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FINfacts™ XXIV – No. 327 | July 20, 2022
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| Prime Rate |
 4.75% |
| 1 Month LIBOR |
 2.16% |
| 6 Month LIBOR |
3.29% |
| 5 Yr SOFR Swap |
2.86% |
| 10 Yr SOFR Swap |
2.81% |
| 5 Yr US Treasury |
3.16% |
| 10 Yr US Treasury |
3.03% |
| 30 Yr US Treasury |
3.16% |
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Rate: 5.20% Fixed
Term: 3 Years
Amortization: Interest-Only
Guaranty: Non-Recourse
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Transaction Description:
George Smith Partners successfully advised on the placement of a $31,600,000 fixed-rate, non-recourse, bridge loan for the refinance of a 460,000 square-foot retail center located in central Florida. Although the Center is 93% occupied, lenders expressed concerns about JCPenney and the theater, given the ramifications of the pandemic.
Furthermore, the Sponsor required a cash-out refinance and a fixed-rate loan. With the Property’s dominant market position, strong institutional sponsorship, well-thought business plan, and low basis, GSP was able to successfully source a lender willing to provide non-recourse, fixed-rate bridge financing with significant cash-out.
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George Smith Partners has identified a debt fund providing mezzanine financing for ground-up construction. The capital provider will lend in the top 20 MSA with rates starting at SOFR+10%. The minimum capital allocation per deal is $10,000,000, with the ability to go $20,000,000, and leverage up to 80% LTC. Property types include multifamily, student housing, and industrial. The capital source has a strong appetite for institutional level opportunities.
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Last week’s market consensus that the Fed would increase rates by 100 basis points at next week’s meeting has ebbed. Multiple Fed officials spoke last Friday, just before the traditional pre-meeting “quiet period” where they refrain from public comment. Each one indicated a 75 basis point increase was appropriate, clearly telegraphing their intent. Some officials feel that a big increase could damage the strong labor market. I guess that means that a 75 basis hike next week is “dovish”? With little economic data this week, treasuries are trading in a tight range. The 10-Year Treasury has been fluctuating between 2.90% – 3.10%, closing today at 3.02%. The yield curve inversion is holding with the 2-Year closing 21 basis points above the 10-Year.
Next week will provide much more direction as it is “action-packed” with: Consumer Confidence on Tuesday, Fed meeting and statement on Wednesday, Q2 GDP on Thursday, and the all-important PCE report on Friday (the Fed’s preferred inflation gauge). The GDP report may show that we are in a recession now (defined as 2 consecutive quarters of negative GDP). Stay tuned….
By David R. Pascale, Jr. , Senior Vice President at George Smith Partners
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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
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Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
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© 1999 - 2024 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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