| Transaction of the Week |  | |  | | Transaction Description: | | $4,100,000 Acquisition/Reposition Joint Venture Equity for Distressed Retail GSP arranged the $4,100,000 joint venture equity investment for a portfolio acquisition of 40,000 square feet of distressed retail in Phoenix, Arizona. The sponsor, a repeat GSP client, is a sophisticated investor/developer focused on retail investments with an expert in-house leasing staff. The assets acquired are under-occupied non-credit retail buildings, but well-located and shadow-anchored. The sponsor will accelerate stabilization by offering competitive rents (premised on a reduced cost basis) and by capitalizing tenant improvements and leasing commissions. The transaction is the first of a programmatic joint venture. The investor contributed 90% of the total project capitalization, as the assets will remain unlevered until leasing velocity is demonstrated. Key terms included a 10% pari passu preferred return, a waterfall promote structure thereafter, and management and leasing fees for the sponsor. | | | | |  | | GSP Welcomes Bryan Shaffer and Malcolm Davies | George Smith Partners is pleased to announce two industry veterans, Bryan Shaffer and Malcolm Davies, have joined GSP as Senior Vice President and Vice President, respectively. "We are starting to see an increase in our business as the capital market recovers," said David Rifkind, Principal and Managing Director of GSP. "New and returning investors are flooding the market looking for financing. Through our expertise, as well as our addition of highly skilled newcomers like Malcolm and Bryan, we are well positioned to accommodate the increased demand. Davies and Shaffer both bring extensive backgrounds in finance, and experience in coordinating financing across the country and worldwide." Shaffer brings more than 20 years of commercial real estate experience with over $4 billion in transactions completed throughout his career. Previously serving at Mitsui Real Estate Sales, USA, Shaffer financed, repositioned, and sold more than 85 properties valued at $1.5 billion. He is the founder of the International Real Estate Trade Organization, and is actively involved in many other industry associations and philanthropy groups. "Working for a company with George Smith Partners' prestigious reputation is a wonderful opportunity," said Shaffer. "I will be focused on delivering the type of financing solutions GSP is known for, focusing on arranging structured financing for both multifamily and commercial properties across the nation." Davies is an experienced developer, investor, and capital provider with more than 12 years of real estate investment experience. He previously served as CEO of CANVAZ Companies and Principal of Davies Investments, Inc., where he acquired, managed, and sold real estate projects in excess of $275 million. "I am looking forward to bringing my real estate acquisition and investment experience to George Smith Partners and its clients," said Davies. "GSP's strong industry relationships with capital providers will allow me to provide clients with the best and most effective capital options available." | | | | | 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. | | Transaction Size: $1,000,000 - $15,000,000 | | Rate: Five year fixed - 3.9% | | Loan Term: 10 year | | Max LTV: 75% | | Property Types: Multifamily, Retail & Office | | Prepayment: 1.00% for 4 years | | Fees: 0.50% | | Geography: California/New York/Boston | | | | | 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. | | | Speakers Corner | Founding Partner Steve Bram will be speaking this Friday on the CMBS market at Greenberg Traurig, LLP's GTEN Conference in Santa Monica. The invitation-only gathering includes senior level executives from international private equity, venture capital, and banks, with business interests including real estate and financial restructuring. | | | Pascale's Perspective | Stuck in Neutral???? Flat economic reports and the Fed's "wait and see, things will get better" stance this week has markets in a static mood. No significant new policy measures are being considered and QE2 is ending this month. Treasury yields have now settled in at 2011 lows. The 10 year has traded between 2.90%-3.05% for the past couple weeks. One recent column called the economy "as good as it gets" aka the "new normal" may mean flat growth and high unemployment. CMBS: CMBS spreads widened out 30 basis points today as a pool was priced by a major issuer. Why? Spreads are widening on 1) Continued concerns as Europe attempts to bail out governments, 2) Anorexic US Economic conditions and climbing unemployment figures, 3) OPECs surprise reversal on increasing supply, causing crude to jump $1.25 in early morning trading, 4) Supply issues as the US Gov't dumped huge amounts of high-yielding AIG sub-prime mortgages on the open market. CMBS spreads are still attractive and tight yielding SWAPs are low enough to price new loans in the mid-5% range for a 10 year fixed rate term. Stay tuned... David R. Pascale, Jr.. | |
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