More favorable realty capital market conditions predicted by the Real Estate Capital Institute

 

John Oharenko

Chicago, IL – The year ended with an accelerated domestic inflation rate of nearly seven percent, the most significant increase since the summer of 1982.

Even so, the new year shows a continued promise of more favorable realty capital market conditions predicts the Chicago-based Real Estate Capital Institute.

According to John Oharenko, the Real Estate Capital Institute director, "2022 looks to be a bullish year, but investment discipline must be maintained as most opportunities show efficient pricing.

  "Furthermore, inflation fears drive more capital into this sector, so expect values to increase for strongly performing assets."

COVID variants wreak havoc on ownership strategies. Yet, wise investors see fresh opportunities created by such disruptions spanning the past two years.

New revenue streams surface, including work-at-home, new shopping/recreational habits, and creative housing development options.

Based on an abundant supply of relatively affordable capital, funding sources embrace exploring such opportunities.

Even as the Fed promises future rate hikes beginning in March, mortgage pricing remains at historically favorable levels. In particular, rate spreads for various risk profiles stay extremely tight, based on the following parameters:

Floating Rates:  Mostly used for short-term fundings, floating-rate loans fall within the mid-to-higher-two-percent range.

 Lenders continue transitioning from LIBOR to other indices, including the Secured Overnight Finance Rate ("SOFR."), translating to spreads starting at 200 basis points.

 

Fixed Rates:  Permanent debt markets revolve around fixed-rate debt, with longer-term rates of five years or more barely priced higher than floating-rate deals.

Most funding opportunities start in the lower-three-percent range.   That said, five-year pricing rose closer to ten-year loans during the past few months, as inflation fears mount.

 

Debt Yields:  As prices for prime properties rise, CMBS lenders stick to debt yields as low as seven percent for multifamily and ten percent for more challenging assets.

 

 As a result, loan amounts stay in the 65% LTV range. To help borrowers reduce debt service costs, such lenders also offer interest-only payments.

 

Ten-to-Twenty-Basis-Point Rule:  Given tight pricing across the board, 10 to 20 basis point pricing premiums buy higher debt leverage (e.g.,  70-80% LTV), longer-term, tertiary market deals, and other generally more aggressive underwriting parameters than in the past.

 Lenders look for more yield, often competing within such narrow profit margins.

 

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

 john.oharenko@reci.com

 Executive Director

director@reci.com / www.reci.com

^The   Real Estate Capital Institute^®

Chicago, Illinois USA 60622

JLL facilitates sale of medical office adjacent to The Villages on behalf of Stage Equity Partners in Lady Lake, FL

Mindy Berman 

 
ORLANDO, FL – JLL Capital has facilitated the sale of TLC Medical Arts Building, a 28,712-square-foot, Class A medical office building and ambulatory surgery center in Lady Lake, Florida.

 

JLL marketed the property on behalf of the seller, Stage Equity Partners, a leading private owner of medical office buildings headquartered in Chicago.

Evan Kovac 

The JLL Healthcare Capital Markets team representing the seller was led by Senior Managing Directors Evan Kovac and Mindy Berman and Managing Director Timothy Joyce, with support from Vice President Trent Jemmett.

 

“Medical office buildings anchored by surgery centers continue to demand a premium in the marketplace,” said Kovac.

 

 “Our client, Stage Equity, did a phenomenal job executing their business plan leading to a successful outcome.

 

"TLC Medical Arts Building checked a lot of boxes, most notable its location adjacent to The Villages, a world-renowned retirement community boasting the nation’s fastest-growing population.”

Timothy Joyce

Remedy Medical Properties acquired the property via a competitive process that yielded extremely strong interest from a range of high-quality investors.

 

The property is a multi-tenant medical office building significantly anchored by TLC Outpatient Surgery & Laser Center, a joint venture partnership between physician members and United Surgical Partners International (“USPI”).

 

The ambulatory surgery center features three operating rooms and two procedure rooms offering a range of specialties including, ENT, spine, urology, plastic surgery and podiatry.

 

USPI, which is part of Tenet Healthcare, operates over 400 ambulatory facilities across 28 states. The balance of the tenancy comprises strong regional practices.

Trent Jemmett

Located at 201 West Guava St., TLC Medical Arts Building is situated less than an hour from Orlando and adjacent to the world-renowned The Villages, the largest retirement community in the country.

 

 Drafting off the extreme growth happening in and around The Villages was an integral and ultimately successful part of Stage’s investment strategy. 

 About Stage Equity Partners

Stage Equity Partners is one of the nation’s leading owners of healthcare real estate properties, including medical office buildings and surgery centers. Stage acquires, develops and manages top medical office buildings across the country, with a focus on the Midwest and Southeast, including Texas.

TLC Medical Arts Building,
 a 28,712-SF, Class A medical office
building and ambulatory surgery
 center in Lady Lake, FL

About Remedy Medical Properties

Remedy Medical Properties is an independent, full-service healthcare real estate company providing acquisition, development, leasing, management and strategy consulting services across the United States.

 As the largest private owner of healthcare facilities in the country, with 22.7 million square feet spanning 41 states, the company creates customized real estate solutions for some of the most discerning healthcare providers in the country.

 

 

CONTACT:      

     

Cierra Lacasse

PR, Capital Markets

JLL

T +1 602 648 8701

M +1 408 318 8021

JLL.com 

PRP Sells 350 Rhode Island Street Office Building in San Francisco, CA for $182.5 Million

350 Rhode Island Street, 
a 127,100 square foot office building
leased to the City and County of San Francisco

 

WASHINGTON, DC -– PRP has sold 350 Rhode Island Street, a 127,100 square foot office building leased to the City and County of San Francisco (S&P: AAA).

Miyeon Lee

The property was originally acquired for $134.25 million in November of 2019.

PRP was represented in the leasehold sale by the San Francisco office of JLL, while PRP worked directly with Safehold.

Adam Lasoff

JLL’s Capital Markets team was led by Adam Lasoff, Rob Hielscher, Michael Leggett, Miyeon Lee and Erik Hanson.

As part of the exit, PRP bifurcated the land and the improvements, selling the Fee Simple position to Safehold Inc. (NYSE: SAFE) for $64.5MM while selling the Leasehold to a venture of Lincoln Property Company and Korea Asset Investment Management (“KAIM”) for $118MM, for a total consideration of $182.5MM or $1,436/SF. Both sales occurred simultaneously.

Rob Hielscher

 “By structuring and executing a highly complex deal involving two separate negotiations and sales that were required to occur concurrently by December 31st of 2021, PRP was able to maximize the value of the asset through the bifurcation process at disposition," stated Paul Dougherty, President of PR.

  "We are not aware of another owner that has successfully undertaken such a complicated effort at the sale of an asset.

 “JLL did a great job of holding this sale together though a very tough process.”

 

Paul C. Dougherty

Originally built in 2002, the property was redeveloped in 2018 for the City’s tenancy.

 The San Francisco District Attorney’s Office is headquartered in the building.

 The City of San Francisco leases 350 Rhode Island Street through 2033.

 Located in the premier SoMa submarket with close proximity to world-renowned technology firms including Uber, Airbnb, Dropbox, PayPal and Zynga, the property is walking distance to public transit options including BART, CalTrain, and Muni Metro.

 

CONTACTS:      

     

Kristen Murphy

Senior Manager

 Public Relations

 Investor Services

JLL

One Post Office Square, Suite 3500

Boston, MA 02109

T +1 617 848 1572

M +1 617 543 4873

Kristen.Murphy@am.jll.com

 jll.com

 

Kacey Converse

PRP, LLC

 202-741-8400

 kconverse@prprei.com

 

Colleen Ramsey

PRP, LLC

202-741-8400

 

WWW.PRPREI.COM

 

PRP, LLC | 1909KSTREET NW, SUITE 820| WASHINGTON,DC 20006 | P: 202.741.8400 F: 202.741.8401

 

 

 

 

 

Comunale Hires Industrial Acquisitions Team of Clint Jenkins and Charlie Wigdale to Pursue Regional Market Growth

 

 Clint Jenkins

DENVER, CO, Jan. 6, 2022 – Positioning for growth in the highly competitive Southwest and Mountain West industrial markets, Comunale Properties has expanded its dedicated investments team, focused on pursuing acquisition and development opportunities primarily in Colorado, Arizona, Texas and Utah.

 

Industry veteran Clint Jenkins will head the team as Senior Vice President of Investments, responsible for the oversight of all company acquisitions and the asset management of Comunale’s portfolio of approximately 2 million square feet of industrial space in five states.

 

Charlie Wigdale joins Comunale as Senior Associate, responsible for underwriting acquisitions, evaluating development opportunities and conducting asset management.

Charlie Wigdale

“Clint and Charlie bring great talent to Comunale at a time when we are actively growing the size, complexity and geography of our industrial presence,” said John Comunale, President of Comunale Properties.

 

 “Their understanding of institutional-level investment pairs seamlessly with ours, and will add a level of support that ensures we’re selecting and executing on the best locations and the best projects for long-term investment.”

John Comunale

Jenkins joins Comunale following almost 14 years at American National Insurance, where he most recently served as Assistant Vice President of Real Estate Investments.

Wigdale joins Comunale from industrial-focused investment banking firm SLATE Partners, where he was responsible for financial analysis and valuation, industry research, due diligence, buyer outreach, and the preparation of investment marketing materials.

 

CONTACT:      

     

Stacey Hershauer

stacey@focusaz.com

480.600.0195

 comunaleproperties.com.

 

Stan Johnson Co. brokers $17 million sale of grocery-anchored shopping center in Tulsa, OK

 

Margaret Caldwell

TULSA, OK -- Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of Summit Square, a 166,552-square-foot shopping center located at 7104 South Sheridan Road in Tulsa, Oklahoma.

 The center was 96 percent leased at the time of sale and is anchored by a newly renovated Reasor’s grocery store.

Gill Warner 

 Margaret Caldwell, Gill Warner and Patrick Kelley of locally based Stan Johnson Company brokered the sale on behalf of the seller.

  The center was acquired by First National Realty Partners for $17.0 million and is the investment firm’s first acquisition in Oklahoma.

 “Summit Square is an awesome investment opportunity for First National Realty Partners given the diversified tenant mix with a newly renovated grocer and good leasing momentum,” said Caldwell, Managing Director and Partner.

Patrick Kelley 

“The center offers strong returns and fantastic demographics, with a 3-mile population of over 93,000 people and average incomes above $90,000.”

 The South Tulsa shopping center offers excellent ingress and egress points and boasts very ample parking for its 25 tenants and available suites.

 The immediate area has very little grocer competition, and Reasor’s has been a tenant since the center was originally constructed in 1987.

Summit Square,  a 166,552-square-foot shopping
center located at7104 South Sheridan Road
 in Tulsa, OK

 

Their recently completed multi-million-dollar renovation illustrates the grocery store’s commitment to the center and local neighborhood.

 Other tenants include junior anchors, Tuesday Morning and American Freight, along with a strategically curated roster of shop tenants including restaurants, medical retailers, service providers and more.

 “Summit Square is well-located within the Tulsa market and anchored by Reasor’s, a best-in-class local grocer that was acquired by Brookshire Grocery Company during our negotiations, to further bolster the appeal of the center,” added Kelley, Associate Director.

CONTACT:           

David Ebeling

Ebeling Communications

949.861.8351

949.278.7851 (Cell)

david@ebelingcomm.com

Member of the National Association of Real Estate Editors (NAREE)

“PR Strategist for the Commercial Real Estate Industry:  I do what I love and love what I do.”