Financing, Equity & Investments

   October 2004

Land Financing

Grace Capital is pleased to announce that we have secured several new lending partners for land financing on commercial and residential projects nationwide for un-entitled raw land, tentative mapped land and land developments. Pricing and terms vary with the risk factors for each project and its market characteristics. Non-recourse is available in certain circumstances.
Loan sizes range from $1,000,000 to $100 million.

Equity Capital Structures

Grace Capital has a new Life Company (LC) equity investor for commercial real estate value added projects, developments and condo conversions. Our LC investor can structure their equity in traditional ways at terms priced better than the big NY Investment Banking Firms; BUT the exciting structure that makes this LC unique is the ability to provide 100% financing. The LC uses a Forward Commitment (LCFC) as the collateral for 100% of the project costs at LIBOR based pricing from the big Money Center Banks. With this LCFC, there is no “look back” or “water fall” investor returns. Profits are split when the project is completed, sold or refinanced!!!
Equity size ranges from $15 million to $200 million.

Income Property

Fixed Rate Property Loans as of October 5, 2004:

Property Type 10 Year Rates*
Apartments 4.87% - 5.15%
MHP 4.97% - 5.25%
Commercial Properties 5.01% - 5.55%
Credit Tenant Leases 5.08% - 6.18%

Hard Money

Grace Capital has private investor money available for land, commercial real estate and residential developments nationwide. Rates and terms vary but range from a low of 8% to as much as 14% with terms from 6 months to 3 years. Hard money typical max’s out at 70% LTV but it can move very quickly and be good short term bridge financing.
Loan amounts range from $1,000,000 to $75 million.

Structured Financing

Grace Capital has been very successful in structuring project financing with debt, mezzanine and hard money financing to eliminate equity profit sharing. Two recent value added projects came to us by a developer who was looking for an equity partner. Grace Capital, instead, structured them with bank LIBOR senior loans with a junior mezzanine financing secured by the partnership interests to get the loan to cost up to 93% without any equity or profit participation at interest rates in the mid 4% range!

Credit Tenant Financing

Grace Capital just received a quote on a Lowe’s Home Improvement Warehouse at a spread of 0.81% over the 10 year Treasury which is approximately 4.00% this week; that’s a 4.81% 10 year rate!

Recent Closings

Construction Financing
Edgewater Resort
Taylorsville Lake, Kentucky
40 of 120 Vacation Cottages
Long Term Ground Lease
Garden Terrace MHP
Stanton, California
103 Space MHP
Fixed Rate Financing
A & D Loan and
Equity Financing

North Valley Plaza
Chico, California
Retail Shopping Center
Senior Construction Loan & Mezzanine Financing
93% of Cost

Economic Updates

The number of U.S. workers filing first-time applications for unemployment benefits rose by 18,000 to a seasonally adjusted 369,000 for the week that ended Sept. 25, the Labor Department reported. That marked the highest level since the week of February 7th. A Labor Department statistician said the increase was caused by hurricanes Charley, Frances and Ivan. Jobless claims have risen in five of the six weeks since the hurricanes began to strike Florida in mid-August. The four-week average of claims, as a result, has moved steadily higher.

Consumers appear to be tapped out on spending for now, economists say. Business investments will be counted on to change the economy, which grew at a 3.3 percent annual rate in the second quarter, up from initial estimates of 2.8 percent.


At a 1984 prayer breakfast, Mr. Reagan stated: "Without God, there is no virtue, because there's no prompting of the conscience. Without God, we're mired in the material, that flat world tells us only what the senses perceive. Without God, there is a coarsening of the society. And without God, democracy will not and cannot long endure. If we ever forget that we're one nation under God, then we will be a nation gone under."

In Memory of President Ronald Wilson Reagan: 1911-2004

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* Rates and terms subject to change without notice
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