GSP Insights

  • Preferred Equity Bridge Financing for Acquisition/Renovation and Construction; up to 85% LTC

    Hot Money

    August 7, 2019

    George Smith Partners is working with a nationwide lender and equity investor. Funding transactions from $2,000,000 – $20,000,000 for hospitality, industrial, office, retail, self-storage, single-tenant, assisted living and multifamily. The lender offers bridge financing starting at 8% with terms up to three years and 85% of cost. Value add, distressed and opportunistic opportunities are 90% of total equity for 12-60 months for a joint venture, preferred equity, mezzanine or GP co-invest structure.

  • Markets Roil on Expectations Unmet

    Pascale’s Perspective

    July 31, 2019

    Today’s quarter point rate cut (the first since 2008) was expected and already priced in to the markets. However, markets had priced in more than just one cut. During Fed Chair Powell’s press conference, equity markets plunged, reminiscent of the 2013 Taper Tantrum. Why? Fed Chair Powell strongly implied “one and done” by stating that this is a “mid-cycle rate adjustment”, as opposed to one in a series of rate cuts. The prospect of no more rate cuts this year sent markets reeling. It seems that asset values are very likely overpriced and the thought of pricing “mark to market” spooked markets that are clinging to the punchbowl and hoping that another rate cut is forthcoming. The 10-year Treasury closed at 2.01% and the 30 day LIBOR is at 2.23%. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners

  • National Portfolio Financing for Stabilized Assets with No Prepayment Penalties

    Hot Money

    July 31, 2019

    George Smith Partners is working with a national portfolio capital provider structured with no pre-payment penalty.  Transactions in primary and secondary markets from $2,000,000 to $15,000,000 fixed for 5+5 and seven year terms.  This recourse lender will advance to 75% of appraised value assuming a 1.25 DSCR on in-place cash flow for income properties and offers a 30 year amortization.  Most loans close within 60 days and there is no minimum interest or prepayment penalties.  Application fees and bank closing costs (excludes 3rd party charges) are waived on new opportunities for the next three months.

  • Debt Ceiling Agreement Pushes Reckoning Out To?

    Pascale’s Perspective

    July 24, 2019

    Washington is not known for making tough financial decisions and this week was no exception. The 2 year suspension of the debt ceiling definitely will increase the supply of Treasuries in coming years. The lack of fiscal discipline seems like a de facto embrace of Modern Monetary Theory. So, are Treasury yields spiking? Not yet. Global growth worries remain, along with more extraordinarily accommodative central bank stimulus. Today’s alarm signal was German manufacturing PMI at a 7 year low, prompting the ECB to most likely cut rates again tomorrow. Negative yielding bonds in Japan and Europe make a 2.00% 10 year T look good. Next week should be interesting with the senate vote on the debt ceiling on Tuesday (assuming the House passes this week), followed by the most telegraphed rate cut in recent history next Wednesday, July 31. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners

  • Permanent & Construction-to-Perm Financing for Spec or Pre-Leased Properties

    Hot Money

    July 24, 2019

    George Smith Partners is working with a national portfolio lender offering permanent and construction-to-perm loans for Industrial Warehouse product ranging from $10,000,000 to $65,000,000. With the ability to advance up to 75% for existing construction/permanent properties, pricing starts at 4% for existing assets and 5% for construction. Spec deals without preleasing are considered. The lender offers a flexible prepayment structure, with I/O during construction and lease up. Additional flexibility available on pricing on a case by case basis.

  • Promises Kept? Markets Hope So

    Pascale’s Perspective

    July 17, 2019

    The Fed has spent the last six weeks telegraphing a rate cut to occur at the July 30-31 meeting. The markets have priced in the expected cut; the “Powell put” is in effect. The rationale is the usual: prevent slowing growth and stimulate inflation closer to the 2.0% target. The 10 year treasury has traded in the 2.00% range since Powell and other Fed officials described the cut as “insurance” against further slowdowns and trade uncertainty. The problem with the Fed’s timing is that the latest economic data indicates strong growth (manufacturing output, retail sales, employment) and signs of inflation (CPI, PPI). It’s part of the contrarian news cycle: A vote of confidence by the Fed (no rate cut) will create market volatility. Debt Ceiling Update: The news last week that the Treasury will reach its debt limit in early September without an increase has created the usual Washington drama with very little time to spare (the House of Representatives recesses on July 26). This has started to disrupt the treasury market with a selloff in short term treasury notes (3-6 months), spiking those yields and creating some inversion. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners

  • Preferred Equity & Mezzanine Financing Up to 90% LTV

    Hot Money

    July 17, 2019

    George Smith Partners is working with a national lender offering preferred equity programs for office, urban retail and multifamily properties ranging from $5,000,000 to $50,000,000 in primary and secondary markets. With the ability to advance 90% of purchase price for new acquisitions, refinancings, recapitalizations, restructurings, DPOs, workouts and partner buy-outs pricing starts at 8% for terms up to seven years. The lender offers a flexible prepayment structure and future funding.

  • Gloomy Fed Outlook Rallies Markets

    Pascale’s Perspective

    July 10, 2019

    Today the world’s most influential banker (Fed Chair Powell) testified to Congress about global economic uncertainties including trade tensions, tariffs, and overall weakness in the global economy. Market reaction? The S&P index rallied to 3,000, it’s all time high. Why? We are back to the contrarian new cycle as bad news equals the return of the punchbowl (rate cuts). Powell’s testimony along with St Louis Fed President Bullard’s recent comments regarding a half point “insurance” move against global growth slowing means markets have priced in at least a half point decrease in the 2nd half of 2019. As oil prices spiked on global tensions (US/Iran) and weather (storms off the coast of Mexico), Powell expressed concern over “persistent weak inflation”. He also waved off last week’s positive US jobs report. For our borrowers, the news is good for now: indices (Treasuries and LIBOR) continue to drop, spreads are steady and lots of liquidity.

  • High Leverage Non-Recourse Bridge Financing

    Hot Money

    July 10, 2019

    George Smith Partners is placing high leverage non-recourse bridge debt up to 80% + of cost through a national portfolio lender. Funding value add transactions from $4,000,000 to $50,000,000 the Capital Provider offers flexible loan structures with terms up to 5 years. Floating rate pricing starts from LIBOR + 290. Lender has a particularly strong appetite for Multifamily product in secondary markets nationwide. Other property types they will finance are: Office, Retail, Industrial and Hospitality.

  • Non-Recourse Bridge & Mezzanine Financing up to 85% LTV

    Hot Money

    July 2, 2019

    George Smith Partners is working with a national capital provider funding non-recourse bridge and mezzanine debt to 85% of value. The Lender offers flexible loan structures with interest only terms up to 6 years (inclusive of extension options) for transactions from $10,000,000 to $75,000,000. Floating rate pricing starts at LIBOR + 275. The Lender has a strong appetite for Multifamily, Office, Industrial, Retail and Hospitality properties located in primary, secondary and tertiary markets.

  • Shahin Yazdi Takes A Deep Dive Into the Art of the Capital Stack on the RealCrowd Podcast

    Podcast

    June 26, 2019

    Shahin Yazdi, Principal and Managing Director of George Smith Partners explains the capital stack and the various components: debt, equity, mezzanine, preferred, different pricing, different rates, different loan to values. He talks about what the goals are for the different parts of the capital stack, how to arrange each source of capital in a transaction, where the art comes into structuring a transaction, and what makes the right capital stack for a deal.

    Click here to listen to the podcast.
    Click here to read the transcript.

  • Floating and Fixed Rate Bridge Financing with Future Funding

    Hot Money

    June 26, 2019

    George Smith Partners is working with a national capital provider that will provide non-recourse floating and fixed rate bridge financing up to 80% of cost for commercial real estate value add opportunities, with future funding for leasing, capital work, interest/carry and earnouts. With terms up to 5 years, the loan sizes range from $3,500,000 to $35,000,000 (and larger for portfolios) and floating pricing from +/-300 bsp over LIBOR and fixed pricing from 4.75%. Program highlights include no interest on unfunded future dollars, no minimum initial cash flow requirement at closing and flexible prepayment.

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