GSPartners
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Volume XXIII | No. 36 | September 16, 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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1.61%
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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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2.29%
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10 Yr Swaps
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2.28%
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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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3.09%
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| | | Transaction Description: | | $13,900,000 Non-Recourse Limited Service Hotel Construction Financing to 80% of Cost George Smith Partners arranged construction financing for a 99-Room Hampton Inn Limited Service Hotel in the heart of Coastal California Wine Country. Uniquely situated off of Highway 101, our Sponsor purchased the land mid-2014 within a short drive of 60 operating vineyards. Set to open mid-2016, the hotel will feature a contemporary ranch design with wooden roofs and awnings. Guest rooms will feature refrigerators, microwaves, free high speed internet and 32” HDTV with free movie channels. Our Sponsor is an experienced hotel developer and owner, having built 9 hotels ground-up and performing major renovations on several others. GSP identified a non-bank lending source able to provide non-recourse, high leverage construction financing. Funded loan proceeds increased during the application process as construction costs were being finalized. Sized to 80% of costs and priced at LIBOR + 7.5%, the three year term offers 2 – one year extensions. |
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| | | Transaction Description: | | $5,000,000 Reposition Refinance for Non-Flagged Los Angeles Hotel GSP arranged financing that was structured with three credit facilities for the reposition refinance of an un-flagged hotel. The first credit facility was a recorded First Trust Deed that of $3,500,000 to satisfy the existing lienholder and cover additional partnership debt. Trailing cash flow history required the recordation of a Second Trust Deed from the same capital provider that funded $1,125,000 into a rehabilitation fund for capital upgrades. Additional funds were required to complete the Sponsor’s rehab plan so an unrecorded revolving working capital line for $375,000 was drafted to complete the capital project. Sized to 55% of value, recorded loan proceeds were limited by historical cash flow. The recourse loans are floating over Prime less 0.25% with a 3.75% floor for the 10 year term. The loan may be fixed via a SWAP vehicle at any time during the loan term. There is no prepayment penalty while the loan floats. The credit line revolver is priced at Prime plus 0.5% paid on balances as drawn for the two year term. |
| | Rate: Prime minus 0.25% | | Term: 10 Years | | Amort: 25 Years | | Prepayment: None | | Recourse | | Advisor: Jesse Cruz |
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| | | | Non-Recourse Nationwide Parking Structure and At-Grade Lot Financing A GSP capital provider has reached out to us with an allocation of funds they are looking to place prior to year-end. This national lender has a unique niche for at-grade parking lots and parking structures with a preference for CBD and airport locations. Loan sizes range from $4,000,000 to $65,000,000, sized to 75% of value. Non-recourse pricing for 5 year fixed terms start at 4.0% and 4.5% for 10 year fixed-terms. Interest Only is obtainable on loans leveraged up to 60% LTV. |
| | | 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 | | | Speakers Corner | GSP Founding Principal Steve Bram will be participating in the ICSC Western Conference General Session Panel at the San Diego Convention Center. 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 | The Decision……… Thursday marks the most highly anticipated Fed announcement in recent history. Economists and market watchers are nearly split down the middle RE predicting raise or no raise as worldwide markets are poised to react. Will the Fed raise rates? What guidance will they give regarding future increases? What effect does the Fed have on rates in the new normal post-crash economic world? To Raise or to Hold: (1) The Fed will raise tomorrow because: the continued uncertainty of waiting for the Fed is contributing to market volatility. The Fed needs to maintain credibility, markets have calmed in recent weeks giving cover to a raise, recent gains in oil prices are assuaging deflationary fears. (2) The Fed will not raise tomorrow because: They still want to wait for further data to come in as the US economic recovery remains inconsistent. Struggling emerging market currencies will be weakened further, they may want to not raise this month but provide more certain guidance for October or December 2015 and beyond. Note: Most recent raise cycles are not one and done (1999-2000: 6 raises; 2004-2005: 13 raises). The question is what is the normalization rate? Indications from the dot plots are approximately 3.75-4.00%, but many market watchers believe the economy could only stand a level of about 2.75-3.00%. CMBS: The first fall pools are pricing. The good news is that demand is solid and the market is firming up at new levels. An unusually low leverage pool saw AAA’s price at Swaps + 117 with price talk on some more standard pools is in the Swaps + 122-124 range. Originators are now more confident in pricing new 10 year, full leverage loans in the Swap + 240-260 range. …stay tuned... David R. Pascale, Jr. PS: Expect a quarter point raise…. |
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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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