Star News

In a recent interview, Warren Buffett indicated that we are already in the midst of a recession by “common sense definition”. Mr. Buffett restated his view that over the long-run, the U.S. economy will do fine. This week, the price of oil reached another milestone at an inflation adjusted record high of over $106 per barrel in the overnight trading sessions. Buffet sees the price continuing to rise with growing demand and a finite supply. This will lead to a weaker U.S. dollar due in part to the trade deficit.

Worldwide losses from the sub-prime mortgage catastrophe have reached an estimated $600 billion. Fed Chief Bernanke announced that we should expect to see several small bank failures in the banking industry due to over-leveraged consumers under financial pressure. Residential foreclosures are at an all time high. Gold, copper, and wheat continue to rise as the American dollar has weakened. It is truly the perfect storm in the financial world. Historically, there has never been a confluence of multiple events impacting the world economy at the same time. There are two sides to the trade and those who sold last year may have received an inflated sale price while those currently taking advantage of bank owned real estate, appear to be buying at a discount today. We will keep you posted…

Penstar is working with a portfolio lender who has slashed their interest rates on retail, office, industrial, and apartment properties leveraged at or below 60% LTV located in the Western United States. Current rates on a 5-year fixed with 30 year amortization are 5.75%. Prepayment is 3,2,1,1. On 7-year transactions; the current coupon is 5.89% with a prepayment of 5, 5, 4, 3, 2, 1. On a 10-year fixed, today’s rate is 6.25% with a prepayment of 5, 4, 3, 2, 1, 1, 1. Loans considered range from $1,000,000 to $15,000,000 with no estoppels or reserves. To discuss, please contact David Stepanchak at (818) 883-9611 or DStep@PenstarAdvisors.com.

Penstar recently received a loan application on an office building located in the Northeastern United States. The property, totaling 145,000 square feet, is occupied by a private company in business since 1931. The tenant signed a market lease for an original term of 12 years with two 5-year market rate options. The lender financed 83% loan to value, a five-year term, interest-only at a fixed rate of 6.6%. To discuss, please contact Gerald Price at (818) 883-9629 or Price@PenstarAdvisors.com.

Helpful Humor

We at Penstar understand the challenges of the commercial real estate business. The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work week. The anecdotes may not all be real estate themed but we hope you will enjoy them just the same.

“Psychiatrists Meeting”

As a group of four psychiatrists were leaving a convention together, one looked at the other three and declared: “people are always coming to us with their guilt and fears, but we have no one that we can go to when we have problems.” The others agreed.

Then another said, “Since we are all professionals, why don’t we take some time right now to hear each other out?” The other three agreed.

The first spoke again, confessing “I have an uncontrollable desire to assault some of my patients.”

The second psychiatrist said, “I love expensive things and so I find ways to cheat my patients out of their money whenever I can in order to buy the things I want.”

The third followed with, “I’m involved with selling drugs and often get my patients to sell them for me.”

The fourth psychiatrist then confessed, “Although I know I am required to maintain confidentiality, no matter how hard I try, I can’t keep a secret…”