s announcement left rates unchanged, painted a more positive economic outlook and notes some strengthening in the jobs market. They also note that inflation remains tame (recent reports show a 0.2% annual rise in prices, far from the 2.0% Fed target rate.) Interestingly, they refer to the continuing rout in commodity prices as “transitory” and make no mention of China’s issues. The Fed futures markets show that markets anticipate a 40% chance of a rise in September with more certainty (over 50%) in October or December with a consensus of two 0.25% hikes this year. The 10 year treasury is trading in the 2.25% range today. Many economists believe the Treasury will not hit 3.00% this year (it has not been 3.00% since 2014). One survey indicated a year end of 2.75%. CMBS continues to stabilize after the market roiling early in the month with lenders getting aggressive on proceeds and pushing pricing. Spreads for full leverage 10 year loans range from SWAPs + 205-220 depending on quality; all-in coupons around 4.50% (after nearing 5.00% earlier in the month)… ...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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