Sunday, September 3, 2017

HFF closes sale of high-rise multi-housing property in Wilmington, DE

Mark Thomson
PHILADELPHIA, PA –– Holliday Fenoglio Fowler, L.P. (HFF) announced it has closed the sale of 1303 Delaware Apartment Homes (“1303 Delaware”), a 231-unit, high-rise multi-housing property in the Trolley Square neighborhood of Wilmington, Delaware.

HFF marketed the asset on behalf of the seller, Merion Realty Partners.  Capano Residential purchased the offering free and clear of debt.  Additionally, HFF worked on behalf of the new owner to secure a fixed-rate Fannie Mae acquisition loan.

1303 Delaware consists of studio, one-, two- and three-bedroom apartment homes averaging 928 square feet offering panoramic views of historic Trolley Square, which is one of Wilmington’s most sought-after neighborhoods. 

The property benefits from walkability to a variety of amenities in the surrounding area as well as accessibility to major roadways throughout the highly trafficked Delaware Avenue corridor, including Interstate 95 (0.25 miles) and Route 202 (1.5 miles). 

1303 Delaware is also less than two miles from the Wilmington Amtrak station, offering rail transportation throughout Philadelphia and the Northeast.  Community amenities include a fitness center, business center and garage parking.

Carl Fiebig
The HFF investment sales team representing the seller was led by senior managing director Mark Thomson and directors Carl Fiebig and Francis Coyne.

HFF’s debt placement team was led by managing director James Conley.

“This was a great opportunity for investors to acquire a property in one of the best locations in the state with a proven value-add component,” Thomson said.  “The sellers recently renovated 84 of the 231 units and invested more than $2 million in building systems improvements. 

“The capital spent on building improvements provides the new buyer a great opportunity to focus on updating the remaining 141 unrenovated units, which still have original kitchens and bathrooms.”

 “All of these factors combined to create significant interest in the property,” Fiebig added.  “Many of the groups attracted to this offering were looking to acquire in Delaware for the first time and were drawn to the strength of the submarket, property and proven value-add story.”

 For more information on this news release, please contact:

Olivia Hennessey
Public Relations Specialist
HFF | 9 Greenway Plaza, Suite 700 | Houston, Texas 77046
tel 713.852.3403 | fax 713.527.8725 |

Real Estate Capital Institute Finds Inflation at Lowest Point in Past Two Years

John Oharenko
Chicago, IL – The Real Estate Capital Institute notes Hurricane Harvey, along with North Korea's missile adventures, prevent the Fed from instituting any rate hikes soon. As expected, borrowers gain significant advantages by capturing low-priced debt due to such market conditions.

The Real Estate Capital Institute's Director, John Oharenko, advises, "Even as short-term rates remain very attractive, the pricing gap compared to
long-term rates is very tight." He adds, "It clearly makes sense to explore long-term debt, but with favorable prepayment privileges -- the best of both

 Other notable observations by RECI include:

Low Inflation: Despite threats of rising rates, key economic indicators show that inflation is at its lowest point of the past two years. Last month the
benchmark 10-year treasury bounced about 20 basis points, landing to the lowest levels seen under the current administration.

Short-Term Pricing Indices: LIBOR reform takes the spotlight as far as
benchmark pricing indices. British regulators announced the planned removal
of the LIBOR Index by 2021. Banks, agencies, insurance companies and other
financial institutions have relied upon this index for decades. That said,
few lenders are concerned since numerous indices emerge as probable
replacements, including the Broad Treasury Repo Financing Rate (BTFR) and
the Bank Prime Rate. The more laborious issue focuses on financial
institutions to modify documentation that corresponds to the new indices.

New Construction: Many funding sources are flush with cash for making construction loans. However, looming concerns about certain sectors of the
commercial real estate market facing overbuilding [mainly multifamily], demand that banks and other construction lenders tighten underwriting
standards -- or even retrench from such opportunities. Yet the overall state of supply-and-demand is reasonably balanced.  

Retail and office sectors are limited to build-to-suit/preleased properties, while industrial development remains healthy, including spec deals. Now more than ever, new construction
opportunities are funded on a very selective basis, generally based upon lower loan-to-cost ratios of 65% or less.

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.  

For more information on this news release, please contact:

The   Real Estate Capital Institute(r)

3517 West Arthington Street
Chicago, Illinois USA 60624
 Jeanne Peck, Executive Director