Finfacts XXIV – No. 433
October 3, 2024Market Rates
Recent Financings
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Advisors
Ed Steffelin
Managing Director, GSP; President, AXCS Investments
Evan Kinne
Managing Director, GSP; CEO, AXCS Capital
Jordan Lipton
Senior Vice President
Nick Shapiro
Associate
$175,000,000 of JV Equity for a Leading Land Banker
Transaction Description:
George Smith Partners has successfully arranged a joint venture equity partnership, securing up to $175 million for a prominent land banking investment firm and closing on the first $137 million. This is the second partnership that GSP has arranged for their client within a three-month span, bringing the total equity commitment to $550 million enabling over $1 billion of total investments. The JV Equity will be utilized to finance the acquisition and horizontal development of fully entitled land designated for residential communities across the United States.
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Advisors
Matthew Kirisits
Director
Rate: 8.4% fixed
Term: 12 months
Prepay: None
Guaranty: Non-Recourse
$6,000,000 Bridge Loan for a Condominium Development Property in the Bay Area
Transaction Description:
George Smith Partners secured a $6,000,000 bridge loan for a condominium property in the Bay Area. The property received certificate of occupancy earlier this year and half of the units were successfully sold. The construction loan was coming due, so the Sponsor needed a quick close bridge loan that would give them time to sell the remaining units.
GSP was able to source a bridge lender that provided a fixed rate loan with no prepay. The loan allows the developer to release the remaining units from the collateral as they are sold. The refinance closed in just 3 weeks from the signed application.
Pascale’s Perspective
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Labor Market Shows Unexpected Strength
The labor market showed surprising resiliency this week while Richmond Fed President remarked he’s more concerned about inflation than the labor market. This week’s data: higher-than-expected job openings (indicating hiring is rebounding?), ADP employment report higher than expected (+143,000 jobs, cooler than the 200,000 recent average), ISM services sector activity jumped to a 1 ½-year high and lower-than-expected trade deficit. The service sector (2/3 of the US GDP) continues to show strength as leisure and hospitality (again) leads the way in job creation.
Speaking of GDP, the Atlanta Fed’s GDPNow estimate for the just completed Q3 is 2.5%. Fed Funds futures markets now predict a 68% chance of a 25 bp cut in November (note that 2 weeks ago it indicated a 50% chance of a 50bp cut). Job market strength contributed to an increase in Treasury yields, with the 10-year starting the week at 3.75%, now at 3.85%. Markets will be closely watching tomorrow’s monthly jobs report for clues to the Fed’s direction (and wondering how much those closely watched statistics will be revised in the coming weeks). Stay tuned…
By David R. Pascale, Jr., Senior Vice President at George Smith Partners.
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