GraceCapital.com News
Financing, Equity & Investments

2ND QUARTER
 2005

A Message from Jonathan Kieswetter
President, Grace Capital Group

If you haven't already noticed, there is an enormous amount of capital flowing into the real estate market via debt, equity and mezzanine structures like I've never seen in my 28 years in the business. Also, we see terms getting better and leverage pushing higher, as capital providers vie for residential and commercial real estate projects.


Here are a few capital providers worthy of mention:

  • A brand new Los Angeles based private fund just got it's second investment from it's institutional partners taking it's fund up to $1 billion for non-recourse debt, leverage to 90%, simple approval, very quick, non-bank regulation environment, priced LIBOR ± 300bp for bridge loan and mez opportunities.
  • A German bank has just opened shop in California as a one stop shop for debt, equity and mez financing structures with loan costs up to 95% on un-entitled land, land development, condo conversions, commercial projects, construction loans and bridge loans.
  • A union labor pension fund is providing equity for commercial real estate up to 100% of costs, guarantee of the senior loan and no "pref rate" or "look backs" on it's investment, only pari passu returns.
  • A New York REIT is looking for credit tenant purchase opportunities nationwide, but in particular needs west coast projects. Grace Capital just sold a Lowe's & Michael's store to this REIT at an aggressive cap rate which resulted in the highest price attainable in the market.

Inspiration

Under this covenant of justice, liberty and union we have become a nation - prosperous, great, and mighty. And we have kept our freedom. But we have no promise from God that our greatness will endure.

We have been allowed by Him to seek greatness with the sweat of our hands and the strength of our spirit. In each generation, with toil and tears, we have had to earn our heritage again. If we fail now then we will have forgotten in abundance what we learned in hardship: that democracy rests on faith, that freedom asks more than it gives, and the judgment of God is harshest on those who are most favored.

-- Lyndon B. Johnson

Recent Closings

Acquisition Financing
$13,200,000
Non Recourse Debt
LTV 70%
Less than 30 days to fund

Four Working Farms to be Subdivided into Residential Communities
Pinal County, Arizona

Joint Venture Advisory Services
$70,000,000
5 Un-entitled and entitled parcels
Land owner had exhausted their capital base and experience level to process a huge 2,500 acre parcel. A builder was brought in as a development and capital partner, which enabled the partnership to acquire adjoining parcels, to increase the scope of the project and provide necessary water rights.
Sparks, Nevada

Land Acquisition Financing
$6,141,000
Commitment received in 1 week.
Financing provided to Debtor in Possession to acquire a bankrupt Golf Course built on a landfill to be subdivided into 750 SFR Units. For almost a year the developer could not find a lender that would lend on a landfill project.
Houston, Texas


Refinance
$900,000 with Cash Out
5 Year term
Schoolhouse Building
Palm Desert, California

Land Acquisition
$5,200,000
100% Purchase Financing
Non Recourse
Un-entitled land
that will be subdivided for a residential community.
Lake Elizabeth, California


One Technology Park, Suite I-821, Irvine, California 92618 * 800.213.2100
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* Rates and terms subject to change without notice
This newsletter is intended for Real Estate Professionals Only.
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