| Transactions of the Week |  | |  | | Transaction Description: | | $3,010,000 Cash-Out Refinance of a 96 Unit Apartment Community in Oakland, California Bryan Shaffer successfully placed the $3,010,000 refinance of a 96-unit apartment community in Oakland's Central Business District. The current owner recently acquired and renovated the formerly foreclosed property. The asset was the process of stabilization at funding. Project improvements netted a positive impact to the overall neighborhood and is an example of how proper management can improve an entire market. The 7-year term loan is priced at 5.65% fixed with 30 year amortization and a step-down pre-payment penalty. |
Challenge: Prior to engaging GSP, the Borrower approached several Fannie Mae DUS lenders who rejected the project. The Borrower also required a return on his investment given the ample value created through the asset reposition. |
Solution: GSP identified the community redevelopment institution best positioned to finance this asset and demonstrated the significant contribution of the project to this Oakland district. The lender, an affordable multi-family housing firm, offers unique loan programs that allows for the full stabilization of projects at long term market rates in fulfilling their mission statement. GSP was able to secure a market rate loan with cash-out in excess of 40% of the prior pay-off. | | | Rate: 5.65% Fixed for 7 Years | | Term: 7 Years | | Amort: 30 Years | | LTV: 70% | | Prepayment: 3-2-1 open | | Recourse | | Lender Fee: 1.0% | | Broker: Bryan Shaffer | | | |  | | Transaction Description: | | $1,450,000 Cash-Out Mobile Home Park Refinance Shahin Yazdi arranged the cash-out refinance of an 80 unit Mobile Home Park located in the Western United States. The Borrower had a maturing loan that the existing lender opted not to renew. Mr. Yazdi only had 40 days to identify an institutional lender and fund the loan before the current loan ballooned. The property was 10% vacant at the time of funding. Demonstrated historical collections were used to make the lender comfortable with the asset performance and Mr. Yazdi leveraged his relationships with the institutional lending community to rush the closing timeframe. | | | Rate: 4.72% | | Term: 10 Years | | Amort: 25 Years | | Non-recourse | | Lender Fee: Par | | Broker: Shahin Yazdi | | | |  | | | | Life Company Debt from $1,000,000. GSP is working directly with a small Life Insurance Company currently funding permanent loans on stabilized assets from the Dakotas to Texas and West to the Pacific Coast. This capital source will finance the four primary product types from $1,000,000 to $6,000,000 for three, five or 10 year terms, amortized over 30 years. 75% acquisition financing is available, 70% for refinances, both limited by a 1.30 DCR. A step-down prepayment is available for three and five year terms. Ten year loans carry yield-maintenance pre-payment penalties. | | | | Hot Money | Joint Venture Build-To-Suit Construction Equity from $500,000 GSP has identified a Joint Venture construction investor providing equity capital for ground-up build-to-suits pre-leased to credit and non-credit users nationwide. Typical product types are franchised chain restaurants and medical uses including rehab "hospitals". Equity contributions can be as small as $500,000, up to $2,000,000 per project. One-off transactions are considered although portfolios will be preferred. A 20%+ IRR is required with a 10% developer co-invest. Timing is usually 70 days from introduction to funding with an asset sale upon completion as the exit required to reach the IRR threshold. | | | 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. | | | In The Press | George Smith Partners Managing Director David Rifkind penned an article featured in the December issue of CCIM Magazine on the "Signposts to Recovery". The entire article is available on-line and may be found here. | | | Pascale's Perspective | Europe "Endgame"…… Real Estate Spreads Stabilize… Another weekend "huge summit" with the usual big expectations. Optimism is due to: (1) "Two bazookas are better than one," the existing European Stability Mechanism fund will continue running while a new fund starts in 2012, markets are cheering the development; (2) The alternative to full cooperation is facing the end of the Euro; (3) New "technocrat" leaders focused on problem solving have replaced Italian President Berlasconi and ECB head Jean Trichet; (4) New cooperative agreements/treaties call for coordinated budget control among the nations; (5) New liquidity as the European stability fund started issuing 3, 6 and 12 month dated bonds, investors are buying them at low rates. However, Germany (who is calling the shots) is still resisting "total integration", ie a Euro bond and an ECB authorized to print money via fiat like the US Fed. Look for another interest rate cut by the ECB tomorrow…..Here in the US, CMBS markets have stabilized and are less volatile. In contrast to June-October of this year, CMBS traders/originators are not overreacting to headlines and perceived "disaster" from Europe, etc. The conundrum was "why does a loan coupon on a shopping center in West LA shoot up after the Slovakian parliament votes no on a Greek bailout?" We understand that everything is connected in the modern financial world, but hopefully the markets here are becoming less jittery. ...stay tuned... David R. Pascale, Jr. | |
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