Monday, February 3, 2020

Headline-Weary Foreign Investors See Real Estate as Safe Havens

John Oharenko
Chicago, IL – Global virus concerns, trade wars, impeachment, and the Fed’s steady course on interest rates top the news and scare the stock market, says The Real Estate Capital Institute.
As a result, benchmark treasury rates plunged since the beginning of the year by about 30 basis points.  In comparison to a year ago, after three rate drop by the fed, the 10-year rate hovers about 120 basis points lower, hitting similar levels witnessed the end of last summer.
The Real Estate Capital Institute’s director, John Oharenko, notes, "For investors seeking yield, it’s a race to the bottom.

" Also, global fears override any strategic investment decisions, particularly for overseas investors.  
"However,  strong real estate markets fundamentals should drive more money into the sector, perceived as safe-haven investments.”

Any mortgage rate discussions focus on maintaining underwriting discipline rather than reaching higher profit hurdles.  Lenders scramble to find quality loans, as overall funding activity levels tapper off.  

That said, the economy continues to outperform expectations, as the “Great Recovery” continues into the new decade.  And, mortgage rates stay attractive for borrowers recapitalizing most types of debt.

 Absolute rates dip to the lower-3%-range for conservative leveraged loans based on ten-year terms.  Higher leverage debt prices about a half-point more for reaching up to 80% LTV.  That said, the most permanent debt stays under 4%, except for debt with Mezz financing for tapping above the 80% level.

 Equity investors lament on finding proper risk-adjusted returns, understanding cap rate compression endures. 

 Low-interest rate expectations drive tighter pricing expectations, with core investors modeling mid-single-digit returns in prime markets.  

Otherwise, core-plus, value-add opportunity deals selectively exist, requiring more creativity and flexibility in property types and geographic areas to achieve higher yields.

John Oharenko 
Executive Director

Longfellow Acquires Perimeter’s Edge's five-building campus in Research Triangle, NC

 Jessica Brock.

RESEARCH TRIANGLE, NC -- Feb. 3, 2020 -- Longfellow Real Estate Partners, which invests in life science, lab and innovation space across the U.S., announced today the acquisition of Perimeter’s Edge, a 399,072 square foot portfolio of five office/flex single-story buildings adjacent to Research Triangle Park. 

Perimeter’s Edge is part of a larger array of buildings and amenities known as Perimeter Park strategically located between RTP proper, RDU International Airport and the region’s major cities.

The five buildings that make up Perimeter’s Edge are 2400 Perimeter Park, 2450 Perimeter Park, 2600 Perimeter Park, 507 Airport Blvd and 5151 McCrimmon Pkwy. Images are here.    

The five buildings that make up Perimeter’s Edge are 2400 Perimeter Park, 2450 Perimeter Park, 2600 Perimeter Park, 507 Airport Boulevard and 5151 McCrimmon Parkway.

Ahead for the portfolio, which opened in 1990 and was refurbished in 2002:

·    Longfellow will begin a series of capital improvements, including facade and landscape enhancements. 
·    Longfellow will implement its proprietary amenities and hospitality program, Elevate, which aims to redefine workplaces with lifestyle perks.
·    Longfellow will eventually convert vacant suites to state-of-the-art lab space. 

The approach is similar to transformations Longfellow has successfully undertaken elsewhere, including at RTP’s Venture at Imperial Center.

Keystone Technology Park

 Longfellow acquired Venture in 2015 and set out to remake it. The 142,746 SF Venture is now 100 percent leased. Similarly, Longfellow recently acquired and is upfitting properties in Palo Alto, San Diego and San Francisco.


Billy Warden
Principal | 919.412.0630 | @BillyWarden

The Preiss Company and Investcorp Complete Joint Venture Acquisition of 525-Bed Signature West Midtown Student Housing Complex in Atlanta, GA

Susan Folckemer

ATLANTA, GA, Feb. 3, 2020—Officials at The Preiss Company (TPCO), one of the nation’s largest, privately-held, student housing owner-operators, and Investcorp, a leading global provider and manager of alternative investment products, today announced the joint venture acquisition of the 525-bed Signature West Midtown student housing complex in Atlanta, Ga. 

“This acquisition marks our fourth student housing complex in Georgia and our entry into the attractive and growing Atlanta market,” said Susan Folckemer, chief acquisitions & development officer, TPCO.  

“Signature West Midtown benefits from an exceptional location just steps from Georgia Tech and aligns with The Preiss Company's business strategy of targeting properties based on school selectivity, the health and diversity of the job market in which the asset is located and the asset itself.  

525-bed Signature West Midtown student housing complex
800 Marietta Street NW, Atlanta, Ga 

"The recently completed building and units are in excellent physical condition, and we foresee minimal, if any, new renovations in the immediate future.  

"We are confident that the Signature West Midtown will benefit from our proprietary marketing and management tools and fully expect to see increases in both rentals and resident satisfaction scores.”


Kasey Munsch, 
Vice President of Marketing
The Preiss Company
(919) 706-0668

620 Herndon Parkway, Suite 115 | Herndon, VA 20170
Main: 703-435-6293
Mobile: 703-300-8289