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FINfacts™ XXIV – No. 397 | December 7, 2023
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| Prime Rate |
 8.50 |
| 1 Month LIBOR |
4.73 |
| 3 Month LIBOR |
5.63 |
| 6 Month LIBOR |
5.76 |
| 5 Yr SOFR Swap |
3.82 |
| 10 Yr SOFR Swap |
3.74 |
| 5 Yr US Treasury |
4.12 |
| 10 Yr US Treasury |
4.12 |
| 30 Yr US Treasury |
4.22 |
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Rate: Confidential
Term: 18 Months
Origination Fee: 1.5%
Exit Fee: 0.50%
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Transaction Description:
George Smith Partners successfully arranged a $22,000,000 loan for 92 acres of entitled land in Apex, a pioneering new growth area in a Western State. While some of the adjacent land has recently traded, utilities and roads are currently under construction. The Sponsor will build over 1 million square feet of industrial buildings and is currently talking to potential equity partners. The Sponsor had retained a national mortgage brokerage company that was unable to locate any financing for the Sponsor. The Sponsor approached GSP eight weeks prior to their maturity date to assist in the refinance. GSP completed a full marketing and identified two competitive lenders that could reach the desired proceeds level and close quickly. One of the lenders had significantly more local market experience providing more surety of close.
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George Smith Partners has identified a capital provider financing senior and stretch senior loans for ground-up construction and development of high-quality self-storage facilities. They offer a fixed-rate, interest-only program with rates in the low to mid-teens. Additionally, they will lend up to 95% of total approved hard and soft cost incurred or advanced commencing at loan closing. Terms are 36 months plus one six-month extension subject to satisfaction of defined milestones including issuance of certificate of occupancy (typically within 18 months). This capital provider lends in the United States and Canada. To close, land must be contributed by the builder with all necessary zoning and entitlements in place.
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Over the past year, the Fed has been highly focused on labor market dynamics as they look to (hopefully) ending the hiking cycle. This week’s data continued the cooling labor market narrative: factory orders down more than expected (Monday), lower than expected job openings (Tuesday), ADP report showing lower than expected private sector jobs added (Wednesday), and Initial jobless claims increased slightly (today). The 10-year T is now at 4.11%. Also, note that September and October payroll numbers were revised downward – continuing a stream of several downward revisions in employment statistics. The Fed is hyper-concerned with wage inflation and labor market tightness coming out of the massive Covid fiscal stimulus. When job openings per unemployed worker approached 2 to 1 (see chart), any chance of price increases moderating was slim to none. The Fed is expected to keep rates steady at next week’s meeting with all of the action in the commentary, Powell’s presser and a new “dot plot” of predicted economic conditions for 2024. 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 David Gravelle, at (310) 867-2974 or dgravelle@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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