Second Bank comes in with a $180 million, seven-year, floating-rate loan proposition with a 20-year amortization schedule.
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Second Bank comes in with a $180 million, seven-year, floating-rate loan proposition with a 20-year amortization schedule. The seven-year treasury is currently 3.0 percent. The swap premium to fix the loan is 1.0 percent.
The loan spread is 250 basis points. Second Bank believes the property should have a 7.5 percent cap rate. Contrast this loan to the First Bank offer in review question 4 by calculating LTV, debt service, and first-year DSCR
(based on NOI) for each loan.
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