|
FINfacts™ XXIV – No. 396 | November 30, 2023
|
|
|
| Prime Rate |
 8.50 |
| 1 Month LIBOR |
5.46 |
| 3 Month LIBOR |
5.64 |
| 6 Month LIBOR |
5.81 |
| 5 Yr SOFR Swap |
3.94 |
| 10 Yr SOFR Swap |
3.89 |
| 5 Yr US Treasury |
4.22 |
| 10 Yr US Treasury |
4.27 |
| 30 Yr US Treasury |
4.45 |
|
|
|
Agency Financing
Rate: 6.78% Fixed
Term: 5 Years
Amortization: 30-year amort/No interest only
Defeasance: Standard 4.75-year defeasance period
DSCR Minimum: 1.30X
Max LTV: 55%
Preferred Equity
Preferred Return: 13%
Current Pay: 8%
Accrual: 5%
|
|
Transaction Description:
George Smith Partners has arranged approximately $27,000,000 of Preferred Equity and $70,000,000 of Permanent Debt financing for the refinance of a 1,000+ bed student housing property. The purpose of the loan was to replace the maturing mezzanine debt and preferred equity.
GSP worked extensively with the client and their team to find the optimal structure to replace their existing lender, subordinate lender and preferred equity investors. The GSP team marketed three separate capitalizations including a ground-lease bifurcation, bridge debt, and preferred equity behind an agency loan with the goal of maximizing proceeds for the client.
|
|
|
|
Today’s PCE release indicated monthly core PCE increasing 0.2%, which puts the 3-month annualized average at 2.4%. That’s getting closer to the Fed’s target of 2.0% (remember this average was over 7.0% in mid-2022). The 10-year had another big week of moves. Starting at about 4.50% on Monday, rallying to 4.25% yesterday and up to 4.32% this morning.
Hawkish and influential Fed Governor Waller moved markets this week as he is “confident that policy is positioned to…get inflation back to 2%.” The “higher for longer” narrative that dominated the recent months has receded. Waller added he could imagine the Fed lowering rates after seeing continuing disinflation over the next 3 months. Watching the data (labor market, consumer strength), continuing jobless claims hit a 2-year high, and big Black Friday retail sales were aided by a big increase in “buy now pay later” purchase plans. Inside the PCE data, goods were down 0.3%, and services were up 0.2%.
Fed Futures markets indicate no rate increase at next month’s meeting. That will mark 3 straight pauses and (hopefully) mark this as the “pause before the pivot.” July was the last rate increase and the last few tightening cycles have averaged about 9 months between the last increase and the first cut. Could the pivot come at the May 2024 meeting? 150 days from now, but who’s counting?…
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 David Gravelle, at (310) 867-2974 or dgravelle@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!
|
|
