Midwest Experts Weigh in on Commercial Real Estate Trends for 2015

  

Barbara Gaffen

CHICAGO, IL (Dec. 11, 2014)  – With sales of Chicago-area apartments, hotels, retail, office and industrial properties on pace for the best year since the recession, Midwest real estate experts predict another banner year for commercial real estate in 2015 as new projects break ground and existing developments are brought to market.

Here are some specific trends they expect to see in the new year:

1. Rentals Continue to Raise the Roof

Perhaps no commercial asset performed better in Chicago this year than the apartment sector, especially new Class A buildings that commanded high occupancies, top rents and few, if any, concessions.

 Even Chicago’s suburban occupancy rate rose to its highest level in seven years in 2014, with rents predicted to rise 3 to 3.5 percent during 2015.

With developers on track to complete more than 3,100 apartments in downtown Chicago in 2015 and potentially 6,400 in 2016, some wonder if supply will outpace demand. To answer that question, a number of Chicago’s premier multifamily experts share their predictions for Chicago’s rental scene and other top rental markets in 2015:

Waterton Associates – David Schwartz

David Schwartz

“The homeownership rate has continued to trend lower as people of all ages have been drawn to the relative affordability and flexibility of the rental lifestyle,” said David Schwartz, co-founder and CEO of Waterton Associates, whose portfolio comprises approximately 20,000 rental units across the U.S. 

“This is especially noticeable among young adults, many of whom have held off on buying their first home in order to maximize mobility and, in some cases, save up money for a down payment.

“With millennials no longer feeling as much pressure to buy, many are in no rush to leave the amenity-rich rental communities they’ve called home for the past several years, which will continue to drive demand among both renters and investors in 2015,” noted Schwartz. Waterton acquired 10 rental communities in 2014 and plans to announce several new deals in the first quarter of 2015.

Tony Rossi Sr.

M & R Development and RMK Management Corp. – Tony Rossi, Sr.

“Luxury rentals in the city will continue to be in high demand, with strong occupancies driven mostly by Gen Y and millennials,” said Tony Rossi Sr., president of M & R Development and RMK Management. 

“But well-located, desirable suburban markets will also see an increase in new high-end rentals. These will be especially appealing to young professionals, families seeking the flexibility of renting and access to great schools, and the ever-growing boomer demographic that appreciates the maintenance-free lifestyle of a rental near their friends and family, yet offers walkability and transit access.”

M & R and RMK opened 73 East Lake, a luxury apartment tower in Chicago’s East Loop, in 2014 and plan to break ground on a high-end rental community in the North Shore village of Wilmette, Ill., in 2015.

Prime Property Investors – Barbara Gaffen

According to Barbara Gaffen, co-CEO of Prime Property Investors (PPI), value-add properties are a sweet spot in the multifamily sector due to their strong ROI. “With so many new Class A developments delivering next year, projects that are 10 to 15 years old will be considered bargains, as they can be updated to compete with many of today’s newest buildings at a fraction of the cost of new construction,” said Gaffen.

Estates at Fountain Lakes, Houston, TX suburb 

In 2014, PPI acquired Estates at Fountain Lakes, a Class A garden-style apartment community in suburban Houston – a city Gaffen says will continue to perform well for investors in 2015. 

“The Houston market is among one of the most vibrant multifamily markets in the country,” she noted. “By enhancing common areas and upgrading kitchens and baths at Estates at Fountain Lake, we’ve been able to increase rents by $150 to $200 per month, showing that pricing improves and risk falls when you add value.”

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

                                                      

 Kim Manning, kmanning@taylorjohnson.com, 312-267-4527

 Abe Tekippe, atekippe@taylorjohnson.com, 312-267-4528

$1 Million Sale of Fair Mini Storage in Tampa, FL Brokered by Marcus & Millichap

  

Fair Mini Storage, 6551 Mobile Highway, Pensacola, FL

Chico LeClaire

PENSACOLA, FL, Dec. 11, 2014 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Fair Mini Storage, a 37,375 rentable square foot, self-storage located in Pensacola, Fla., according to Richard D. Matricaria, regional manager of the firm’s Tampa office. 

The asset sold for $1,000,000.

Chico LeClaire, a senior vice president investments in Marcus & Millichap’s Denver, Colo. office and Michael A. Mele senior vice president investments and Luke Elliott, associate in the firm’s Tampa, Fla. office, represented the seller, a private investor based in Texas.  Dave Knobler, a senior associate in Marcus & Millichap’s Houston office secured and represented the buyer. 

Fair Mini Storage is located at 6551 Mobile Highway in Pensacola, Fla.  This facility is 34 percent climate-controlled and consists of 327 units which range in size from 50 square feet to 300 square feet. 

Michael A. Mele

The premises are secured by an electronic gate with keypad access and the site’s perimeter is fully fenced.  Additional security is provided by on-site lighting and surveillance cameras.  The facility offers roll-up doors and wide driveways for easy drive-up unit accessibility. 

 “Fair Mini Storage was the one of the few remaining distressed deals left over from the downturn” says Mele.  “We had over nine offers with buyers ranging from California to Florida” adds Elliott.

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

                                                      

 Richard D. Matricaria

Vice President/Regional Manager

Tampa, FL

(813) 387-4700

Marcus & Millichap Arranges Sale of Felicia Villa Apartments in Tampa, FL for $867,000

  

Felicia Villa Apartments, 4711 North Grady Avenue, Tampa, FL

Joshua Teplitzky

 TAMPA, FL, Dec. 11, 2014 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Felicia Villa Apartments, a 21-unit apartment property located in Tampa, Fla., according to Richard D. Matricaria, regional manager of the firm’s Tampa office. The asset sold for $867,000.

Joshua Teplitzky, associate and Michael P. Regan and Francesco P. Carriera, vice presidents investments all in Marcus & Millichap’s Tampa office, represented both parties in the transaction.

Felicia Villa Apartments is located at 4711 North Grady Avenue in Tampa, Fla.  The property consists of one, two-story building with 21, one-bedroom/one bathroom units. 

Common area renovations include a new security system, fresh exterior building paint, new windows, new landscaping and new roofs.  The interiors of 19 of the units were upgraded with carpet and tile, with renovated countertops and new appliances. 

Francesco Carriera

"This property is located just outside of the Westshore Business District in Tampa with easy access to major employment centers,” says Teplitzky.  “We drove three offers in the two weeks of marketing and commanded a lot of interest from local, as well as out-of-area investors.

“The property traded above a 10 percent capitalization rate which was the main catalyst for the quick sale.”

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

                                                      

 Richard D. Matricaria

Vice President/Regional Manager

Tampa, FL

(813) 387-4700

Essex Realty Group Brokers Sale of Nine-Unit Mixed-Use Building in Chicago, IL

  

Jordan Gottlieb

 CHICAGO, IL, Dec. 11, 2014 - Essex Realty Group, Inc. is pleased to announce the sale of 3441 N. Halsted in Chicago, Illinois. The property is a 9-unit recently renovated building located in Chicago’s Lakeview neighborhood. 

The sale price was approximately $3,500,000.

Jim Darrow and Jordan Gottlieb represented the seller and Doug Imber and Kate Varde represented the buyer.

Essex Realty Group, Inc. specializes in the sale of investment real estate throughout the Chicago metropolitan area.

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

Douglas Fisher

Essex Realty Group, Inc.

773.305.4910

dougfisher@essexrealtygroup.com

www.essexrealtygroup.com

Davis Partners Expands To Northern California’s Bay Area

  

Bob Thiergartner

NEWPORT BEACH, CA (Dec. 11, 2014) – Davis Partners, a Newport Beach-based commercial real estate firm, has announced the expansion of its management services to the Bay Area.

 Since 1972, the firm has focused on ground up development, investment, debt and equity structuring and workouts, as well as all the third-party support functions of management, leasing, accounting and reporting.

 In Southern California, Davis Partners oversees a 17 million-square-foot portfolio. The firm has now recognized the opportunity to follow the Bay Area’s strong economic growth and expansion of its client business into Northern California.

Davis Partners has taken over a 2.3 million square foot portfolio management assignment that encompasses 22 assets located from San Jose to San Francisco including a product type mix of office, R&D, and industrial property.

“It’s an exciting time in the market,” said Bob Thiergartner, President and Chief Investment Officer, Davis Partners.. “Assets are trading hands at a lightening pace but there are few third party management groups in the Bay Area that can provide the immediate hands-on level of service and customized approach that has become synonymous with Davis Partners.

“ For this reason it’s the perfect time to expand our service, relationships and our base, building our business platform with our current assignment while looking to add more.”

All told, the firm now operates five offices in Northern California with nine employees.

“Diversification will be a significant aspect of our firm’s growth as we look ahead. 

"Establishing our name in Northern California at this point in the real estate cycle is going to be important to building our business platform in 2015, especially since Orange County and Los Angeles are still technically recovering,” Thiergartner added.

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

Darcie Giacchetto

Spaulding Thompson & Associates

949.278.6224

MVP REIT Acquires 7-Story, 775-Space Parking Garage in Downtown Cincinnati, OH for $15 million

  

Mike Shustek

San Diego, CA (Dec. 11, 2014) – MVP REIT, Inc. announced today that the company acquired a 70.01 percent tenant-in-common interest in Tower Place Parking Garage, a seven-story, 775-space parking garage located in downtown Cincinnati. 

The parking garage was purchased for an aggregate of $15 million and closed on December 9.

Located at 400 Race St., the parking garage is connected to a 13-story, 520,000-square-foot mixed-use development encompassing a Hyatt Regency Hotel and retail stores.

 The garage is a short walk from Paul Brown Stadium, home of the National Football League’s Cincinnati Bengals, and Great American Ball Park, home of Major League Baseball’s Cincinnati Reds.

MVP REIT acquired the garage with a recently signed 10-year lease in place with SP+, formerly known as Standard Parking. 

The Standard Parking and Central Parking brands of SP+ operate approximately 4,200 parking facilities with more than 2.1 million parking spaces in hundreds of cities across North America, including parking-related and shuttle bus operations serving more than 75 airports.

“This garage benefits from its premium location in a well-visited area near major attractions, as well as its long-term net lease to a quality operator,” said Mike Shustek, chairman and chief executive officer of MVP REIT.

The acquisition was financed through a 4.25 percent fixed-rate, 10-year loan of $9 million.

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

Julie Leber

Account Manager

Spotlight Marketing Communications

18101 Von Karman Avenue, Suite 330

Irvine CA 92612

949-427-5172, ext. 703

509-338-5676 - cell

julie@spotlightmarcom.com

Lincoln Brokers Weissman, Nowack, Curry and Wilco’s 5,070-Square-Foot New Lease in Alpharetta, GA

  

Hunter Henritze

ATLANTA, GA (Dec. 11, 2014) – Lincoln Property Company Southeast (Lincoln) has brokered the Weissman, Nowack, Curry & Wilco law firm’s new 5,070-square-foot lease at 600 Northwinds, a six-story, 148,058-square-foot Class A office building located at 11675 Rainwater Drive in Alpharetta in the North Fulton submarket of metro Atlanta. 

The law firm is moving from its location in North Point Center East, also in Alpharetta.

Hunter Henritze and Michael Howell, both vice presidents of office leasing at Lincoln, represented the landlord, Equity Office, in the transaction, and Dan Granot of Joel & Granot Commercial Real Estate represented the tenant.

“Demand in the North Fulton market continues to grow stronger with each passing day,” said Tony Bartlett, senior vice president at Lincoln who oversees the Atlanta office. “Northwinds, with its great array of amenities and a location that offers comfortable access to GA 400 and Buckhead, is in a prime position to take advantage of this increasing leasing activity.”

Michael Howell

600 Northwinds is located in Northwinds Office Park, a 258-acre mixed-use development featuring two hotels, four banks, nine restaurants, two newly renovated fitness facilities, a daycare/learning facility and six free conference/training facilities.

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

Stephen Ursery

The Wilbert Group

404-405-2354

sursery@thewilbertgroup.com

Meridian Capital Group Arranges $25.5 Million in CMBS Financing for the Crystal Lakes Apartments Located in Miami Gardens, FL

Crystal Lakes Apartments, 2545 NW 207th Street, Miami Gardens, FL

Boca Raton, FL, Dec. 11, 2014 – Meridian Capital Group, LLC, a leading national commercial real estate finance and advisory firm, negotiated $25.5 million in CMBS financing for the cash out refinance of the Crystal Lakes Apartments, a multifamily property located in Miami Gardens, FL on behalf of Ytech International.

The 10-year CMBS loan features a competitive fixed-rate of 4.89% and five years of interest-only payments, with a 30-year amortization schedule. 

This transaction was negotiated by Meridian Capital Group Managing Director, Michael Brown, and Loan Originator, Brad Beattie, who are both based in the Company’s Boca Raton, FL office.

Crystal Lakes Apartments totals 491 units and is located at 2545 NW 207th Street in Miami Gardens, FL.

 The sponsors recently completed a full rehabilitation and re-tenanting of the property. Crystal Lakes Apartments is conveniently located next to two major attractions, the Calder Race Track and Sunlife Stadium.

“After being underwritten using trailing three-months income, we were able to negotiate a substantial cash out and very aggressive loan terms including five years of interest-only payments at a sub-7.5% debt yield,” said Mr. Brown.

Calder Race Track, Hialeah, FL

Founded in 1991, Meridian Capital Group, LLC is one of the nation’s largest commercial real estate finance and advisory firms. 

Meridian is headquartered in New York with offices in New Jersey, Maryland, Illinois, Florida and California. 

Working with a broad array of capital providers, Meridian arranges financing for transactions ranging from $1 million to more than $500 million for multifamily, co-op, office, retail, hotel, mixed-use, industrial, healthcare, student housing, self-storage and construction properties. www.meridiancapital.com

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

Jonathan Stern

Meridian Capital Group, LLC

212/972-3600

jstern@meridiancapital.com

$80.75 Million Manhattan Mixed-Use Portfolio Sold by Marcus & Millichap

  

                             3143, 3147 and 3149 Broadway, Upper West Side, New York City

  

Marco Lala

NEW YORK, NY  – Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, announced the sale of the Upper West Side Portfolio, a six-property mixed-use commercial real estate portfolio in Manhattan’s Upper West Side featuring 152 multifamily units and 7,900 square feet of retail.

The $80,750,000 sales price equates to approximately $515,000 per unit.

This is the first time in 30 years that the properties, 500 Cathedral Parkway, 3143 Broadway, 3147 Broadway, 3149 Broadway, 111 West 104th St. and 242 West 109th St. have changed hands. 

In total, the properties offer 62,655 square feet of air rights, providing the option of future development projects.

All of the buildings are located near New York City universities, including Columbia University, City College and Barnard College. 

Many of the buildings’ existing tenancy consists of current and former students of these intuitions. 

500 Cathedral Parkway, Upper West Side
New York City, NY

Columbia’s planned 6.8 million-square foot expansion will further solidify this area as a high-demand location for students and young professionals.

            Marco Lala, in Marcus & Millichap’s Manhattan office, represented the seller and the buyer, both private investors and repeat clients of the firm.

            “This transaction underscores the continued strength of New York City’s multifamily marketplace in general and above 96th Street in particular,” says Lala.

 “The portfolio possesses a difficult-to-find combination of free-market units, rent-stabilized tenants and a select group of retail stores that creates a stable investment with significant upside potential.”

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

Gina Relva

Public Relations Manager

(925) 953-1716

HFF closes sale of and arranges financing for 4-property Class A multi-housing portfolio in Houston, TX

  

Apartment Portfolio, Houston, TX

Todd Marix

HOUSTON, TX – HFF announced it has closed the sale of and arranged financing for a four-property, Class A multi-housing portfolio totaling 900 units in Houston, Texas. 

                HFF marketed the property on behalf of the seller.  Southwest Multifamily Partners, a commingled fund jointly led by Los Angeles-based CityView and Dallas-based Lincoln Property Company purchased the portfolio in a joint venture with an institutional co-investment partner. 

HFF’s debt placement team worked on behalf of the buyer to secure acquisition financing in four separate transactions through Freddie Mac’s (Federal Home Loan Mortgage Corporation) CME Program. 

  The securitized loans will be serviced by HFF through its Freddie Mac Program Plus® Seller/Servicer program.

                The portfolio, located in the Texas Medical Center and Galleria submarkets, is 95 percent leased overall and will be managed by Lincoln Property Company.  Individual property details are below:

Todd Stewart

·        Mirage Apartments, 2100 Bering Drive, Galleria, 200 Units

·        Parque Del Oro Apartments, 8380 El Mundo Street, Texas Medical Center, 224 Units

·        San Melia Apartments, 6383 El Mundo Street, Texas Medical Center, 252 Units

·        Versailles Park Apartments, 7200 Almeda, Texas Medical Center, 224 Units

                The HFF investment sales team representing the seller was led by senior managing directors Todd Marix and Todd Stewart and director Chris Curry.

HFF’s debt placement team was led by senior managing director Andy Scott, executive managing director Jody Thornton and associate director Michael Cosby.

Southwest Multifamily Partners, LP was formed in 2012 to focus on value-add multifamily investments in the major metros across the southwest U.S.  The fund, led by CityView as its managing member, and Lincoln Property Company as its exclusive operating partner, has acquired more than 1,500 units in Dallas, Fort Worth and Houston, Texas and in Boulder, Colorado. 

Chris Curry

                CityView is an investment manager with more than $750 million under management on behalf of institutional investors.  

In addition to the value-add fund, CityView is currently developing 12 multifamily projects across various infill markets such as San Francisco, Oakland, San Jose, Los Angeles, Orange County and San Diego.

Lincoln Property Company is a privately held real estate firm involved in real estate investment, development, property management and leasing worldwide.  Lincoln was founded in 1965 and maintains offices in all major markets of the U.S. and throughout Europe. 

Lincoln's cumulative development efforts have produced more than 100 million square feet of commercial space and more than 200,000 multifamily residential units.  Lincoln Property Company is one of the largest commercial real estate companies in the world.

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

Olivia Hennessey

Public Relations Coordinator

HFF | 9 Greenway Plaza, Suite 700 | Houston, TX 77046

tel 713.852.3403 | fax 713.527.8725 | www.hfflp.com

ohennessey@hfflp.com

RealtyTrac Reports U.S. Foreclosure Activity Decreases 9 Percent in November Despite First Annual Increase in Starts Since July 2012

IRVINE, CA, Dec. 11, 2014 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its U.S. Foreclosure Market Report™ for November 2014, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 112,498 U.S. properties in November, a decrease of 9 percent from the previous month and down 1 percent from a year ago — the 50th consecutive month with a year-over-year decrease in overall foreclosure activity.

The report also shows one in every 1,170 U.S. housing units with a foreclosure filing during the month.

A total of 55,906 U.S. properties started the foreclosure process in November, a decrease of 1 percent from the previous month but a 6 percent increase from a year ago, the first year-over-year increase following 27 consecutive months of year-over-year decreases.

50,102 U.S. properties were scheduled for foreclosure auction during the month, down 16 percent from an 18-month high in the previous month but up 5 percent from a year ago.

Lenders repossessed 25,249 properties in November, down 10 percent from the previous month and down 17 percent from a year ago, making November the 24th consecutive month with year-over-year decreases.

“The housing market is struggling to find the new normal when it comes to a tolerable level of foreclosure activity in this post-Great Recession economy,” said Daren Blomquist, vice president at RealtyTrac. “Finding that new normal requires striking a balance between too much loan risk, which would result in another housing meltdown, and too little risk, which could result in a stunted recovery.

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

Jennifer Von Pohlmann

949.502.8300, ext. 139

jennifer.vonpohlmann@realtytrac.com