For Real Estate Professionals Seeking a Market Edge
California’s March Payables
According to an official inside California Governor Schwarzenegger's budget office, the world's 4th largest economy is considering delaying remitting payment of various invoices due in March to avoid dissolving much of its customary cushion of cash. By the end of the third fiscal quarter, California's cash accounts will decline to an estimated $1.7 billion; or, $800,000 below the minimum balance customarily maintained by the state budget office.
A decline in available cash will not hinder California's ability to repay an estimated $8.8 billion of short-term notes that are due in May and June, as April and May tax revenues are expected to cover repayment of the notes. California's coffers were drained of cash in 2009 in the midst of a $24 billion budget gap. The state issued taxpayers a total of $2.6 billion in warrants in 2009 to conserve existing cash to cover expenses such as interest on bonds.
California holds the country&39;s largest population but carries the poorest credit rating of any state. The state is facing a budget gap of $6.6 billion in the midst of the current fiscal year; with a gap of $13.3 billion at the onset of the new fiscal period commencing on July 1, 2010. In his final term as Governor, Schwarzenegger officially declared a fiscal emergency shortly after New Year's Day, which will impact all state businesses by the end of March should the state fail to close the deficit gap. The Governator proposed several steps to bridge the deficit gap, including $7 billion in funding from the Federal government; additional spending cuts of $8.5 billion; and extracting approximately $1 billion from transportation funds at local levels. Such steps were thwarted by state Democrats while Speaker of the House and California resident Nancy Pelosi has already informed the Governor that the state is “on its own in this financial crisis.”
We will keep you posted…
Hot Money
Non Recourse Acquisition/Permanent Loans
Penstar recently identified a capital provider seeking to fund acquisition/permanent loans on stabilized industrial, office, retail, mobile home, and self-storage properties. They are seeking properties located in major metropolitan areas and will offer non-recourse financing up to 70% loan to purchase. Minimum transaction size is $15,000,000; maximum is $100,000,000. They are aggressively seeking portfolio acquisitions. Interest rates offered are fixed for 5 years or may float for up to a 10-year term. For more information, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.
Helpful Humor
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 Economy is So Bad” • CEO's are now playing miniature golf. • Motel 6 won't leave the light on anymore. • The Mafia are laying off judges. • I received a pre-declined credit card in the mail. • The bank returned my check marked ‘insufficient funds.’ I called and asked if they meant my funds or theirs?! • Hot Wheels and Matchbox stocks are now trading higher than General Motors. • Parents in Beverly Hills fired their nannies and were forced to learn their own children's first names. |
30
Day Libor |
10-Year
Treasury |
Prime |
0.32% |
3.74% |
3.25% |
Penstar Realty Advisors can be reached at (818) 883-9600.
Our offices located at:
21700 Oxnard Street, Suite 1870, Woodland Hills, CA 91367