| Transactions of the Week |  | |  | | Transaction Description: | | $2,500,000 Acquisition/Bridge Financing for 90,000 sf Vacant Industrial Property This 4 building property is well located adjacent to the Alameda Corridor in South Los Angeles. Our borrower owns other properties in the market and has demonstrated the ability to operate and lease warehouses. His business plan is to renovate this older property, divide into market appropriate tenant spaces and stabilize. The $2,500,000 purchase price required an additional $1,500,000 of renovation costs. Borrowing entity includes a foreign national equity partner. GSP arranged 62.5% of total project cost financing with a local lender who is comfortable with the borrower expertise and entity structure. This loan also provides for a mini-perm option upon stabilization. | | | | |  | | Transaction Description: | | $1,600,000 Interest Only, Non-Recourse Refinance Marc Schillinger successfully placed the rate & term refinance of a 14 unit apartment building in Santa Barbara, California. As the borrower's current debt was facing a balloon date, the borrower required a non-recourse, interest only loan to pay off his current mortgage. Sensitive to interest rate fluctuations, the borrower also required an early rate lock. The loan was rate-locked for 90 days at application and is interest only for five years before rolling into a 30 year amortization schedule. | | | Rate: 5.30% | | Term: 5 years | | Amort: Interest Only | | LTV: 63% | | Non-recourse | | Lender Fee: Par | | Broker: Marc Schillinger | | | |  | | | | Life Company Bridge & Perm Debt A national Life Insurance lender will fund transition properties down to a 1.10 dcr on an interest only basis. The three year non-recourse loan will advance to 75% of current value, fixed from 5.25%. Longer permanent term loans are also available with 5, 7 and 10 year call dates. Transactions will range from $20,000,000 to $50,000,000 and may include special purpose products including hospitality, high-end health clubs and self-storage in addition to the four major uses. | | Transaction Size: $20,000,000 - $50,000,000 | | Rate: Floored at 5.25% | | Loan Term: 3, 5, 7, & 10 years | | Amort: Interest Only or 30 years | | Max LTV: 75% | | Non-recourse | | Geography: Nationwide | | | | | Hot Money | Small Mezzanine and Preferred Equity to 90% of Cost Most Mezz Funds target minimum investments of $5,000,000 for assets requiring total capitalizations of $20,000,000 and more. A Southern California based Mezzanine lender is filling the need for Mezz and Pref Equity allocations from $2,000,000 to $5,000,000 for acquisitions as small as $10,000,000. This capital provider will advance to 90% of purchase price. Only stabilized assets will qualify for the three year term loan. A current pay of 8% to 10% is required for an all-in 15% to 17% yield. Secondary markets will be considered for strong borrowers. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, asset sales or advisory services, please contact your GSP representative or Todd August, Chief Operating Officer at (310) 867-2995 or TAugust@GSPartners.com. | | | GSP in Print | GSP Vice President Nick Silbergeld was recently published in the May/June issue of Commercial Investment Real Estate Magazine. As an experienced industry pro of Agency financing, Nick's review of the Treasury Department's White Paper on Fannie, Freddie and FHA provides an alternative solution for reforming the mortgage markets. An on-line copy of Mr. Silbergeld's article may be found here. | | | Pascale's Perspective | Treasury yields remain low as inflation threats are rapidly diminishing with the sharp drop in commodity prices. Some nervousness about Europe and the impending end of the Treasury purchases (QE2) are adding to the perception that the recovery is "muted" and less strong than anticipated a few months ago. It all dovetails together as a weaker economy leads to less commodity demand and less inflation. This all gives investors more reason to buy Treasury Bonds. Debt Ceiling: Lots of posturing but no deal yet, as the August 2nd deadline looms. As of now, there is no panic selling or crisis as the market seems to be confident some kind of deal will be struck. CMBS Loan Rates: Spreads have narrowed slightly and stabilized with much less volatility than recent months. The low treasury yields and tight spreads with multiple originators competing make this an ideal time to lock in fixed rate Life Company or CMBS rates. Stay Tuned... David R. Pascale, Jr. | | | Join Us On LinkedIn | George Smith Partners is now on LinkedIn. Click here to join the George Smith Partners Group and gain access to current commercial real estate topics and conversation. | |
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