FINfacts™ XXIV – No. 261 | March 31, 2021

MARKET RATES
Prime Rate 3.25%
1 Month LIBOR 0.12%
6 Month LIBOR 0.21%
5 Yr Swap 1.04%
10 Yr Swap 1.75%
5 Yr US Treasury 0.93%
10 Yr US Treasury 1.74%
30 Yr US Treasury 2.38%

INTRODUCTION

Please join us for our Virtual Symposium on April 9, 2021 at 10:00am PT | 1:00pm ET.

REGISTER TODAYhttps://www.gspartners.com/event/


RECENT TRANSACTIONS
$16,500,000 Bridge Refinance for 173-Unit Multifamily Property; Sunnyvale, CA

Rate: 5.9% Fixed in Year 1; 6.9% in Year 2
Term: 12 Months + Extension Option for 12 Months
Lender Fee: 1% + 1% Extension
Amortization: Interest Only
LTV: 30%
Prepayment: Prepayable without penalty
Recourse: Non-Recourse

Transaction Description:

George Smith Partners secured a $16,500,000 loan for a 173-unit multifamily property in Sunnyvale, CA. The first mortgage has a 12-month term at 5.9% with no prepayment penalty. The loan may be extended for an additional 12 months at 6.9%. The Sponsor developed the Property and has owned it for over 40 years. In the past year, occupancy and collections were negatively affected by COVID-19’s effects on tenants’ ability to pay rent. Occupancy was also negatively affected by the significant upgrades and renovations made to a much larger neighboring property which undertook an aggressive post-renovation releasing program. The Sponsor engaged GSP to supply a quick-close solution when the existing lender declined to renew its loan. Unlike most lenders, GSP’s Lender did not require reserves for potential COVID rental interruptions and closed within 10 days of the issuance of its term sheet without requiring an appraisal or other third-party reports.

Advisors

Gary M. Tenzer
Principal/Co-Founder
Antonio Hachem
Principal
John Choi
Vice President
Wendy Wang
Vice President
Cornelius Baliukonis
Analyst

$7,685,000 Senior Construction Financing for a Mid-Developed Construction Building; Los Angeles, CA

Rate: 5.50%
Term: 24 months + two 6-month options to extend
Amortization: Interest Only
LTC: 55%
Guaranty: Full recourse

Transaction Description:

George Smith Partners secured a $7,685,000 construction loan for the completion of a development project in Los Angeles, California. The construction project was being fully paid out of pocket and had just finished two levels of subterranean parking. At this point of completion, the Sponsors decided to finance the remaining project costs instead of coming out of pocket the rest of the way. Many lenders didn’t want to finance the Project due to the mid-construction risk and those that did wanted some sort of banking relationship/deposit to come with the Project. GSP secured a capital source that was comfortable with the mid-construction project and didn’t require the Sponsors to bring in any fresh equity nor did they require any banking deposits.

Advisors

Reuven Risch
Vice President

$7,100,000 JV Equity Financing for 109-Unit SFR Construction in an Opportunity Zone; Phoenix, AZ

All Terms Confidential

Transaction Description:

George Smith Partners successfully advised on $7,100,000 in joint venture equity financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.

Advisors

Ed Steffelin
Senior Vice President
Evan Kinne
Senior Vice President
Portrait Blair Lewis
Analyst

Picture
HOT MONEY
Debt and Equity Financing

George Smith Partners identified a capital provider offering debt and equity from $3,000,000 to $30,000,000 for industrial, commercial, retail, self-storage, and special purpose properties. Rates start at 6% and terms are 1-3 years for bridge loans and 10+ years for longer-term facilities. The capital provider is focused in California and Hawaii and can close between 45-60 days.

More Hot Money ›

Pascale's Portrait
PASCALE'S PERSPECTIVE
Infrastructure Plans Fuel Treasury Yield Spike

Looking at the United States as a massive real estate asset is instructive. One could say that the American Society of Civil Engineers Report Card is our property condition report. The 2021 grade is “C-“ with special attention on public roadways, water systems, broadband capacity and the energy grid. A $2 trillion infrastructure plan is being discussed in Washington with uncertainty about how to pay for it. Bond markets are guessing that some increased deficit spending will be involved. The 10 year T bumped up to its recent high of 1.74%. The sell off in treasuries is largely based on the anticipation “inflation is coming, it has to be.” Last week’s PCE index (the Fed’s preferred inflation metric) came in at 1.3% annually. Other factors contributed such as fiscal year end selling of US Treasuries in Japan. The data: the next round of economic reports will tell the tale of the nascent recovery and may indicate signs of inflation. Last month’s reports were dragged down by the February storms that hit much of the country. 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 at (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 - 2021 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.