For Real Estate Professionals Seeking a Market Edge
Federal Regulators Stand by with Additional Capital to Shore-Up U.S. Banking System
On Monday, the U.S. Treasury issued a statement that “The U.S. government stands firmly behind the banking system during this period of financial strain, to ensure that it will be able to perform its key function of providing credit to households and businesses.” The Treasury went on to say that it is open to the establishment of an institution converting preferred stock into [convertible] preferred shares, and later into common equity; as needed to boost banks' capital structure.
Under the proposed effort known as the Capital Assistance Program, regulators said banks will be able to access government capital in the form of mandatory convertible preferred shares, if it is determined that the banks require an additional temporary capital reserve.
While some conversions may not involve new funds, they could help the banks by increasing the amount of tangible common equity that they hold, providing a more effective cushion for write-downs. The program calls for regulators to conduct 'stress tests' on major banks in an effort to evaluate their capital needs should the economy perform more poorly than expected.
We will keep you posted…
$5.5 Million Line of Credit
Penstar recently obtained a loan application for a $5.5 million secured line of credit against 2 fully owned and occupied industrial properties located Southern California. Both assets are currently Free & Clear. The lender priced the loan at Prime plus a quarter with a 4.75% floor on an interest-only basis. The line, with a one year term, renews annually. The borrower intends to use the proceeds for the acquisition of value-added properties over the next 12 months. To discuss, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.
Apartment Loans from $500,000 to $3,000,000
Penstar is currently working with a bank that is originating permanent, refinance, and acquisition loans on apartments located in California, Oregon, and Washington. The lender will fund up to 65% loan to value, with a 5-year term at a fixed interest rate of 6.0%, a 7-year term fixed at 6.8%, and a 15-year loan term fixed at 7.0%. All loans are amortized over 30 years. 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.
Bull and Bear Market Definitions Bear Market: A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no love. |
30
Day Libor |
10-Year
Treasury |
Prime |
0.50% |
2.98% |
3.25% |
Penstar Realty Advisors can be reached at (818) 883-8600 or at our offices located at:
21700 Oxnard Street, Suite 1870, Woodland Hills, CA 91367