|
FINfacts™ XXIV – No.229 | August 5, 2020
|
|
|
| Prime Rate |
 3.25% |
| 1 Month LIBOR |
 0.15%
|
| 6 Month LIBOR |
0.32% |
| 5 Yr Swap |
 0.28% |
| 10 Yr Swap |
0.55% |
| 5 Yr US Treasury |
0.22% |
| 10 Yr US Treasury |
0.55% |
| 30 Yr US Treasury |
1.23% |
|
|
|
Rate: Prime + .50% with 4.00% Floor
Term: 3 Years
Amortization: 18 Months Interest Only
Loan-to-Cost: 73%
Prepayment: Open Prepay
Loan Fee: 0.5% in / No exit fee
|
|
Transaction Description:
George Smith Partners arranged $4,300,000 in acquisition bridge financing for the purchase and reposition of an 18-unit multifamily property located in Long Beach, CA. The Sponsor put the Property under contract during the COVID-19 pandemic. The Property has several vacant units which represents an opportunity for the Sponsor to immediately add value and commence their value-add business plan.
The loan includes future funding for an extensive renovation of unit interiors and an exterior upgrade. The three-year bridge loan is interest only for the first 18 months and carries a floating rate of Prime + 0.50% with a 4.00% floor. Interest is not charged on the holdback until funds are drawn. The lender fee was limited to a 0.50% origination fee with no exit fee. The loan structure has no prepayment penalty, providing the Sponsor with ultimate flexibility.
|
|
|
|
If you missed any of our past webinars/podcasts/short videos, below are links to the recordings.
|
|
|
George Smith Partners is working with a non-recourse capital provider funding bridge loans from $10,000,000 to $50,000,000. With a focus in California, the portfolio lender will fund up to 60% of value but will allow a recorded second Deed of Trust behind them up to 85% of value. With terms up to one year, program highlights include no prepayment and interest only. Decision making is flat and seven-business day close is their normal execution.
|
|
|
With the economy still reeling from the effects of COVID and much of the population unemployed and facing expiring benefits and eviction, there is widespread consensus that another stimulus package is essential. Congress has heard from a huge spectrum of America on both sides of the aisle: their constituents, economists, past Fed Chairs Yellen and Bernanke, Fed Chair Powell, small business associations, fortune 500 CEOs, community groups, state and local government officials, and more. This is one of the most critical fiscal legislative moments in history. Washington is trying to push through their disfunction, partisanship and heated election year politics to craft a bill. With summer recess set for next week, it seems that this Friday is the deadline for an agreement (which will then take days to document and be voted on). The stakes are high for commercial real estate of course. Enhanced unemployment benefits and/or stimulus checks are critical for the apartment and retail sectors (and for the economy in general). The CRE council and some legislators are trying to include aid to commercial real estate owners, particularly those with CMBS loans. CMBS delinquencies are climbing (over 10% overall, with hotels over 25%). Servicers are unwilling to offer continued (or any) forbearance and borrowers are looking to Washington for relief. Congress is also being swayed by the hit to the hotel industry, which is a huge employer. The proposal taking shape involves banks providing preferred equity for 12-18 months of debt service, expenses and taxes. The preferred equity will be at a rock bottom rate of 2.5%. The loans will be guaranteed by the U.S. government. The preferred equity structure will not violate CMBS borrower covenants on additional debt. The negotiations are difficult and contentious, some participants are saying it is “50/50” that a comprehensive deal will get done. The stakes are high. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners
|
|
|
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
|
|
Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
|
|
|
|
© 1999 - 2024 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@gspartners.com to your address book so we'll be sure to land in your inbox!
|
|
