Tuesday, June 2, 2020

RECI notes pricing for prime longer-term commercial real estate debt dips into the low-3% range.



John Oharenko 
Chicago, IL, June 2, 2020 – The Real Estate Capital Institute (RECI) reports this year continues with more surprises, as civil unrest overtakes COVID-19 worries.  
Communities feel financial and emotional pains as federal, state, and local governments continue operating in crisis mode.

The commercial real estate industry, too, moves to crisis mode even as businesses reopen. In the capital markets, funding sources creatively cooperate with property owners to find solutions for returning to more normal conditions. 

 However, recent events bring more permanent changes to the markets, including the following underwriting trends emphasizing the word "minimum":

Minimum Pricing:  Lenders mostly ignore pricing indices tied to treasuries, as meager benchmark rates hardly reflect current risk/reward profiles. Today's pricing for prime longer-term debt dips into the low-3% range.  However, most loans fall within the 3.5% to 4.5% range, depending upon property type and risk profile.

 Minimum Leverage:  For new-origination loans, fifty to sixty percent loan-to-values accurately demonstrate lenders' reluctance to take loan risk during such uncertain conditions.  Higher equity requirements remain the best tools for risk mitigation.

 Minimum Development Risk:  New construction projects stall as investors monitor highly volatile market conditions based on existing development pipelines and changing consumer demands.  As a result, more discounting occurs on construction costs; in some cases, by as much as fifteen percent.  Also, more cooperation exists between municipalities and developers, as problem-solving takes the forefront of capital market decision-making.


 Minimum Threshold Safety Requirements:  Lenders, investors, authorities, premisists, and nearly everyone involved with operational property decisions now focus on occupant physical safety and health conditions.  Professional operations require outlining how such issues are addressed from property to property.


 Minimum Contact:  Investors focus on providing premises with social distance as an essential physical design benefit.  Expect more space per person, and at highly competitive pricing given the overall malaise of office, retail, lodging, and other "non-essential" property types.

 The Real Estate Capital Institute's® director, John Oharenko, adds, "It's back to basics of the industry.  While financial performance remains a priority, life-safety issues rightfully take the spotlight in today's commercial realty markets."



The Real Estate Capital Institute® 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.  

 CONTACT:

John Oharenko
Executive Director
 john.oharenko@reci.com
The   Real Estate Capital Institute®
Chicago, Illinois USA 60622

Freddie Mac provides $32.25 million loan for Orlando-area community


Mona Carlton  

MIAMI, FL – JLL Capital Markets announced it has arranged a $32.25 million refinancing for Lake House, a 240-unit, garden-style multi-housing community in Davenport, Florida.



Elliott Throne   
JLL worked on behalf of the borrower, Beachwold Residential, to secure the 10-year, floating-rate loan through Freddie Mac. The loan will be serviced by Holliday Fenoglio Fowler LP, a JLL company and a Freddie Mac Optigo℠ lender.

Lake House is situated on 19.72 acres at 200 Village Boulevard in the community of Davenport, outside of Orlando.

 The property benefits from several nearby employment demand drivers, including Walt Disney World, Universal, numerous Fortune 500 distribution centers and Orlando Health’s new “Reunion Village” development.

Additionally, the immediate area surrounding the property offers residents an abundance of retail, restaurants, recreation and entertainment offerings.


Jesse Wright
Renovated in 2019, Lake House offers tenants one-, two- and three-bedroom floor plans, and community amenities that include a pet-friendly environment, clubhouse, health and fitness center, car care area, basketball court, outdoor grill, swimming pool, tennis court and bark park.

The JLL Capital Markets team representing the borrower was led by Senior Managing Director Mona Carlton, Managing Director Elliott Throne, Directors Jesse Wright and Amit Kakar and Associate Michael DiCosimo.

“This refinance is a testament to lenders like Freddie Mac who continue to provide unbelievably attractive financing terms in a unique time when all else seems uncertain,” Throne said. “Beachwold was able to take advantage of historically low rates that better position both them and this great asset for many years to come.”

Amit Kakar 
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers.

The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment advisory, debt placement, equity placement or a recapitalization.

The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

For more news, videos and research resources on JLL, please visit the firm’s U.S. media center Web page: U.S. newsroom.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management.


Michael DiCosimo




 JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. 

JLL is a Fortune 500 company with annual revenue of $18.0 billion, operations in over 80 countries and a global workforce of more than 94,000 as of March 31, 2020. 

JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. 

About Beachwold Residential


 Lake House, a 240-unit,
garden-style multi-housing community
 in Davenport, Florida.


Beachwold Residential and its principals have built, owned and managed multifamily properties for 40 years. The firm controls 57 properties and 15,000 multifamily units in Connecticut, Texas, Florida, Georgia, Virginia, Maryland, New Jersey and Tennessee.

 CONTACT:

 Kristen Murphy
 JLL Senior Manager
Public Relations
Phone: +1 617 848 1572




HSA Commercial Real Estate Breaks Ground on 1 Million-Square-Foot Business Park in Bristol, WI


Bristol Highlands Commerce Center Rendering:
Construction is set to begin later in June on the first two buildings
 of the 68-acre Bristol Highlands Commerce Center
near I-94 and the Wisconsin-Illinois border.



Robert E.
(Bob) Smietana
CHICAGO, IL, June 2, 2020 — Chicago-based HSA Commercial Real Estate and Washington Capital Management, on behalf of one of its clients, today announced the start of construction on the first phase of the 68-acre Bristol Highlands Commerce Center at Wilmot Road and 136th Avenue in Bristol, Wis., near I-94 and the Wisconsin-Illinois border.

Site work and mass grading for the business park is already underway, and the development team expects buildings to start going vertical later in June.


Jeff Hoffman
The first two speculative buildings, which are scheduled to deliver in the fourth quarter, include a rear-load 157,656-square-foot warehouse building with 31 truck docks and a cross-docked 472,216-square-foot distribution center with 72 truck docks.

Jeff Hoffman and Chad Vande Zande of Cushman & Wakefield | Boerke in Milwaukee, together with Eric Fischer of Cushman & Wakefield in Chicago, are marketing the buildings for lease on behalf of ownership.

“While many developers are pushing pause right now as a result of the COVID-19 pandemic, we believe projects like Bristol Highlands Commerce Center are more important than ever to meet rising e-commerce demand,” said Robert E. (Bob) Smietana, vice chairman and CEO of HSA Commercial Real Estate.

Tim Thompson
“A growing dependence on e-commerce makes it critical for warehouse and logistics businesses to expand their capacities and streamline delivery capabilities – and developing high-clear, last-mile distribution facilities is essential to that operation.”

“One of the important lessons we’ve learned from the COVID-19 crisis is that responsiveness and speed of delivery is critical during this time – and beyond – and we’ve adapted the occupancy process at this development to be more efficient as a result,” said Tim Thompson, HSA Commercial’s executive vice president and managing director of industrial brokerage.

Chad Vande
Zande
 “HSA Commercial partnered with the Village of Bristol to map out an expedited use and occupancy process that will allow future tenants of Bristol Highlands Commerce Center to start shipping product from the building within one week of lease execution.”   

In addition to the two-building first phase, a remaining 25-acre parcel can accommodate up to a 450,000-square-foot warehouse for development on spec or as a build-to-suit for a total warehouse capacity of over 1 million square feet throughout the park.

Each of the three buildings at Bristol Highlands Commerce Center will feature clear heights ranging from 32 feet to 36 feet, with generous trailer and employee parking.

Eric Fischer 
The business park also offers an attractive campus-like design that features sizable setbacks, enhanced landscaping and walking paths for workers that connect with the neighboring greenway and conservancy areas.
           
Itasca, Ill.-based Premier Design + Build Group is serving as general contractor, while Riverwoods, Ill.-based Partners in Design Architects is responsible for the project design and Brookfield, Wis.-based Pinnacle Engineering is managing civil engineering.


CONTACTS:

 Rebecca Boykin, rboykin@taylorjohnson.com, (312) 267-4523
        Abe Tekippe, atekippe@taylorjohnson.com, (312) 267-4528


Marcus & Millichap Promotes Agents Ronnie Issenberg and Gabriel Britti to Senior Managing Director Investments in Miami, FL Office



 
Ronnie Issenberg
Miami, FL – Marcus & Millichap (NYSE: MMI), a leading commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, announced that Ronnie Issenberg and Gabriel Britti of the company’s Miami office have been promoted to Senior Managing Director Investments according to Scott Lunine, Regional Manager.  

Previously, Issenberg and Britti held the position of Senior Vice President Investments. 

 “Ronnie and Gabe have been an extremely successful investment real estate brokerage team, and are born leaders in our office,” says Lunine.

Issenberg and Britti better known as the Issenberg Britti Group is an investment sales team, specializing in net leased assets throughout the U.S. with a unique focus on several tenant classification that fell under the essential business category during the Covid -19 Pandemic, including: Pharmacies, Service Stations, Fast Food Establishments, Automotive (Tire Kingdom, O’Reilly’s Automotive and 7 Eleven), to name a few,” says Issenberg.

Gabriel Britti 
“I am very honored to be recognized by the firm. I started with Marcus Millichap while still in college and have enjoyed every second of my time here.” says Britti.

Issenberg and Britti are enthusiastic members of ICSC, have earned Sales Achievement Awards consistently since 2011 and were recognized in 2019 as two of the Top Ten Performers in the Miami office and Top Twenty Net-Lease Retail Agents in the United States. 

 To date they have closed more than $2.5 billion in commercial real estate transactions.




CONTACT:

Scott Lunine
Vice President
Regional Manager
Miami, FL
(786) 522-7000