| Transactions of the Week |  | |  | | Transaction Description: | | $5,355,000 Cash Out Perm Loan for a Troubled Asset GSP arranged the 10 year permanent loan for a newly constructed, mixed-use apartment & retail property in Los Angeles. The troubled asset was originally constructed as "For-Sale" condos in 2008, then converted to rental units upon certificate of occupancy. At construction completion, the FDIC seized the construction lender and transferred the note to a new bank. |
Challenge: The new lender extended the balloon date with a short-term mini-perm, but placed the loan in Special Services adding pressure on the Sponsor to be paid off. The rentals, built to condo specs, commanded higher rents, above the baseline for residential units in the area. Over 20% of the property's income is derived from retail space; spurring lenders to underwrite the leases at below contracted rates. The Sponsorship endured multiple liquidity hits and no longer met lender's baseline underwriting. |
Solution: GSP was able to use its market knowledge to increase the underwriter's range for multifamily comps to confirm collections. GSP demonstrated the retail tenants' dedication to this location and support their occupancy at better-than-market terms. As the subject was expertly constructed, fully occupied and managed with the utmost in "pride of ownership", GSP was able to attract a lender who understood all of these challenges. The building appraised as underwritten and the former lender was paid in full. | | | Amount: $5,355,000
Rate: 5.37%
Fixed: Yes
Term: 10 Years
Amort: 30 Years
LTV: 75%
DSCR: 1.25
Non-Recourse
Lender Fee: Par
Brokers: Steve Bram, Jonathan Lee
| | | |  | | | | 2.59% Floating Rate to Break-Even Debt Coverage for Multifamily A national capital provider is funding multifamily floating rate loans as low as 2.59% to 80% of value and 1.0 DCR for transactions as small as $3,000,000. There is no maximum loan amount and smaller assets will be considered on a case-by-case basis. This non-recourse loan floats over one-month LIBOR and carries a lifetime cap fixed at closing – currently 6.0%. The loan is locked for one year then requires a 1.0% prepayment penalty. The seven year term is amortized over 30 years with lower leveraged loans qualifying for interest only. The loan may be converted to a fixed rate in years 2 through 5 with no prepayment costs and minimal re-underwriting. | | | | Hot Money | Fund Manager $3,000,000 to $35,000,000 A national fund manager is actively originating bridge financing up to 85% of total cost. This capital provider will consider all asset types, including broken condos, and is funding both cash flowing and non-cash flowing assets. The lender will also fund assets that may require significant rehabilitation or reposition construction, renovation, and/or lease-up. No ground-up construction will be considered at this time. The senior secured, non-recourse loans are offered on 1 to 3 year terms, and generally close in 30 days. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com. | | | GSP is Hiring! | George Smith Partners is seeking motivated individuals to fill several analytical support positions. Qualified candidates may submit their cover letter and resume to Careers@GSPartners.com. The ideal candidate will possess: 2 or more years experience analyzing, packaging and placing commercial real estate loans, current knowledge of lender and investor underwriting criteria, significant experience in creating debt/equity offering packages, strong writing skills, proficiency with EXCEL and a working knowledge of ARGUS. The applicant must carry an extremely positive attitude and ability to work as part of a high quality, service-obsessed team. An MBA or advanced degree is a plus. Candidates will be offered the opportunity to join a highly experienced and renowned production team, working in a fast paced and diverse CRE financing environment helping to analyze, market and close a wide variety of commercial real estate deals on a national level. The successful candidate will interact with our clients and the highest levels of the lending and investment community as part of Team GSP – one of the most dynamic and stories real estate investment banking firms in the US. | | | Pascale's Perspective | Debt Ceiling Drama…..Italy Contagion……China and ECB Raise Rates while Bernanke Talks Stimulus……CMBS Market "Settles" for Now……..All eyes on the negotiations in Washington to avoid a US debt default. McConnell's "backup plan" is thought to be a signal to markets that "something will get done, don't worry." Nevertheless, Moody's warned of a downgrade today. Any incremental downgrade will raise rates across the board (CRE, home loans, credit cards, small business, etc). Fear factor is back as Italy, one of Europe's larger economies and therefore thought to be too big to bail out, is on the watch list with rising borrowing costs. It seems that Greece may need to strategically default in order to "save" Italy. Meanwhile, major central banks pushing and pulling in different directions. China and European Central Bank both raised rates in the last week to ward off inflation and overheating. Meanwhile, Bernanke floated "QE3" to congress today and markets rallied. Rates: The 10 year T yield has dropped 20 bps in the last two weeks on flight to quality and implied faith in a debt ceiling deal. CMBS volatility has abated (after some widening) with the average spread over Swap about 2.50% on a 10 year loan. All in rate approximately 5.60%......stay tuned…. David R. Pascale, Jr. | | | Share Your Opinion on LinkedIn | What will be the U.S. debt ceiling resolution? Vote in our poll, and voice your reasoning at: http://linkd.in/pC1aey | |
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