| | | | | Transaction of the Week |  | |  | | Transaction Description: | | $92,000,000 Refinance of Multifamily Apartment Complex in Los Angeles GSP arranged the senior secured and preferred equity financing for a 566 unit apartment complex. The proceeds were used to refinance a maturing loan. |
Challenge: With mixed short and medium term rate outlooks, the client was considering both a floating and fixed rate execution. GSP also had to coordinate communication between the senior lender and the preferred equity investor while working under a tight timeframe due to a maturing construction loan. |
Solution: GSP provided the borrower with extensive analysis calculating rate sensitivities when comparing a floating rate execution to several potential fixed rate options. The client used this analysis when considering rate and duration risk appetite, and ultimately chose to lock in rate exposure. GSP maintained constant communication throughout the process and facilitated negotiations between the senior and subordinate lender, allowing for a simultaneous funding. | | | Senior Debt Amount: $79,000,000 Rate: 3.75% Term: 5 Years Amort: Interest Only LTV: 63% DSCR: 2.11 Prepayment: Defeasance Non-Recourse Lender Fee: 0.25% Preferred Equity Amount: $13,000,000 Rate: 10% Pay Rate: 8% Term: 5 Years Amort: Interest Only LTV: 73% DSCR: 1.50 Prepayment: Stepdown Non-Recourse Lender Fee: 0.50% | | | |  | | | | Public REIT Bridge Lender to $25,000,000 A public mortgage REIT is actively originating bridge financing between $7,000,000 and $25,000,000 to 80% of cost. This national lender is active in secondary markets, and prefers multifamily, but will consider office, retail, industrial and hospitality with a major flag. Student housing and broken condos converted to rentals are also considered. Some cash flow is required but the lender will fund a debt service reserve in addition to capital upgrades. A 2 year term is offered with three - 1 year extensions. This capital provider will also provide mezzanine debt behind Fannie or their own senior debt up to 90% of total capitalization. | | Transaction Size: $7,000,000-$25,000,000 | | Loan Term: 2 Year Plus Extensions | | Max LTC: 80% Senior + Mezz | | Non-recourse | | Geography: National | | | | | Hot Money | Regional Bank from $1,000,000 to $15,000,000 A regional private bank is offering aggressive pricing for on-book multifamily and commercial real estate transactions. Commercial assets include retail and office properties. Transactions range from $1,000,000 to $15,000,000, full recourse, 3.9% fixed for five years before rolling into a floating rate in the low 200's over 12-MAT for the balance of the loan term. Loans are sized to 75% of value down to break-even coverage on an exceptional basis. Geographic markets include California, New York City, and Boston. This capital provider will consider additional markets nationally for existing relationships. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing or advisory services, please contact your GSP representative or Todd August, Chief Operating Officer at (310) 867-2995 or TAugust@GSPartners.com. | | | Come Grow With Us | George Smith Partners is expanding its team of top-notch mortgage brokers/originators. We offer highly competitive compensation and an excellent environment in which to work, learn and be supported. We invite you to consider a career with George Smith Partners. Please direct confidential inquiries to Todd August, Chief Operating Officer, at (310) 897-2995. | | | Pascale's Perspective | Europe Roils Markets: "Greece contagion" worries are front and center this week as Greek debt was downgraded to CCC or junk status. The 10 year Greek treasury yield is over 17%. France's three largest banks were put on negative watch based on their exposure to Greek debt. Social unrest in Athens and possible turnover of the government are adding to market anxiety. All eyes are on the ECB, France, Germany and the IMF to cobble together yet another bailout or a debt restructure. The unknown consequences of a restructure is what worries markets. Treasury yields dropped over 10 bps today on the flight to quality and risk spreads are widening. CMBS pricing is still "soft" as originators are trying to gauge where the market will settle......Stay tuned.....David Pascale, Jr. | |
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