GSPartners
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Volume XXIII | No. 31 | August 12, 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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1.52%
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5 Yr Swaps
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1.65%
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12-MAT
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0.19%
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3 Month LIBOR
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0.31%
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10 Yr US Treasury
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2.15%
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10 Yr Swaps
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2.23%
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11th Dist COFI
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0.66%
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6 Month LIBOR
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0.49%
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30 Yr US Treasury
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2.84%
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| | | Transaction Description: | | $9,870,000 Acquisition Financing on a Newly Constructed Nashville Apartment Community GSP successfully placed $9,870,000 of acquisition debt on a 74-unit Class A Nashville, Tennessee apartment community constructed in late 2014. The 70% leverage loan is fixed at 4.53% and has Interest Only payments for seven years of the 10 year term, allowing the Sponsor to maximize cash flow while also eliminating interest rate risk with a low long term fixed coupon. Lender provided an early rate lock option in a volatile interest rate environment despite a lack of property operating history due to new construction. |
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| | | Transaction Description: | | $1,725,000 100% Return of Cost Refinance for a Silverlake Multifamily George Smith Partners successfully placed the cash-out refinance for a 10 unit multifamily property located in the Silverlake area of Los Angeles, California, half a mile from Sunset Junction. The subject property was acquired in 2012 for $900,000 with significant deferred maintenance and underperforming rents. After acquisition, the Sponsor embarked on an extensive phased renovation, bringing the total cost basis to $1,700,000. The Sponsor fully leased the Property to market rents, creating substantial value that they wished to capture in a permanent refinance. GSP identified a Lender that funded 65% of the current value despite the actual cash basis. This financing allowed 100% return of equity to the Sponsor while retaining a strong cash-flowing asset. Fixed at 4.14% for 10 years, the non-recourse loan is interest-only for the entire term. |
| | Rate: 4.14% | | Term: 10 Years | | Amort: Interest Only | | LTV: 65% | | DCR: 1.40 | | Non-recourse | | Lender Fee: Par | | Advisors: Jonathan Lee, Adam Candler |
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| | | Transaction Description: | | $1,100,000 Refinance of First and Second Trust Deed Jason Gaffner successfully secured the small balance refinance of a 16 unit, 1940s vintage, wood framed property located in the Windsor Hills section of Los Angeles. The new loan retired an existing first and second trust deed on the property. The added advantage of three years of interest only significantly improved net cash flow. Fixed at 3.72% for ten years, the loan sized to a 55% LTV. The loan documentation process was streamlined for this program while all lender closing costs including lender legal were capped at $7,000. A step-down prepayment offers future flexibility for this low leveraged non-recourse loan. |
| | Rate: 3.72% | | Term: 10 Year Fixed | | Amort: 3 Years IO; 30 Years Thereafter | | LTV: 55% | | DCR: 1.50 | | Non-recourse | | Lender Fee: Par | | Advisor: Jason Gaffner |
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| | | | Western States Construction and Bridge Debt to 75% of Cost GSP is originating applications with a regional portfolio capital provider funding construction and bridge debt from $2,000,000 to $40,000,000; sized to 75% of cost. Pricing for core assets, student housing, and healthcare starts in the mid 4% to low 5% range based on Borrower financial strength and history within the specific product type being funded. Limited and non-recourse financing will be considered at lower leverages. |
| | | 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 | China Devaluation Fallout – Currency Wars? Stronger Dollar? Risk-off? Just as one global wildcard issue was being solved (Greece and its creditors are finalizing terms this week)… China announced a one-time adjustment on Tuesday, devaluing the Yuan 1.6% and then again devaluing it today another 2.0%. This led to major volatility in US and European equity markets and a flight to quality as investors flocked to US and German Treasuries, the 10 year T yield hit 2.07% today before closing at 2.15%. The devaluation will hurt US companies exporting to China, strengthen the dollar and contribute to the continuing weakness in commodity prices. The big question for rates is will this further dampen inflation enough for the Fed to delay the expected September liftoff? CMBS Credit Spreads: The sudden news from China contributed to a risk-off trade in the credit market. CMBS spreads are widening. A pool in the market this week is rumored to be pricing at about Swaps + 117 with further widening in the lower classes due to: China, huge supply, typical August illiquidity, bond buyers differentiating between pool content by originator with bond buyers increasingly preferring homogenous pools over several contributors. New loans are pricing anywhere from Swap + 215-240. The wide range is a function of the uncertainty in the market…. ...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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