FINfacts™ XXIV – No. 433 | October 3, 2024

MARKET RATES
Prime Rate 8.00
1 Month LIBOR 4.96
3 Month LIBOR 4.85
6 Month LIBOR 4.68
5 Yr SOFR Swap 3.30
10 Yr SOFR Swap 3.36
5 Yr US Treasury 3.63
10 Yr US Treasury 3.85
30 Yr US Treasury 4.08

RECENT TRANSACTIONS
$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.  

Advisors

Ed Steffelin
Managing Director, GSP; President, AXCS Investments
Evan Kinne
Managing Director, GSP; CEO, AXCS Capital
Jordan Lipton
Senior Vice President
Nick Shapiro
Analyst

$6,000,000 Bridge Loan for a Condominium Development Property in the Bay Area

Rate: 8.4% fixed 

Term: 12 months 

Prepay: None 

Guaranty: Non-Recourse 

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.

Advisors

Matthew Kirisits
Director

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HOT MONEY
Bridge Lender Offering Fixed Rate of 8.9%

George Smith Partners has identified a bridge lender offering a fixed rate of 8.9% for properties located in California. For loans at a conservative LTV, the rate can go as low as 7.9%. The lender does not require a personal guarantee and can close in as little as 2 weeks with sufficient documentation. The term is limited to 24 months and there is no prepay or yield maintenance. Proceeds are limited to a maximum of 60% LTV, but the lender will allow a 2nd trust deed up to 80% LTV. The minimum and maximum loan sizes are $1MM to $25MM, but the lender may go higher on a case-by-case basis. The lender can do bridge loans on a variety of asset types, but they are not presently financing land or ground up construction. 

More Hot Money ›

Pascale's Portrait
PASCALE'S PERSPECTIVE
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.

More Perspectives ›

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Matthew Kirisits, at (310) 867-2951 or mkirisits@gspartners.com


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