GSPartners
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Volume XXIII | No. 42 | November 4, 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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1.63%
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5 Yr Swaps
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1.59%
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12-MAT
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0.26%
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3 Month LIBOR
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0.32%
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10 Yr US Treasury
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2.23%
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10 Yr Swaps
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2.11%
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11th Dist COFI
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0.65%
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6 Month LIBOR
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0.56%
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30 Yr US Treasury
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2.99%
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| | | Transaction Description: | | $25,500,000 Acquisition/Bridge Financing of Multitenant Industrial to 89% of Cost GSP successfully placed a high leverage non-recourse acquisition/bridge loan for a 78% leased multitenant industrial business park in the Pacific Southwest. This loan provides the Sponsor $2,450,000 for capital expenditures, tenant improvement and leasing commissions to cosmetically rehabilitate and stabilize the asset. Sized to 89% of the total capitalization, $23,050,000 of the on-book financing included mezzanine financing of $5,900,000. The loan will float at LIBOR + 6.00%, until the mezzanine tranche is repaid. The mezzanine loan is pre-payable at any time without penalty. Once the mezzanine loan is repaid, the rate is reduced to LIBOR + 4.25%. Interest only for three years, this loan offers two, 1-year options. |
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| | | Transaction Description: | | $1,500,000 Non-Recourse Single-Tenant Industrial Acquisition George Smith Partners successfully placed the $1,500,000 acquisition debt for a standalone manufacturing & distribution facility in Westminster, California. The single structure offers a 28’ minimum warehouse clearance and provides two truck bays on nearly an acre of land for the single-tenant operator. A quick close was required to meet the timetable of the Purchase and Sale Agreement. Loan approval was issued the same week as the third party reports were delivered. Fixed at 3.75% for five years, the non-recourse loan amortizes over 25 years. |
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| | | Transaction Description: | | Cash-Out on Flex Industrial w/Expiring Lease Salar Royaei successfully placed the 73% LTV refinance of a 17,000 square foot flex industrial building located in Bakersfield, California. Our Sponsor had recently acquired the asset utilizing seller carry-back financing to close in a timely manner. The subject property suffered from deferred maintenance and an easement encroachment/title issue relating to the previous owner. The current tenant lease was expiring and had not confirmed if they would vacate or roll. The new owner requested a capital fund to address the deferred maintenance issues and return a portion of his acquisition down payment. GSP identified a capital provider who became comfortable with our Sponsors’ business plan, financial strength and the market metrics. The lender also provided a waiver on loan proceeds based on actual value rather than the recent acquisition price. Fixed at 4.55% for five years, the recourse loan does not carry a pre-payment penalty. |
| | Rate: 4.55% | | Term: 5 Years | | Amort: 30 Years | | LTV: 73% | | Prepayment: None | | Recourse | | Lender Fee: Par | | Advisor: Salar Royaei |
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| | | | Balance Sheet Lending from LIBOR + 225 George Smith Partners is placing ground-up construction and bridge/reposition debt with a national Money Center Bank pricing from LIBOR + 225 to 250 to 65% of cost. All-in coupons are sub-3.0% for cash flowing and potentially cash flowing commercial assets from $3,000,000 to $50,000,000. Future good news dollars accrue interest when funded; there is not negative arbitrage. |
| | | 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 | Treasuries Spike on Fed Signals, Quote from Chair today: ‘Live Possibility’ of December Hike Today’s remark from Fed Chair Yellen further intensified the speculation for a December ‘liftoff’. Note that the Fed futures market’s probability of a December hike has gone from 35% to over 50% since last week’s Fed Statement. The 10-Year Treasury jumped from 2.02% to 2.22% since this announcement. The next 30 days will see markets focus closely on the key economic releases. This week’s employment report (October numbers) may be a big market mover. ‘Short vs. Long’. Since the Fed rate is a short term rate, their actions should affect the shorter term treasuries more than the long bonds. Today saw the 2-Year treasury hit its highest rate in 4 years shortly after Yellen’s testimony. The 10-Year actually rallied slightly with the yield dropping about 2 bps as traders feel that a rate hike should slow growth and keep inflation in check. Regardless, expect volatility in the 10-Year during the remainder of 2015. ...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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