Friday, March 14, 2008

NAR Says Fundamentals Holding in Commercial Real Estate

WASHINGTON, DC, PRNewswire-USNewswire/ -- Commercial real estate market fundamentals are fairly stable, although investment is waning following a record year in 2007, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors(R).

NAR Chief Economist Lawrence Yun (photo top left) said the commercial real estate market is holding essentially even. "We're seeing no significant changes in vacancy rates or rent growth, so the fundamentals in commercial real estate still seem to be respectable," he said.

"Under normal circumstances, near-full occupancy coupled with positive rent growth would be of strong interest to investors, but we're not seeing that. The credit crunch has filtered into the commercial real estate market."

Patricia Nooney of St. Louis, chair of the Realtors(R) Commercial Alliance Committee, said the investment cycle appears to be turning. "It looks like investors are taking a wait-and-see attitude," she said. "Even with fairly stable fundamentals and capital available from institutional investors, it appears investor confidence has declined, and some private investors have had problems obtaining financing. Commercial real estate investment set a new record in 2007, but now that we're in a period of economic uncertainty, transaction volume is likely to decline."

Investment in commercial real estate in 2007 was $427.2 billion, up 39.2 percent from the previous record of $306.8 billion in 2006; that total does not include transactions valued at less than $5 million or investments in the hospitality sector, based on analysis of data from Real Capital Analytics. NAR projects the investment dollar volume this year could drop by 30 to 40 percent, comparable to 2006 levels.

The NAR forecast in four major commercial sectors analyzes quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Historic metro data were provided by Torto Wheaton Research and Real Capital Analytics.

For a copy of the complete report, please contact:
Walter Molony,
1 202 383 1177

Regency Centers Increases Funding Capacity with New Credit Agreement

JACKSONVILLE, Fla.--(BUSINESS WIRE)-- Regency Centers Corporation (NYSE:REG) has entered into a Credit Agreement for a new credit facility in the amount of $341,500,000 for a term of 36 months, with the ability to increase the facility to an amount not to exceed $400,000,000.

The facility is composed of a term loan in the amount of $227,666,667 and a revolving credit facility in the amount of $113,833,333. The Company now has bank credit facilities that total $941.5 million.

The interest rate on the facility is equal to LIBOR plus a margin that is determined in accordance with the Company's long-term unsecured debt ratings. At the time of the closing, the effective interest rate was LIBOR plus 105 basis points for the term loan portion and LIBOR plus 90 basis points for the revolving portion.

Martin E. "Hap" Stein, Jr. (photo top right), Chairman and CEO, said, "This new facility, combined with the Company's existing $600 million credit facility and $1.3 billion of capacity in our co-investment partnerships gives Regency access to approximately $2.2 billion of capital."

Wells Fargo Bank, National Association, was Sole Lead Arranger and Administrative Agent. Wachovia Bank, National Association, was Syndication Agent and JPMorgan Chase Bank, N.A. and Regions Bank were Documentation Agent. Remaining lenders for the new Credit Agreement were PNC Bank, N.A., Sumitomo Mitsui Banking Corporation, SunTrust Bank, Bank of America, N.A., Comerica Bank and The Bank of Ireland.

Regency Centers Corporation (NYSE:REG)

Regency is the leading national owner, operator, and developer of grocery-anchored and community shopping centers. At December 31, 2007, the Company owned 451 retail properties, including those held in co-investment partnerships. Including tenant-owned square footage, the portfolio encompassed 59.2 million square feet located in top markets throughout the United States.

Since 2000 Regency has developed 187 shopping centers, including those currently in-process, representing an investment at completion of nearly $3.0 billion. Operating as a fully integrated real estate company, Regency is a qualified real estate investment trust that is self-administered and self-managed.

Regency Centers Corporation, Jacksonville, FL
Lisa Palmer,

HFF Miami Hires Michael Sprotzer as Associate Director in Investment Sales Group

MIAMI, FL – HFF (Holliday Fenoglio Fowler, L.P.) has hired Michael Sprotzer (top left photo) in Miami as an associate director in the investment sales group and as a member of the firm’s national multifamily group.

Mr. Sprotzer will focus on multifamily investment sales in the southeastern United States. He has more than three years of real estate experience and recently worked as an acquisitions associate at Ram Development Company where he sourced, underwrote and closed multifamily real estate acquisitions throughout the southeast.

Prior to RAM Development Company, Mr. Sprotzer was a management consultant at RealFoundations, Inc., a real estate consulting firm serving the capital markets, corporate real estate, homebuilding and REIT sectors. He also worked as a summer associate at Apollo Housing Capital, LLC while enrolled as a graduate student at Georgetown University.

He graduated with a Bachelor of Business Administration from Emory University in addition to a Master of Business Administration from Georgetown University. Mr. Sprotzer is active within his community as a tutor at the Catherine Brennan School and as a volunteer for Habitat for Humanity.

“We are delighted to have Michael as a member of our investment sales group and to help expand upon our multifamily platform in the southeastern region of the US,” said Manny de Zárraga, (photo at right) executive managing director in the Miami office of HFF.


Laurie Fish McDowell
Associate Director
HFF One Post Office Square, Suite 3500 Boston, MA 02109
tel 617.338.0990 fax 617.338.2150

Manuel A. De Zarraga
HFF Executive Managing Director

HFF Closes sale of and Arranges Financing for 12605 East Freeway in Houston

HOUSTON, TX – The Houston office of HFF (Holliday Fenoglio Fowler, L.P.) announced today that it closed the sale of 12605 East Freeway, (right top photo) an 85,506-square-foot, six-story office building in Houston, Texas.

The HFF investment sales team was led by senior managing director Dan Miller and associate director Marty Hogan who marketed the property on behalf of the seller, Bayview USA Holdings. Rockwell Management Corporation purchased 12605 East Freeway free and clear of existing debt for an undisclosed amount.

HFF associate director Matthew Kafka worked on behalf of the borrower, Rockwell Management Corporation to secure acquisition financing.

12605 East Freeway is located on a 2.6-acre site along Interstate Highway 10 close to the Sam Houston Tollway, the 610 Loop and the Port of Houston. The property was renovated from 2000 to 2003 and is 82% leased to Bank of America, The State of Texas and Jim Adler, P.C.
Bayview USA Holdings, LLC is a private, Houston-based real estate company currently focused on build-to-suits for large corporate clients.

Rockwell Management Corporation is a full-service management firm that provides services in due diligence, construction, renovation, marketing, bookkeeping, property and asset management. Rockwell currently manages 21 properties comprised of approximately 6,025 multifamily apartments and condominiums located throughout Texas.


Laurie Fish McDowell
Associate Director HFF
One Post Office Square, Suite 3500
Boston, MA 02109
tel 617.338.0990
fax 617.338.2150

H. Dan Miller, CCIM, SIOR
HFF Senior Managing Director
713 852 3500

Matthew Kafka
HFF Associate Director
713 852 3500

HFF Marketing Pre-Sale of 300 North Michigan Ave. in Chicago

CHICAGO, IL – The Chicago office of HFF (Holliday Fenoglio Fowler, L.P.) is marketing the pre-sale of 300 North Michigan Avenue,(right top photo) a planned vertical mixed-use development in Chicago.

HFF senior managing director Matthew Lawton and directors Daniel Kaufman and Kenneth Glomb will lead the investment sales team on behalf of the client, Provence Development Group. Investors may purchase the entire development or individual components and will have input in the Project’s Master Plan as well as flexibility to complete the interior architecture of each vertical component to their own specifications. The development is being marketed without an asking price.

Upon completion in the third quarter of 2011, 300 North Michigan Avenue will have 28,912 square feet of retail space on the first two floors, a 300-room hotel on the third through 23rd floors, a 225-unit multifamily component on floors 24 through 52, and a 160-space underground parking garage. The development site is located at the northwest corner of Michigan Avenue and East Wacker Place along Chicago’s “Magnificent Mile”, and is proximate to the Chicago Loop Financial District, Millennium Park, Museum Campus and the Michigan Avenue retail corridor.

“Vertically integrated mixed-use developments have long been a part of Chicago’s urban vocabulary,” said Lawton. “300 North Michigan represents an opportunity to invest in or acquire some or all of the components in a premier high-rise development that is being planned in response to the enormous demand for new retail, residential and hotel space on Chicago’s Magnificent Mile and in downtown Chicago.”

Laurie Fish McDowell
Associate Director HFF
One Post Office Square, Suite 3500
Boston, MA 02109
tel 617.338.0990
fax 617.338.2150

Kenneth J. Glomb
HFF Director
312 528 3650

Daniel A. Kaufman
HFF Director 312 528 3650
Matthew D. Lawton
HFF Senior Managing Director
312 528 3650

Record Increase in Multifamily Mortgage Debt Outstanding Led By GSEs

WASHINGTON, DC - The level of commercial/multifamily mortgage debt outstanding grew by 2.6 percent in the fourth quarter, exceeding $3.3 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. The total was an increase of $356 billion or 12 percent from the end of 2006.

The $3.3 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was an increase of $84.6 billion from the third quarter 2007. Multifamily mortgage debt outstanding grew to $831 billion, an increase of $28.2 billion or 3.5 percent from the third quarter.

The $28.2 billion increase in multifamily mortgage debt outstanding during the fourth quarter was the largest increase on record, eighty-eight percent of which came from increases in the holdings of the government-sponsored enterprises (GSEs) and Agency-and GSE-backed mortgage pools.

"Fourth quarter increases in the level of mortgage debt outstanding were driven by increases in the holdings of commercial banks and the government-sponsored enterprises (Fannie Mae and Freddie Mac)," said Jamie Woodwell, (photo top right) Senior Director Commercial/Multifamily Research. "Both groups took advantage of capital market disruptions and the lack of CMBS competition to increase their holdings of commercial and multifamily mortgages."

The Federal Reserve Flow of Funds data summarizes the holding of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issuers).

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $1.39 trillion, or 42 percent of the total. Many of the commercial mortgage loans reported by commercial banks however, are actually "commercial and industrial" loans to which a piece of commercial property has been pledged as collateral.

It is the borrower's business income - not the income derived from the property's rents and leases - that drives the underwriting, pricing and performance of these loans. A MBA Research PolicyNote found that among the top 10 commercial real estate bank lenders, 48 percent of their aggregate balance of commercial (non-multifamily) real estate loans were related to owner-occupied properties.

Since the other loans reported here are generally income property loans, meaning that the income primarily comes from rents, the commercial bank numbers are not comparable.
Jason Vasquez
(202) 557-2950

Foreclosure Activity Decreases 4% in February, According to RealtyTrac

But Foreclosure Activity Up Nearly 60 Percent From February 2007

IRVINE, CA – RealtyTrac® (, the leading online marketplace for foreclosure properties, has released its February 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 223,651 properties nationwide during the month, a 4 percent decrease from the previous month but still a nearly 60 percent increase from February 2007. The report also shows one in every 557 U.S. households received a foreclosure filing during the month.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“The 4 percent monthly decrease this February was similar to the 6 percent monthly decrease we saw in February 2007,” said James J. Saccacio, (photo top right) chief executive officer of RealtyTrac. “However, the year-over-year increase of 60 percent this February was significantly higher than the 19 percent year-over-year increase in February 2007, indicating we have still not reached the peak of foreclosure activity in this cycle.”

Nevada, California, Florida post top state foreclosure rates
Nevada (skyline photo below) continued to document the highest foreclosure rate among the
states, with one in every 165 households receiving a foreclosure filing — more than three times the national average. Foreclosure filings were reported on a total of 6,167 Nevada properties during the month, up 1 percent from the previous month and up 68 percent from February 2007.

California registered the nation’s second highest state foreclosure rate in February, with one in every 242 households receiving a foreclosure filing during the month, and Florida registered the nation’s third highest February foreclosure rate, with one in every 254 households receiving a foreclosure filing during the month. Both states documented foreclosure rates that were more than twice the national average.

Arizona foreclosure activity was up 6 percent from the previous month and nearly 210 percent from February 2007, helping the state’s February foreclosure rate — one in every 264 households received a foreclosure filing during the month — rank fourth highest in the nation.

With one in every 305 households receiving a foreclosure filing in February, Colorado’s foreclosure rate ranked fifth highest among the states despite a 1 percent decrease in foreclosure activity from the previous month. The state’s foreclosure activity was still up nearly 27 percent from February 2007.

Other states with foreclosure rates among the nation’s 10 highest were Michigan, Ohio, Georgia, Indiana and Tennessee.

California, Florida, Texas report highest foreclosure totals
Foreclosure filings were reported on a total of 53,629 California properties in February, the most of any state despite a 6 percent decrease from the previous month. The state’s foreclosure activity was still up 131 percent from February 2007.

With foreclosure filings reported on a total of 32,447 properties, Florida (Miami skyline photo at right) documented the second highest state total in February. The state’s foreclosure activity was up more than 7 percent from the previous month and more than 69 percent from February 2007.

Texas documented the third highest state total — 12,261 properties with foreclosure filings — despite a nearly 17 percent decrease in foreclosure activity from the previous month and a 1 percent decrease in foreclosure activity from February 2007. With one in every 736 households receiving a foreclosure filing during the month, the state’s foreclosure rate ranked No. 17 among the states and was below the national average.

Michigan and Ohio both reported more than 10,000 properties with foreclosure filings in February. Other states in the top 10 in terms of total properties with foreclosure filings reported were Arizona, Illinois, Georgia, Colorado and Nevada.

Tammy Chan
Atomic PR