MBA Evaluates SEC Regulatory Proposals on Credit Rating Agencies

SEC Opens Comment Period on Regulatory Proposals for Credit Rating Agencies

WASHINGTON, DC -- The Mortgage Bankers Association (MBA) has praised the Securities and Exchange Commission (SEC) for issuing proposed credit ratings agency reform measures that would promote transparency, accountability, and credibility.

Even though MBA opposes different types of ratings for structured finance versus other investment products, we appreciate the agency's recognition of the controversial nature of this issue by considering under a separate track, the proposal to require structured securities to have a unique identifier or enhanced disclosure information.

"We recognize that credit rating agencies play a pivotal role in the investment community by making assessments about financial services providers and financial instruments used in the secondary mortgage market," said Kieran P. Quinn, (top right photo) CMB, MBA's Chairman. "We are pleased the SEC's recognizes the valuable impact ratings agencies have on the relationship between issuers and investors."

The first part of the proposal significantly increases the scope and depth of disclosures credit ratings agencies would be required to make. For example, ratings agencies would be required to publicly disclose the information it uses to determine a rating on a structured product.

The proposal also would require rating agencies to disclose the way they rely on the due diligence of others to verify the assets underlying a structured product. The Proposal's first part also includes measures to decrease opportunities for ratings agency conflicts of interest. For example, ratings agencies would be prohibited from structuring the same products that they rate. MBA has long supported efforts such as these to increase transparency and credibility of credit ratings.

The second part of the Proposal would require credit rating agencies to differentiate structured products ratings from bond ratings, either through the use of different symbols, or by issuing a report disclosing the differences between ratings of structured products and other securities.

MBA believes separate ratings for structured products vs. bonds will add further confusion and disruption to secondary market transactions. We will advocate that this portion of the Proposal be withdrawn or modified.

The SEC's vote on this portion of the Proposal was not unanimous, and SEC board members opposing the proposal referenced MBA's position. We are planning to review the Proposal upon its public issuance and will submit formal comments during the comment period of 30 days after their publication in the Federal Register.

"MBA is pleased that the SEC has agreed to review the differentiation of structured rating under a separate approval track because it will allows for the separate consideration of constructive rating agency reforms while at the same time maintaining MBA's strong opposition to the proposed structured rating's identifier," said Jan S. Sternin, (middle left photo) senior vice president, commercial/multi-family.

MBA will work with the SEC and other industry participants to try and address concerns about separate ratings approaches for structured securities.

CONTACT: Jason Vasquez (202) 557-2950. jvasquez@mortgagebankers.org

Marcus & Millichap Sells Eight-Property Walgreens Portfolio for $34.8M

FORT LAUDERDALE, FL— Marcus & Millichap Real Estate Investment Services has arranged the sale of an eight-property Walgreens portfolio spanning six states for $34.78 million.

Marc E. Strauss, (middle right photo) a vice president investments and senior director of Marcus & Millichap’s National Retail Group in the Fort Lauderdale office, and Brian Rosen, an investment specialist in the same office, represented the seller, Lifter Realty, Based in North Miami Beach, Fla.

“The portfolio was marketed as a package due to a single loan encumbering a large portion of the portfolio,” says Strauss. “With six to 13 years remaining on the double net-leases, the properties were less attractive than many of the new 25-year, triple-net leased Walgreens stores currently on the market. Nonetheless, we were able to secure an offer for seven of the stores at 99.8 percent of the portfolio listing price.”

Walgreen Co. exercised its right of first refusal was the eventual buyer.

“Because of Marcus & Millichap’s strategic marketing efforts and its access to a nationwide pool of investment capital, Walgreen Co. paid a very aggressive cap rate for the stores,” adds Rosen.

The portfolio includes a 15,150-square foot store in Hempstead, N.Y.; a 15,525square foot store in Sanford, Fla.; a 13,500-square foot store in Colorado Springs, Colo.; a 13,905-square foot store in Minneapolis; a 15,525-square foot store in Ocala, Fla.; a 13,905-square foot store in Denver; a 13,905 square-foot store in Lynn Haven, Fla.; and a 13,450-square foot store in Niagara Falls, N.Y.

Strauss and Rosen arranged the sale in conjunction with Adam Christofferson, (top left photo) first vice president and regional manager of the Denver office of Marcus & Millichap; Solomon Poretsky, regional manager of the Minneapolis office; and Edward Jordan, (bottom left photo) regional manager of the form’s Manhattan office.

Press Contact: Stacey Corso
Communications Department
(925) 953-1716

HFF Represents Baywater Properties in $10.5M Financing for 1020 Post Road in Darien, CT

WESTPORT, CT – A joint venture between Baywater Properties and Frank Mercede & Sons, Inc. obtained a $10,500,000 permanent loan for its new 27,000-square-foot commercial building in Darien, Connecticut.

The 10-year financing was provided by TD Banknorth. The Westport office of HFF (Holliday Fenoglio Fowler, L.P.) represented the borrower in the financing.

1020 Post Road (site map at left below) is a newly constructed, fully leased, mixed-use property. The first floor is retail and includes Lucy, Ruby’s, Ole Mole, Williams & Warren and Gofer Ice Cream.

The second floor is leased as offices to Merrill Lynch and Cheswick Wright Wealth Management and there are six luxury apartment units on the third floor.

“David Genovese (top right photo) of Baywater developed a unique project,” said managing director Al Epstein with HFF.

“He was able to combine separate land parcels in the heart of Darien’s downtown that were underutilized for decades and convince the town leadership to permit something brand new.

"It took Genovese over five years to get this done and it has become a real catalyst for a revitalized downtown, including the expansion of its municipal parking.”

“If ‘location’ is the mantra for success, this property is the poster child. It is on U.S. Route 1 (Post Road), within walking distance to the Metro North train station and two blocks from the entrance to Interstate 95. Darien is an affluent community with high barriers to entry. So a new development in its central business district is quite an event,” Epstein added.

Baywater Properties is a fully integrated commercial real estate investment, development and management company with properties in Fairfield and Westchester Counties.

Frank Mercede & Sons, Inc. has been actively engaged in all phases of building construction, construction management and design/build projects.

CONTACTS:

Alvin J. Epstein, HFF Managing Director, 203 226 8171, aepstein@hfflp.comLaurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990, lmcdowell@hfflp.com

Foreclosure Activity Increases 7% in May, According to RealtyTrac(r) U.S. Foreclosure Market Report

Foreclosure Activity Up 48 Percent From May 2007

IRVINE, CA– June 13, 2008 – RealtyTrac® (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its May 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 261,255 properties during the month, a 7 percent increase from the previous month and a 48 percent increase from May 2007.

The report also shows one in every 483 U.S. households received a foreclosure filing during the month, the highest monthly foreclosure rate since RealtyTrac began issuing the report in January 2005.
RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 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.

(For a state-by-state breakdown, please contact Tammy Chan at Atomic PR. 415-402-0230 tammy@atomicpr.com)

(Atlantic City Boardwalk at left above)

"May was the third straight month where we’ve seen a month-to-month increase in foreclosure activity and the 29th straight month we’ve seen a year-over-year increase,” said James J. Saccacio, (top right photo) chief executive officer of RealtyTrac.

“The nationwide rate of increase for default notices and foreclosure auction notices slowed in May, with default notices up just 1 percent from the previous month and auction notices down 3 percent from the previous month. Phoenix, AZ skyline at left)

"However, bank repossessions continued to surge in May — posting a double-digit percentage increase from the previous month and more than twice the number reported in May 2007 — which pushed the total inventory of bank-owned REOs in our database to more than 700,000.”

Nevada, California, Arizona post top state foreclosure rates.

With one in every 118 households receiving a foreclosure filing in May, Nevada posted the highest state foreclosure rate for the 17th consecutive month. Foreclosure filings were reported on a total of 9,009 Nevada properties, an increase of nearly 24 percent from the previous month and a 72 percent increase from May 2007.

California foreclosure activity in May increased 11 percent from the previous month and 81 percent from May 2007, helping the state continue to register the nation’s second highest state foreclosure rate. (Houston, TX skyline at left)

One in every 183 California households received a foreclosure filing during the month, a rate that was 2.6 times the national average.

Arizona’s May foreclosure rate — one in every 201 households received a foreclosure filing during the month — ranked third highest among the states for the second month in a row. Arizona foreclosure activity increased nearly 12 percent from the previous month and almost 119 percent from May 2007.

One in every 228 Florida households received a foreclosure filing in May, giving it the fourth highest foreclosure rate among the states. (Savannah, GA skyline at right)

Michigan foreclosure activity in May increased nearly 25 percent from the previous month, helping the state’s foreclosure rate to jump to fifth highest among the states after ranking No. 9 the previous month. One in every 353 Michigan households received a foreclosure filing in May.

Other states with foreclosure rates ranking among the top 10 were Georgia, Colorado, Massachusetts, Ohio and New Jersey.

California, Florida, Arizona report highest foreclosure totals

Foreclosure filings were reported on 71,930 California properties, 37,364 Florida properties and 12,959 Arizona properties, the three highest state totals in May. Michigan was not far behind Arizona, with 12,792 properties receiving foreclosure filings during the month. (Arizona skyline at right above.)

Foreclosure filings were reported on 12,295 Ohio properties in May, the fifth highest state total despite a nearly 7 percent decrease from May 2007. With one in every 410 households receiving a foreclosure filing, Ohio’s foreclosure rate ranked No. 9 among the states and was above the national average.

Georgia foreclosure activity increased 11 percent from the previous month and 23 percent from May 2007, giving the state 10,241 properties with foreclosure filing in May — the nation’s sixth highest total.

And with one in every 378 Georgia households receiving a foreclosure filing during the month, the state’s foreclosure rate also ranked No. 6 among the states. (Los Angeles, CA skyline at left)

Other states in the top 10 for total properties with filings were Texas, Illinois, Nevada and New Jersey.

California and Florida cities account for 9 of top 10 metro rates

For the second month in a row, California and Florida cities accounted for nine out of the top 10 metropolitan foreclosure rates among the 230 metropolitan areas tracked in the report.

Seven California cities were in the top 10, led by Stockton in the top spot. One in every 75 Stockton area households received a foreclosure filing in May — more than six times the national average.

Other California cities in the top 10 were Merced at No. 3, Modesto at No. 4, Riverside-San Bernardino at No. 5, Vallejo-Fairfield at No. 7, Bakersfield at No. 8, and Sacramento at No. 9.

The Cape Coral-Fort Myers metro area in Florida registered the second highest metro foreclosure rate in May, with one in every 79 households receiving a foreclosure filing during the month. The other Florida metro area in the top 10 was Port Lucie-Fort Pierce at No. 10.

Las Vegas (night skyline at left above) was the only city outside of California and Florida with a foreclosure rate ranking among the top 10. One in every 96 Las Vegas households received a foreclosure filing in May, more than five times the national average and No. 6 among the metro areas.

Metro areas with foreclosure rates among the top 20 included Phoenix at No. 12, Detroit at No. 14, San Diego at No. 17 and Miami at No. 19. (Miami night skyline at bottom right)

Ferncroft Capital Acquires Class A Neighborhood Grocery Center in Charlotte, NC

CHARLOTTE, N.C., June 13 /PRNewswire/ -- Ferncroft Capital, a Charlotte-based real estate investment company, has acquired Hunter's Crossing, (top right photo) a 93,782-square-foot grocery-anchored retail center in Charlotte, NC from Crosland, LLC for an undisclosed amount.

Located in the Ballantyne submarket of Charlotte, the center is anchored by Lowes Foods, CVS, Dunkin Donuts, and Wendy's and is currently 98% leased.

Hunter's Crossing's location along Highway 521 (Johnston Road) is a half-mile south of the affluent Ballantyne neighborhood and represents one of the major commercial arteries in Charlotte.

Jeff Thomas, principal of Ferncroft Capital, commented, "The strength of this corridor in terms of population expansion and affluence is second to none in the Southeast. Housing and employment growth continue to thrive in this submarket, supporting the long-term strategy of this investment."

Vacancy along the Highway 521 corridor and the outer southeast Charlotte submarket is the lowest in the MSA.

"We are excited to have acquired such a high-quality property in this submarket," said John Hollmeyer, principal of Ferncroft Capital. "We feel fortunate to have a good investment partner and a banking relationship that allowed us to move quickly on this opportunity."

Ferncroft Capital was able to close the deal in forty-three days.Carolina First financed this transaction for Ferncroft Capital. Berkeley Capital Advisors represented the seller, Crosland, LLC. Ferncroft Capital has retained Crosland to lease and manage the property.

Headquartered in Charlotte, NC, Ferncroft Capital acquires commercial real estate assets in the Southeast. Ferncroft Capital's acquisition strategy is to purchase well located, stabilized, and value add assets with high barriers to entry and competitive market advantages.

Ferncroft Capital's goal is to maximize investment returns and exceed the expectations of their investors.

CONTACT: Jeff Thomas of Ferncroft Capital, +1-704-315 5221, jeff@ferncroftcapital.com

Web site: http://www.ferncroftcapital.com/

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