GSPartners
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Volume XXIII | No. 34 | September 2, 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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0.20%
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5 Yr US Treasury
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1.51%
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5 Yr Swaps
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1.61%
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12-MAT
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0.22%
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3 Month LIBOR
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0.33%
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10 Yr US Treasury
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2.18%
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10 Yr Swaps
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2.23%
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11th Dist COFI
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0.64%
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6 Month LIBOR
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0.54%
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30 Yr US Treasury
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2.95%
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| | | Transaction Description: | | $18,000,000 Non-Recourse Acquisition Financing on a San Gabriel Valley Medical Office Building GSP arranged the $18,037,500 non-recourse first mortgage from a regional commercial bank on the acquisition of an 114,471 square foot, 1940’s San Gabriel Valley medical office building. The loan allows the opportunity for the Sponsor to redevelop an approximately one-acre surface parking lot at a future date. GSP sourced a lender who was comfortable with the numerous month-to-month tenants in the mid-century vintage, masonry construction building. The subject is not adjacent to a complimentary hospital system. Sized to 65% of purchase price, the first mortgage priced at one-month LIBOR plus 2.65% (2.90% all-in today with a 25 basis point floor) and required a LIBOR cap with a 3.00% strike price for the first two years of the term. The LIBOR cap renewal structured for the third year reduced the cap cost to Borrower by shortening the cap’s duration. Interest only for the first 12 months, the 3 year term amortizes over 25 years for the remaining loan term. |
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| | | Transaction Description: | | $4,000,000 Cash-Out Refinance for 156 Unit Apartment Complex GSP placed the $4,000,000 cash-out refinance of a 156 unit apartment building located in the Pacific Southwest - the subject was acquired in 2012 for $3,750,000. In 2013, a fire at the property destroyed over 25% of the units. At the time of this application, 15% of the units were still in lease-up. The loan was sized to 65% of As-Is Value and fixed for 5 years at 3.44% before floating for the remainder of the 20 year term at 6 Month LIBOR + 2.75%. The first year of the non-recourse loan is interest only then amortizes over 30 years. Pre-payment steps down 1% each year from 5%, open the remaining 15 years at par. |
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| | | | Bridge Debt from $5,000,000 to 90% of Cost GSP is closing heavy bridge/reposition transactions with a national non-recourse debt fund advancing to 90% of cost. Focused on core assets, all markets inclusive of tertiary locations are considered for transactions up to $30,000,000. Below break-even coverage at funding is supplemented with a debt service reserve. Pricing starts at 5.75% over LIBOR at par subject to a 1.5% exit fee.
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| | | 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 | | | George Smith Partners’ Paid Analyst Rotational Program | GSP is now accepting applications for our Fall 2015 Rotational Analyst Program. Entry-level analysts will rotate through various teams and exposed to all facets of commercial real estate investment banking. This competitive rotational program lasts 20 weeks where analysts will be evaluated for the possibility of a permanent position at the firm. Please forward cover letter and resumes to resume@gspartners.com by September 12, 2015. | | | Speakers Corner | GSP Founding Principal Steve Bram will be participating in the ICSC Western Conference General Session Panel at the San Diego Convention Center later this month. Mr. Bram will participate with four other top industry specialists including Bill Passo, Larry Kosmot, Chis Wilson and Pat Barber on creating and maintaining value in Commercial Real Estate. ICSC President & CEO Michael Kercheval will moderate. The September 16 through 18 convention will feature Key Note Speaker Ben Stein. | | | Pascale's Perspective | Thoughts on the great re-pricing….. During the long bull market in stocks (until recent events), investors have repeatedly shrugged off bad news or sluggish growth reports and continued their purchase of equities. Why? The market has been supported by two major assumptions; 1) China’s growth is robust and ongoing, managed and controlled by an ultra-competent central government; and 2) Ultra low interest rates are in effect for a while (sometimes bolstered by QE). As investors realized that both of those assumptions are no longer supported, they focused on actual fundamentals and realized everything is overpriced. Everything is connected: During some of the recent dramatic stock market plunges, it was interesting to note that long Treasury yields did not drop. Usually, investors sell stocks and buy safe haven bonds. In recent weeks, it appeared that stocks and bonds were selling. China holds about $1.5 Trillion in US Treasuries. They have been selling lately in order to replace liquidity in their financial system to compensate for their recent moves to inject funds into their markets. The oil states have been significant buyers of Treasuries while oil prices were in the $75 per barrel range. Those purchases have also slowed. This is a new dynamic and another venture into uncertain territory. CMBS: Originators are still waiting for the first fall pools to price next week in order to really price loans effectively, but with huge supply scheduled for September, it is unclear how much narrowing we can expect. ….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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