| Transaction of the Week |  | |  | | Transaction Description: | | $10,650,000 Permanent Financing for 2 Limited Service Hotels in Midewestern Secondary Markets. GSP successfully placed financing on 2 hotels for a Sponsor emerging from a bankruptcy restructuring. The loans were timed to close simultaneously with local financing for some smaller assets as the Sponsor's entire portfolio was involved in the restructure. Property specs: (1) 80 room limited service hotel, built in 2007. Amenities include indoor pool, fitness center, spectacular lake views. (2) 100 room limited service hotel built in 1992 with major renovation in 2002 (including adding another floor of rooms). This hotel was the international flagship hotel for a major brand. GSP arranged financing with a CMBS lender who became comfortable with the narrative of the restructuring at this leverage. Sponsor, hotel sector and the submarket were hit hard by the credit crisis. The Lender increased the loan amount during the application process in order to make the structure work. | | | | |  | | | | One-Stop Capital Stack Debt/Mezz-Debt Funding to 85% LTV Fixed rate and floating rate funding to 85% LTV for stabilized multifamily; 75% for commercial in a debt + mezz structure from a single capital provider. This mezz lender will fund the entire cap-stack from their balance sheet, then syndicate the senior note to either a CMBS originator or a regional bank post-close for an all-in coupon typically in the low 5% range for 10 year money. Transactions may be as short as three years for flexible prepayment options. Fundings will range from $15,000,000 to $50,000,000 and are non-recourse beyond standard carve-outs. This fund has executed with 17 separate Wall Street and Portfolio lenders. Cash flow at close must support a 1.10 dcr or better. | | | | Hot Money | Mezz Debt from $3,000,000 GSP identified a private New York Hedge Fund with discretionary capital for mezzanine debt on performing and slightly under performing assets. Transactions funded from $3,000,000 and up to an 80% LTV and 1.10 actual dcr. No major rehab will be considered but some light "value-add" will be underwritten. This fund has the ability to fund behind select existing fixed rate transactions, mitigating the requirement to unwind the senior debt to gain access to capital. Loans terms will be co-terminus with the senior note. Yields start at 13% for core product types in addition to more specialized assets including mobile home parks and data centers. Secondary and tertiary markets will also be considered for financing. | | | 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 Welcome's Their Newest Team Member | GSPs production team is actively producing as Monica and Jonathan Lee welcomed Jackson Adrian Lee earlier this week. At 6 lbs, 12 ounces & 20 inches, young Jackson is anxious to follow in his fathers' footsteps and start structuring commercial real estate transactions. All three Lee's are in great health and we here at GSP are ecstatic for their new addition. | | | Credit Markets breathed a sigh of relief as the German's high court approved the existing European bailout structures. A reversal could have sent markets reeling with uncertainty. Now that structure will be tested as to the protocols of Spain's participation. Note that the reason that markets have been concerned about Greece (who's economy is relatively small) is that Greece's failure could affect the ability of Spain and Italy to restructure their debt in an orderly fashion. Fed: Last week's disappointing employment report has raised expectations for another round of Fed bond buying. Today the 10 year treasury spiked about 8 basis points to 1.76%, mostly due to selling as a reaction to the good news from Germany. Tomorrow should be interesting, Fed announcement at about 11am pacific time. CMBS: We are in a typical September pattern, lots of big pools coming to market in the next few weeks. The market has been relatively stable and spreads have tightened, but the question is "how deep is the market?" ….Maybe the first few pools will trade tightly, but what about the next ones? That will demonstrate the scope of the demand and set the paramaters for new loans going into year end. …stay tuned… David R. Pascale, Jr. | |
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