GSPartners
|
|
|
|
Volume XXIII | No. 41 | October 28, 2015
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
3.25%
|
1 Month LIBOR
|
0.20%
|
5 Yr US Treasury
|
1.46%
|
5 Yr Swaps
|
1.44%
|
|
12-MAT
|
0.24%
|
3 Month LIBOR
|
0.32%
|
10 Yr US Treasury
|
2.10%
|
10 Yr Swaps
|
2.02%
|
|
11th Dist COFI
|
0.64%
|
6 Month LIBOR
|
0.52%
|
30 Yr US Treasury
|
2.88%
|
|
|
|
| | | Transaction Description: | | $11,625,000 Non-Recourse Retail Acquisition to 75% of Cost George Smith Partners arranged the $11,625,000 non-recourse acquisition loan for a 78,169 square foot grocery anchored Cincinnati, Ohio retail. This loan was structured to address several events taking place during the ten-year loan term: A major tenant representing 40% of the net rentable has a lease expiration option during the first five years of the loan term. The Sponsor required a partial release of collateral without a loan pay-down to facilitate a pad sale. GSP worked closely with the lender to document the exceptionally low vacancy of the market and the value of this irreplaceable location, creating a high probability that the tenant will renew. No value was allocated to the out-parcel for underwriting purposes, allowing for the future release without any loan reduction. Terms for this non-recourse loan are confidential. |
| |
|
| | | Transaction Description: | | $7,800,000 Non-Recourse Acquisition and Pre-Development Financing on a West Los Angeles Office & Retail Building GSP arranged the $7,795,000 ($624/SF) non-recourse first mortgage from a national debt fund for the acquisition of a 12,500 square foot office and retail building located in West Los Angeles. The 12,500 square foot building was 58% occupied at close with all tenants on month-to-month leases and inadequate cash flow to cover debt service. Cash flow will further decrease post-closing as the Sponsor vacates existing tenants to convert the space to high-end multi-tenant retail. Sized to 80% loan-to-cost, the quick-close acquisition and pre-development loan priced at 9.75% fixed for the 12-month loan duration. |
| |
|
| | | Transaction Description: | | $5,000,000 Joint Venture Equity Line-of-Credit GSP successfully placed the $5,000,000 Joint Venture equity facility for a single family home developer focused on Los Angeles’ Small Lot Ordinance. This facility is structured to provide equity on an as-needed basis, functioning similar to a line-of-credit. The Borrower has the option to draw down equity for entitlement, construction, or both. Each transaction is sized individually, and equity can be split on an 80/20 or 90/10 basis, with a waterfall based on performance. Accrual rates on the equity vary and are contingent on risk. A $1,080,000 draw for an 11-unit small lot project located in Northeast Los Angeles has already been exercised. The Sponsor has four additional projects circled in their development pipeline and is actively looking to ramp up their portfolio. |
| |
|
| | | | Multifamily Bridge to Perm with Forward Rate Lock GSP identified a national lender funding acquisition bridge/reposition multifamily assets with the ability to forward rate lock the permanent take-out loan. Non-recourse, interest only, bridge debt, from $5,000,000 to $50,000,000 are sized up to 85% of purchase price with pricing starting at 2.00% over LIBOR. A permanent loan with an 18 month forward rate lock commitment was recently priced at 4.25%. Forward pricing is based upon proforma leverage and dcr. Interest only will be considered on a case by case basis. The rate lock alleviates the potential risk of a rising interest rate market for Borrowers while the asset stabilizes. |
| | | 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 | | | Jonathan Lee Expands GSP Team with Recent Development | Nine months in the making, Principal Jonathan Lee witnessed his wife Monica’s phenomenal delivery of his daughter Mackenzie Baylor Lee early Monday morning. At 7 pounds and 15 ounces, baby and mother are doing marvelous. Upon his first meeting, big brother Jackson had enthusiastically presented a Joint Venture Agreement for the sharing rights to the parental exclusivity he enjoyed for the prior three years. Please join us in welcoming Mackenzie to our expanding GSP Team! | | | Pascale’s Perspective | 2015 Lift-off? December Rate Rise Odds Increase….. Today’s Fed meeting did not include an announcement of the long awaited rate increase as expected but investors are parsing the statement, and it seems like a December 2015 rate hike is a strong possibility. Even with no inflation and less than solid economic fundamentals, the Fed may be painted into a corner. There is a consensus (in hindsight) that the Fed may have missed a window to increase rates in May 2015 - before all the summer turmoil. They have repeatedly indicated an increase in 2015, so they may need to increase to maintain credibility. Endless speculation leading up to each meeting has led to massive volatility in emerging market currencies (and other markets), which may be relieved by some kind of resolution. The certainty of an actual move may be less harmful than the continuing uncertainty. Major clues from the statement: (1) Household and business spending was upgraded from moderate to solid; (2) The recent global events line was reduced and used as a summary, indicating less concern or a desire to show less concern; (3) from the statement: whether it will be appropriate to raise the target range at its next meeting (italics added). The last item is very telling. The Fed is specifically drawing attention to the December 2015 meeting, the surest sign that it is telegraphing the markets, trying to communicate effectively and avoiding another taper tantrum. Meanwhile, the new budget deal passed today takes some major uncertainty off the table. Focus on Mergers: This week’s blockbuster acquisition of Rite Aid by Walgreens and news of a Hyatt/Starwood merger will affect real estate dynamics. Net: One less major tenant for retail owners and a huge shake-up in franchise options for hoteliers. …stay tuned… David R. Pascale, Jr. |
|
|
|
|
©2015 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
