| Transactions of the Week | 
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| | Transaction Description: | | $10,200,000 Permanent Financing on a 92-Unit Multifamily Los Angeles Property GSP successfully obtained a $10,200,000 cash-out agency loan within 45 days of closing the original bridge loan. The debt was secured by a stable infill 92-unit multifamily property in Los Angeles. GSP and the sponsor worked closely with the lender to resolve hurdles related to an estate lien, several un-permitted units, and the reconciliation of historical operating statements. | |
Challenge: The borrower required a cash-out bridge refinance in order to procure proceeds for the acquisition of an unrelated asset with a pending close date. GSP then worked with the sponsor to resolve underwriting issues and pushed the closing of the agency perm loan to minimize interest paid on the bridge loan.
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Solution: GSP capitalized on its' strong network of lender relationships to secure an agency loan that maximized proceeds and waived the exit fee on the bridge loan. GSP worked with the lender to leverage the existing third party reports to ensure a timely closing with minimal costs.
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| | Transaction Description: | | $7,200,000 Permanent Acquistion Financing for a Multifamily Complex in a Secondary Market. GSP successfully arranged a 10 year, fixed rate loan to acquire a 192-unit apartment complex outside of Greenville, SC. While the property was stabilized at close of escrow, an increase in the rental supply over the last three years caused a significant drop in occupancy, forcing the property into foreclosure. The lack of stabilized historical operating data made it challenging for lenders to underwrite the cash flow. GSP indentified a lender that was not only comfortable with the secondary location of the asset, but was also able to underwrite the trailing three months of actual collections in order to maximize the loan amount. | | | Rate: 5.87% | | Term: 10 Years | | Amort: 30 Years | | LTV: 65% | | Prepayment: Yield Maintenance | | Non-recourse | | Brokers: Steve Bram, Allison Higgins | | | | | 
| | | | Southern California Portfolio Lender Funds @ sub-5% Fixed A Southern California relationship lender is seeking to expand their commercial loan portfolio to high net worth borrowers at very competitive rates. They are willing to advance to 70% of value on core assets with rates as low as 4.75% fixed for five years. The shorter term fixed rates are not swapped, allowing for a declining pre-payment penalty. Assets must be stabilized and the borrower must be Southern California based. | | Transaction Size: $1,000,000 - $10,000,000 | | Rate: 4.75% fixed for 5 years | | Loan Term: 5, 7 or 10 Years | | Max LTV: 70% | | Min DCR: 1.20 | | Recourse | | Property Types: Core Properties | | Prepayment: Declining | | Fees: 0.5% - 1.0% | | Geography: National for SoCal borrowers | | | |
| | Hot Money | Multifamily Non-Recourse Bridge to Perm Debt A national capital provider has launched a non-recourse turn-around bridge program for multifamily assets including manufactured and student housing. Quick close refinance or purchase DPOs are also considered. Unlike traditional Agency Gateway bridge product, this program will fund major capital improvements for an eventual Fannie or Freddie take-out. Cash flow must be in place at funding although an interest reserve may be included to 75% of total capitalization. The two year LIBOR based floater has no prepayment penalty and the lender will waive agency origination fees if rolled into their perm upon asset stabilization. Transactions from $5,000,000 to $75,000,000 will be underwritten to 75% of total cost at 5% - 7%, on an interest only basis. | |
| | 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. | |
| | Pascale's Perspective | Bernanke Press Conference Aftermath... Treasuries Rally..... Debt Ceiling Deal? The Fed Chief's extraordinary press conference last week did not roil markets as Bernanke did not say anything unexpected, which is what markets always prefer. It seems that the $600 billion of Treasury & MBS purchases known as QE2 will be completed and the maturing securities will be "rolled over" so the end is not too sudden. Treasuries rallied on this week's lower than expected job numbers which indicate the fragility of the recovery. Dollar rally? A rally may be forthcoming in the US dollar and dollar denominated instruments as (1) Fed starts to contract its balance sheet and (2) the perception that the US "turned the tide" in the war on terror over the weekend may enhance the dollar's standing as a reserve currency. Investor's continue to purchase Treasuries even as the US approaches the debt ceiling. Maybe investors have faith that after all the political blustering on both sides, a deal may be in the works involving spending caps, etc. Stay tuned.... David R. Pascale, Jr. | |
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