Tuesday, April 1, 2014

RECI Reports extremely favorable mortgage market conditions for borrowers

Jeanne Peck
Chicago, IL April 1, 2014 -- The US stock market is basking in record-high territory with a challenging task of grasping attractive yields.

As for bond and mortgage investors, they must choose a blended approach matching inflation protection compared to slower economic growth.  

The ongoing glut of real estate capital forces lenders to accept lower spreads, while trying to maintain underwriting discipline. These factors translate to the continued tightening of mortgage spreads over treasuries and borrowers
are the real winners under such conditions.

To better understand the extremely favorable mortgage market conditions for
borrowers, trends reflecting treasury pricing say it all as follows:

*    Treasuries are gradually climbing upward with 5-year treasury notes yields peaked at their highest levels not seen since the summer of 2011,
while 10-year notes stay in excess of the two-percent mark since last May.

*    Funding sources are moving up the risk curve mainly by offering more leverage.  Thus, the focus within the industry is on treasury movements. Should treasuries stay within a predictable range, more forward-delivery and other creative longer-term fixed-rate products will re-emerge.

*    Mortgage spreads as compared to different property types reflect less than a 10 basis point difference between multifamily and conventional commercial property types, the tightest range in recent years as funding sources see less difference in property type risks with improving
fundamentals in supply versus demand for space.

*    With the threat of higher interest rates looming, permanent lenders are liberalizing prepayment privileges for longer-term debt, hoping to remove the burden of lower yielding debt in the future.

*    With banks, conduits, life companies and other private/public debt funds crowding the marketplace, less pricing differentiation is noticeable, particularly for conservative, lower leverage loans.

*    Even between various grades of real estate properties (e.g., Class-A vs. B and C), pricing differentials are quite favorable, often quoted within a 50 to 100 basis-point-range.

"The overall economy continues improving with real estate fundamentals enjoying the benefits", says Jeanne Peck, a director of the Real Estate Capital Institute.  "Markets are carefully watching Treasuries, particularly short- and medium-term maturities - those most commonly linked to commercial real estate debt.   Investors may be underestimating how fast the Fed can
raise rates."

The Real Estate Capital Institute(r) is a volunteer-based research organization that tracks realty rates data for debt and equity yields.  The Institute posts daily and historical benchmark rates including treasuries, bank prime and LIBOR.  Furthermore, call the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825) for daily rate updates.

The   Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624
Contact: Jeanne Peck, Executive Director
director@reci.com / 

Cousins Properties Announces New Leases at Colorado Tower in Downtown Austin, TX

Rendering of planned Colorado Tower, Downtown, Austin, TX
Rachel Coulter
AUSTIN, TX--Cousins Properties Incorporated (NYSE: CUZ) has signed three new leases, totaling 109,620 square feet, at Colorado Tower in Downtown Austin, TX.

Leasing at the Class-A office development has reached 51 percent, up from 22 percent at the end of 2013, with approximately 182,000 square feet still available.

"We are excited to announce over 109,000 square feet of new leasing activity at Colorado Tower," said Larry Gellerstedt, President and Chief Executive Officer of Cousins.

"The addition of these outstanding customers to an already first class roster further demonstrates the compelling value proposition of the project and the continued strength of the Austin CBD."

Additional information on these leases:

  • Hawkeye Partners leased 11,636 square feet and was represented by Jim Crouch.
  • Atlassian leased 24,141 square feet and was represented by Jeff Pace and Jake Ragusa with JLL.
  • Parsley  Energy leased 73,843 square feet and was represented by Will Douglas and Nathan Lawrence with CBRE and Jim Bell with Studley.

Larry Gellerstedt

Cousins was represented on all deals by Rachel Coulter and Kevin Kimbrough with Oxford Commercial.

Projected to be delivered December 2014, the 373,000-square-foot, Class-A office development will be the first high-rise tower built in Austin since Cousins developed Frost Bank Tower in 2003.

Cousins has played a prominent role in the Austin real estate market for over 20 years, with a list of notable projects including Frost Bank Tower, Palisades West, and its recent acquisition of 816 Congress.

For a complete copy of the company’s news release, please contact:

Cousins Properties Incorporated
Tim Hendricks, 512-477-3434
Senior Vice President
Marli Quesinberry, 404-407-1898
Director, Investor Relations

HFF closes sale of Centre at Cypress Creek in Houston, TX

Centre at Cypress Creek, 20455, 20465, 20475 State Highway 249
and a 245,094-square-foot flex industrial/office property
at 11777 Compaq Center Drive, Houston, TX
Rusty Tamlyn
HOUSTON, TX – HFF announced today that it has closed the sale of Centre at Cypress Creek, a four-building office and industrial complex totaling 465,716 square feet in northwest Houston, Texas.

               HFF marketed the properties on behalf of Principal Real Estate Investors.  SG Cypress Real Estate Ventures purchased the assets for an undisclosed amount, free and clear of existing debt.  Coventry Investment Group, Inc. and Coventry Realty Advisors acted as consultant to SG on the transaction.

               Centre at Cypress Creek is comprised of three office buildings totaling 220,622 square feet located at 20455, 20465, 20475 State Highway 249, and a 245,094-square-foot flex industrial/office property at 11777 Compaq Center Drive. 

The office space is 93.6 percent leased to tenants including Gexa Energy, FoxConn, Intel Americas, and Noble Energy and the industrial space is fully occupied by FoxConn. 

Building amenities include three parking garages, a cafeteria, auditorium, jogging trails and picnic areas.  The Centre at Cypress Creek is located within the former HP Compaq Computer Campus, a 300-acre office park fronting Highway 249 in northwest Houston.

               The HFF investment sales team representing the seller was led by senior managing directors Rusty Tamlyn and Jeff Hollinden.

Jeffrey Hollinden
Principal Real Estate Investors manages or subadvises $48.7 billion in commercial real estate assets.  The firm’s real estate capabilities include both public and private equity and debt investment alternatives.

 Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.

Coventry is a full service real estate company with expertise in the acquisition and operation of Class A and B office buildings for pension funds, institutional investors and private equity sources.  

Over the course of 30 plus years, Coventry has owned and operated, or developed, 22 buildings and more than 4.5 million square feet of office space, primarily in Texas. 

Additionally, Coventry has managed, on a third party basis, an additional 3.4 million square feet of commercial real estate.
For a complete copy of the company’s news release, please contact:

Kristen M. Murphy
Associate Director
HFF | One Post Office Square, Suite 3500 | Boston, MA 02109
Main: 617-338-0990 | Direct: 617-848-1572 | Cell: 617-543-4873 | www.hfflp.com

Marcus & Millichap Arranges Sale of Eden Court Apartments in Tampa, FL for $1.2 Million

Eden Court Apartments, 3712 West Cass Street, Tampa, FL

Francesco Carriera
 TAMPA, FL,  March 31, 2014 – Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has announced the sale of Eden Court Apartments, a 28-unit apartment property located in Tampa, Florida, according to Richard D. Matricaria, regional manager of the firm’s Tampa office. The asset sold for $1,245,000.

Francesco Carriera and Michael Regan, vice presidents investments and Joshua Teplitzky, investment specialist in Marcus & Millichap’s Tampa office, had the exclusive listing to market the property on behalf of the seller, a private investor based in Connecticut. 

The listing agents also procured the buyer of the property a private investor from Delray Beach, Florida.

Eden Court Apartments was built in 1973 and is located at 3712 West Cass Street in Tampa, Fla.  The property consists of two, two-story buildings comprising of 28, one-bedroom/one-bathroom units with 700 rentable square feet. 

Michael Regan
The buildings were repainted and approximately 10 air-conditioning units were replaced. The interiors of 26 out of 28 units were completely renovated.

“We generated ten offers throughout the marketing process and received a large amount of interest from local South Tampa investors,” says Teplitzky. “The two highest bidders were from South Florida and Canada.”

“The availability of attractive financing really drove the top bidders over several strong cash offers,” concludes Teplitzky.
For a complete copy of the company’s news release, please contact:

Richard D. Matricaria
Regional Manager,
 Tampa, FL

(813) 387-4700

MBA Releases 2013 Commercial/Multifamily Mortgage Origination Volume Rankings

 WASHINGTON, DC (April 1, 2014) – According to a set of commercial/multifamily real estate finance league tables prepared by the Mortgage Bankers Association (MBA), Wells Fargo; J.P. Morgan Chase & Company; Bank of America Merrill Lynch; Eastdil Secured; KeyBank; PNC Real Estate; HFF, L.P.; Meridian Capital Group, LLC; CBRE Capital Markets; and Prudential Mortgage Capital Company were the top commercial/multifamily mortgage originators in 2013.

The MBA study is the only one of its kind to present a comprehensive set of listings of 117 different commercial/multifamily mortgage originators, their 2013 volumes and the different roles they play. 

The MBA report, Commercial Real Estate/Multifamily Finance Firms - Annual Origination Volumes, presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. 

Nine different companies were at the top of the 11 lists reporting total originations by investor groups:

  • Wells Fargo topped the list of total origination volumes  
  • J.P. Morgan Chase & Company and Eastdil Secured were the top originators for commercial mortgage-backed securities (CMBS)  

  • Bank of America Merrill Lynch and PNC Real Estate were the top originators for commercial bank loans
  • MetLife Real Estate Investors and Prudential Mortgage Capital were the top originators for life insurance companies
  • Wells Fargo and Walker & Dunlop were the top originators for Fannie Mae
  • CBRE Capital Markets Inc. and Berkadia were the top originators for Freddie Mac
  • Red Mortgage Capital, LLC and Greystone were the top originators for FHA/Ginnie Mae
  • TIAA-CREF and JLL were the top originators for pension funds

CBRE Capital Markets and HFF, L.P. were the top originators for credit companies
  • KeyBank and Eastdil Secured were the top originators for REITS, Mortgage REITS, and Investment Funds
  • Mesa West Capital LLC and Meridian Capital Group were the top originators for specialty finance;
  • Wells Fargo and HFF, L.P. were the top originators for the “other investors” category
  • By dollar volume, the top five originators for third parties in 2013 were Eastdil Secured; HFF, L.P.; Meridian Capital Group; CBRE Capital Markets; and KeyBank.
 The top five lenders in 2013 were Wells Fargo, J.P. Morgan Chase & Company, Bank of America Merrill Lynch, KeyBank, and PNC Real Estate.

The report is available for purchase through MBA's Online Store here.  Members of the press may request tables from the report by emailing Shawn Ryan at sryan@mba.org.

Marcus & Millichap Capital Corp. Arranges $16.5 Million Refinance in New York City

46-unit mid-rise apartment building, New York City

Christopher Marks
NEW YORK, NY – Marcus & Millichap Capital Corp. (MMCC), a leading provider of commercial real estate financing and capital markets expertise, has arranged $16.5 million of debt for a 46-unit mid-rise property in New York City.

            Christopher Marks, an originator in the Manhattan office and Steven Rock, an originator in the firm’s Westchester office, arranged the loan. John Krueger in the Manhattan office represented the borrower.

            “The borrower came to MMCC looking to refinance a newly constructed property,” says Rock. “This proved to be a challenge as it can be difficult to finance properties without an operating history.” MMCC secured a 70 percent loan-to-value, seven-year, fixed rate loan at 3.7%, which amortizes over 25 years.

For a complete copy of the company’s news release, please contact:

Gina Relva
Public Relations Manager
Marcus & Millichap Capital Corporation
(925) 953-1716

MBA Releases Commercial/Multifamily Quarterly DataBook for Q4 2013

 WASHINGTON, DC --The Mortgage Bankers Association (MBA) released its fourth quarter 2013 Commercial Real Estate/Multifamily Finance Quarterly DataBook.

To download a free copy, click here.

The report includes a summary of major trends and detailed charts and tables that provide current and historical information on the economy and commercial/multifamily real estate markets.  Among the findings covered in the DataBook:

The fourth quarter marked the highest volume of commercial and multifamily mortgage originations since 2007, with all investor groups increasing their activity.

The level of commercial/multifamily mortgage debt outstanding reached a new high in the fourth quarter – increasing $41.2 billion, or 1.7 percent, over the previous quarter.

Rising property incomes and values continue to boost the performance of commercial and multifamily mortgage loans.  For most investor groups, delinquency rates have returned to the lower end of their historical range.

MBA’s Quarterly DataBook compiles the most up-to-date information on topics of interest to commercial/multifamily real estate finance industry professionals, including trends in the economy, property sales, originations, delinquencies, and mortgage debt outstanding.

If you have any questions please contact Shawn Ryan at (202) 557-2727 or sryan@mba.org.