$9,100,000 Refinance of a Hotel Property in Anaheim, California.
FINANCED Cortona Inn and Suites
Property Type: Hotel
Lender: Bank City: Anaheim, California Size: 127 Rooms Term: Seven-year term, 30-year amortization
Michael Thorp and Ari Zeen of PSRS arranged the $9.1 million refinance of a hotel property in Anaheim, California. The subject property is a 127-room, boutique hotel in the heart of the Anaheim Resort. The hotel is strategically located adjacent to the Anaheim Convention Center and within walking distance from Disneyland. Financed with bank execution, PSRS provided its borrower a non-recourse, 35% LTV loan with a seven-year term and a 30-year amortization.
$4,000,000 Refinance of a Retail Property in Laguna Woods, California.
FINANCED Smarte Parke
Property Type: Retail
Lender: Life Insurance Company City: Laguna Woods, California Size: 23,500 SF Term: Three-year term, 25-year amortization
Michael Tanner and Tony Messiah of PSRS arranged the $4 million refinance of a retail property in Laguna Woods, California. The subject property is a free-standing, 23,500-square-foot retail property located in a 3.65-acre, Home Depot-anchored shopping center in Laguna Woods. The concrete building was built in 1999 and houses Smart Parke, a pet spa and boarding business. Financed with one of our correspondent life insurance companies, PSRS provided its borrower with a three-year loan term and a 25-year amortization.
Market Update
Recent 10-Year Treasury Rates: Since last Monday, 10-year Treasuries have averaged 4.64%, up by 4 basis points.
Weekly Rate Range: This past week, rates fluctuated within a 7-basis point range, settling between 4.60% and 4.67%, as bond buyers adjusted their expectations for the timing of Fed Funds rate cuts later in the year.
Changing Sentiment Factors:
Inflation Persistence: Recent inflation prints consistently above 3% over the last three months, challenging conventional economic thinking.
Resilient Economy: Despite higher rates, the economy and labor market continue to show resilience, defying traditional interest rate-economic activity relationships.
Fed Communication: "Fed Speak" has tempered expectations for rate cuts, emphasizing the need for further inflation improvement towards the Fed's 2% target.
Fed Funds Rate Status: Since July 2023, the Fed has maintained the overnight Fed Funds rate between 5.25% - 5.50%. However, with the economy growing at a 3% annual rate and unemployment at 3.80%, some economists argue that the rate is not restrictive enough.
Fed's Approach: The Fed is unlikely to raise rates further, opting to maintain the current level in hopes that interest rate-sensitive sectors like housing and autos slow down, contributing to inflation containment.
Future Fed Moves: Given the circumstances, it's improbable that the Fed will enact rate hikes soon.
About PSRS Founded in 1972, PSRS is a commercial mortgage banking firm that helps real estate investors of all sizes structure and secure financing solutions that align with their investment goals.
