FINfacts™ XXIV – No. 172 | June 19, 2019

MARKET RATES
Prime Rate 5.50
1 Month LIBOR 2.38
6 Month LIBOR 2.30
5 Yr Swap 1.85
10 Yr Swap 1.97
5 Yr US Treasury 1.76
10 Yr US Treasury 2.03
30 Yr US Treasury 2.55

RECENT TRANSACTIONS
$17,600,000 Acquisition and Bridge Financing for a 30-Unit Asset in Village of La Jolla, CA

Rate: 30 Day LIBOR + 6.35%
Term: 24 Month + (1) 12 Month Extension
LTV: 65%

Transaction Description:

George Smith Partners arranged $17,610,000 in bridge financing for the acquisition of a fully operational 30-unit, waterfront, trophy asset on San Diego’s coastline in the Village of La Jolla. Sized to 83.9% of actual cost with 25% recourse. The 24-month term includes a 1-year extension option and is priced at LIBOR + 6.35%. The transaction closed in less than 2 weeks from the execution of the application.

GSP was able to source a wide array of competitive lenders that recognized both the strength of the real estate and the Sponsor’s ability to execute on the opportunity. Ultimately a capital provider was selected who was willing to work quickly and efficiently despite the variables and moving pieces that created substantial complexity. GSP was able to negotiate that several key items be finalized post-close.

Advisors

Malcolm Davies
Principal/Managing Director
Evan Kinne
Senior Vice President
Zachary Streit
Senior Vice President
Alexander Rossinsky
Vice President
Rachael Lewis
Vice President
Aiden Moran
Assistant Vice President
Maxwell Shedlosky
Assistant Vice President

$13,500,000 Non-Recourse Cash-Out First Mortgage 14-Day Close on a Vacant Building; in Los Angeles, CA

Rate: 6.90% Fixed
Term: 12 Months with One, Six-Month Extension Option
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse

Transaction Description:

George Smith Partners arranged a $13,500,000 non-recourse, cash-out first mortgage from a REIT to refinance out a maturing bank loan on a 36,600 square foot vacant building located along a major thoroughfare in Hollywood, California. The building had previously been 100% occupied by a now defunct retailer and this loan provides up to 18 months of term for the Sponsor to source a replacement tenant. The loan repaid existing debt, covered 100% of closing costs, and repatriated substantial equity to the Borrower. Although this loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve despite no in-place cash flow. Sized to 60% of value, the loan priced at 6.90% fixed for the initial 12-month loan term.

 

Advisors

Gary E. Mozer
Principal/Co-Founder
Katie H. Rodd
Senior Vice President
Michael Anderson-Mitterling
Senior Vice President
Kyle Howerton
Senior Vice President
Akash Rohera
Assistant Vice President

SPEAKERS CORNER

Please join Gary Tenzer, Principal/Co-Founder of George Smith Partners and other top industry professionals at Connect Apartments on June 20th at the JW Marriott Los Angeles, LA Live.  Gary will be moderating the discussion “Financing and Investing in Today’s Market” at 2:15 pm.  For more information about the conference, please visit https://connectconferences.com/apartments2019/.

For 20% off the registration, enter code TENZER20.


Picture
HOT MONEY
5.0% Fixed Rate Prepayable at Any Time

George Smith Partners is working with a non-recourse capital provider that is funding fixed & floating bridge loans. rate commercial, mezzanine, preferred and direct equity. With a focus on the top 150 MSA’s, the lender will fund up to 75% of value with initial terms up to 3 years. Program highlights include open prepayment and no minimum interest.

More Hot Money ›

Pascale's Portrait
PASCALE'S PERSPECTIVE
Rates: US Fed, ECB Lead A “Race to the Bottom”

Today’s Fed statement and press conference by Fed Chair Powell combined with the recent comments by ECB’s Mario Draghi can only be described as a “dove-fest” as another round of easing is upon us. First off, both central banks see little evidence of inflation now or in their forecasts. Both see trade disputes as harmful to long term growth prospects. Yesterday, the ECB announced potential moves including rate cuts and/or quantitative easing. This caused global bond yields to fall, the German 10 year hit an all-time low of negative 0.32%. Other banks are following suit: India’s central bank (the RBI) has cut rates 3 times this year with another rate cut expected in August. These moves have global trade consequences (which seems to be a hot topic these days) as the rate cuts devalue the currencies of those countries. If the US dollar is “too strong” in comparison, our products become too expensive overseas. This ratchets up pressure on Powell to “fall in line” and keep the dollar “affordable”. The Fed today: “the case for somewhat more accommodative policy has strengthened” and seven of the committee members (of the 17) expect a 0.50% rate cut by the end of 2019. If the Fed doesn’t lower rates at next month’s meeting, it will roil markets as a cut is now “priced in” to treasuries and equities. Stay tuned By David R. Pascale, Jr. , Senior Vice President at George Smith Partners

More Perspectives ›

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer (310) 867-2995 or TAugust@GSPartners.com


WWW.GSPARTNERS.COM

Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Office 310.557.8336
Fax 310.557.1276
Email finfacts@finfacts.net
© 1999 - 2019 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
Hi, just a reminder that you're receiving this email because you have expressed an interest in George Smith Partners. Don't forget to add finfacts@finfacts.net to your address book so we'll be sure to land in your inbox!

You may unsubscribe if you no longer wish to receive our emails.