Eric Better

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		Weekly Financing News from George Smith Partners
		Volume XV \| No. 10 \| March 29, 2007
		Eric Better, Vice President of Originations

KEY RATE INDICES
Prime Rate	8.25%	1 Month LIBOR	5.32%	5 Yr US Treasury	4.52%	5 Yr Swaps	4.98%
12-MAT	5.01%	3 Month LIBOR	5.35%	10 Yr US Treasury	4.63%	10 Yr Swaps	5.16%
11th Dist COFI	4.39%	6 Month LIBOR	5.32%	30 Yr US Treasury	4.83%

Transactions of the Week

Transaction Description:

$19,550,000 (92% LTV) Five Year Fixed Rate Bridge Non-Recourse Loan for the Acquisition of a 120,014 Sq. Ft. Office Building in Englewood, Colorado. GSP arranged the fixed rate bridge financing for a 120,014 sq. ft. office building in the Denver sub-market of Englewood.

Challenge: The Property is currently 76% leased, approximately 55% occupied and expects significant lease roll in 2008. The largest tenant does not occupy 50% of its space and its lease expires in September 2008. Cash flow from the property supports a 1.13 interest only debt coverage at closing prior to any tenant lease expirations.

Solution: GSP structured a $2,870,000 earn-out reserve to fund tenant improvement and leasing commissions over the stabilization period.

Rate: 5 Yr T + 2.10%

Term: 5 Yrs

Amort: Interest Only

DCR: 1.13 I/O at funding

Prepayment: 2 yr lock-out, then open to prepayment at par

Non-recourse

Lender Fee: 0.20%

Key Players: Gary E. Mozer, Larry Wilemon, David Bierman

Transaction Description:

$18,980,755 (94% of Total Project Cost) Non-Recourse Acquisition Financing for 472 Unit Apartment Community in New Mexico. The community was built in 1986 and was 93% occupied when we went into application.

Challenge: 1. The property has an existing low-leverage CMBS loan in place that is not yet open to prepayment and that does not allow secondary financing. GSP arranged this preferred equity investment in order to facilitate the acquisition. 2. The property was capitalized to include rehab funds in excess of $12,000 per door, an interest reserve, and estimated defeasance costs once the lockout burns off. Sponsor sought maximum leverage, non-recourse capitalization. 3. This was the first transaction in a secondary/tertiary market for the sponsor as well as the preferred equity provider.

Rate: 30 Day LIBOR + 5.5%

Term: 2 yrs

Amort: Interest Only

Non-recourse

Lender Fee: 2%

Completion Guarantee

Key Players: Gary E. Mozer, Larry Wilemon, Lee Norman

Hot Money

Nationwide Bridge Lender, up to 90% LTC, Quick Close, Non-Recourse Funding Main Property Types, Including Hotels. Can close in three weeks. Can also do bridge-mezz. GSP has closed five transactions with this lender in the last six months, totaling $120,000,000.

HIGHLIGHTS

Transaction Size: $10,000,000+

Rate: LIBOR based

Loan Term: 1-3 yrs

Amort: Mostly Interest Only

Max LTV: 80% proforma stabilized

Max LTC: 90%

Property Types: Office, retail, industrial, multifamily and hotels

Prepayment: 12 mo lock-out

Fees: 1%

Geography: Nationwide

Non-Recourse, except standard carve-outs

Interest Rate/CMBS Update

Treasury rates have drifted upwards as the flight to quality due to subprime market concerns has waned and traders are back to concentrating on economic reports. This week’s reports are close to expectations, but nothing to justify the price supports needed for rates in the 4.55 range of the past few weeks. The 10 Year T is at 4.61%. CMBS: Although Swaps and AAA spreads have stabilized, BBB spreads continue to widen more than any other class. The BBB bonds are the “first loss” of the publicly traded bonds. The lower classes are privately purchased with a coupon. Some I-banks are speculating that the huge supply of new CMBS issues is a factor in the widening (supply/demand dynamics). Stay tuned… (David R. Pascale, Jr.)

Speakers Corner

Gary M. Tenzer, GSP Principal/Senior Director, will participate in a panel discussion on Finance and Investment at the Fifth Annual Casden Multifamily Conference: California Strategies for Mixed Use Development, sponsored by the USC Lusk Center. Other panelists include:

· Burland East, Silver Portcal Capital

· Laurie Lustig-Bowers, CB Richard Ellis

· Mark Weinstein, MJW Investments

· Lewis Feldman, Goodwin Proctor, moderating

The conference will be at the Disney Music Center in downtown Los Angeles on Wednesday, April 4, 2007. For more information, click here.

Andrew Levant, GSP Vice President, and Jeff Palmer, PMI Properties, will co-moderate a panel discussion entitled “In Search of Yield in the Final Frontier” at The Real Estate Investment Advisory Council’s Annual Deal Making Conference. The event will be on Thursday, April 12th, 5:30-9:00 pm, at The Olympic Collection, Regency Ballroom. Panelists include:

· Dan Beany, Managing Director, Shamrock Capital Advisors

· Andy Sands, Partner, Concert Realty Partners

· Greg Galusha, Principal, Managing Director, Pacific Coast Capital Partners

· Mark Macedo, Managing Director, Hanover Financial

· Jeffrey Rosen, Principal, CIM Group

For more information, click here.

Join Us As We Reach New Heights

George Smith Partners is in the midst of a record-setting period of growth. As we continue to reach new heights, we are selectively seeking several seasoned and successful financial professionals to join our team. Please direct confidential inquires to Todd August, Chief Operating Officer, at (310) 557-8336, Ext. 125.

©2007 George Smith Partners, Inc. FINfacts is an ePublication of George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.

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