|
FINfacts™ XXIV – No. 399 | December 21, 2023
|
|
|
| Prime Rate |
 8.50 |
| 1 Month LIBOR |
5.47 |
| 3 Month LIBOR |
5.63 |
| 6 Month LIBOR |
5.68 |
| 5 Yr SOFR Swap |
3.57 |
| 10 Yr SOFR Swap |
3.49 |
| 5 Yr US Treasury |
3.88 |
| 10 Yr US Treasury |
3.89 |
| 30 Yr US Treasury |
4.03 |
|
|
|
Loan Amount: $9,600,000
LTC: 80%
Term: 18-Months with Extension Options
|
|
Transaction Description:
George Smith Partners has successfully secured $9,600,000 in funding to facilitate the adaptive re-use of a historic downtown office tower into a multifamily/mixed-use project in Pontiac, MI. These funds will be utilized for the development of 103 market-rate multifamily units and over 23,000 square feet of commercial space.
The team at GSP faced challenges over the course of the raise due to limited comparable properties and public data in the Pontiac area. By leveraging our Sponsors’ local relationships and market knowledge, the GSP team effectively packaged and supported the clients’ 80% LTC financing request for the project’s duration. The lending institution exhibited tremendous confidence in the project’s progress and eventual completion. Upon completion, the project is poised to become a benchmark for mixed-use developments in the emerging downtown corridor of Pontiac, Michigan.
|
|
|
|
Rate: 8.75% Fixed
Term: 3 Years, Two 12-month extensions
Amortization: Full Term Interest-Only
Loan-to-Value: 66.4% As-Is LTV
Prepayment: 24 Months Minimum Interest Period
Loan Fee: 1% Origination Fee, 1.00% Exit Fee
Guaranty: Non-Recourse
|
|
Transaction Description:
George Smith Partners successfully placed a $9,850,000 bridge loan for the acquisition and renovation of an 86 unit, 1970 vintage residential community featuring two and three bedroom apartments in Grand Prairie, TX. GSP sourced a lender that was able to maximize proceeds at a fixed-rate rate while providing future capital expenditure funding for the Sponsor. The loan was sized to 66.4% Loan to As-Is Value and includes the full capital improvement and renovation budget. The sponsor intends on renovating approximately 75% of the units within the 3-year loan term.
|
|
|
|
George Smith used to enjoy reviewing the previous year’s interest rate predictions at year end. Last year’s Bloomberg survey of the top investment bank analysts indicated an average prediction of 3.48% for the 10-year Treasury at year end 2023. With one week to go the 10-year sits at 3.88% today, exactly where it closed at year end 2022. It dropped as low as 3.26% in April (flight to quality in the wake of the big regional bank failures) and then peaked at about 5.03% in October (as inflation seemed “entrenched” and “higher for longer” Fed speak spooked markets). It looks like Barclays and Deutsche Bank are pretty close with their predictions.
Speaking of the 10-year Treasury, Fed governor Goolsbee expressed “confusion” by market reaction to last week’s Fed meeting. He commented that markets “hear what they want to hear” and not “what the Fed Chair says.” Markets actually weren’t phased by his comments (these type of Fed comments lately are perceived as mandatory “more bark than bite” hawkish smoke screens). The futures market is predicting an 83% chance of a rate cut by the March 20 meeting (89 days from now but who’s counting?). As we say goodbye to a volatile year in capital markets, we wish everyone a safe and happy holiday season. Stay tuned…
| END-2023 TREASURY YIELD FORECASTS |
| |
|
|
10Y |
|
| Bank of America |
|
|
3.25% |
|
| Barclays |
|
|
3.75% |
|
| Citi |
|
|
3.25% |
|
| Deutsche Bank |
|
|
3.65% |
|
| Goldman Sachs |
|
|
4.30% |
|
| JPMorgan |
|
|
3.40% |
|
| Morgan Stanley |
|
|
3.50% |
|
| MUFG |
|
|
3.375% |
|
| NatWest Markets |
|
|
3.35% |
|
| RBC |
|
|
3.45% |
|
| Societe Generale |
|
|
3.25% |
|
| TD |
|
|
3.25% |
|
| 2022 Closing Level |
|
|
3.87% |
|
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!
|
|
