Mortgage rates nearly doubled since beginning of year, reaching highest levels since 2007

 

John Oharenko

Chicago, IL –  The Real Estate Capital Institute (RECI) notes September delivered challenging news to the real estate capital markets.  

A strong dollar, return to domestic manufacturing, and low unemployment kept the Fed on edge about taming the economy and triggering more interest rate hikes, leading to a 75-basis-point increase. 

John Oharenko, the Real Estate Capital Institute’s® director, recommends, "this fall's real estate capital markets remain in flux, as investors attempt to understand the Fed's plan for taming inflation."

 

The US stock market officially reached a recession.  Also, multifamily investors witnessed apartment rents dropping from record highs across the country for the first time in nearly two years. 

Conversely, millions of apartment dwellers found financial relief after suffering a barrage of rent hikes during the pandemic. 

 

In addition to interest rate hikes and softening demand, debt investors require higher mortgage spreads to cover the uncertain pricing environment. 

 Mortgage rates have more than doubled since the beginning of the year, reaching the highest levels since 2007.  Investors are preparing for more rate hikes in the coming months, showing signs of hawkish rate expectations. 

 Given the expectations of higher rates, overall mortgage pricing favors longer-term debt of ten years or more, as the yield curve remains inverted.   

 Permanent, fixed-rate debt for ten-year mortgages falls within the 120 to 200 basis point range over benchmark treasuries.  

Within this range, 80% LTV loans with a minimum debt service coverage of 1.25X typically cost 40 to 50 basis points more than 65% LTV loans for apartment properties.  Overall rates translate to about 5% to 6%.  

Also, lenders maintain similar underwriting parameters for shorter-term debt, with comparable-term treasuries hovering approximately ten to twenty basis points higher than longer-term debt. 

 

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

director@reci.com / www.reci.com

^The   Real Estate Capital Institute^® 

Chicago, Illinois USA 60622

JLL Capital Markets arranges the $27 million construction financing for the 61-unit Onyx on Park apartments in San Diego, CA

 

Olga Walsh

SAN DIEGO, CA – JLL Capital Markets has arranged the $26.9 million construction financing for Onyx on Park, a 61-unit, urban infill multi-housing community located in the Hillcrest neighborhood of San Diego, California.

 

JLL represented the borrower, DiversyFund, Inc. with Highland Construction to secure a 74% loan-to-cost fixed-rate financing package consisting of an $18.95 million senior loan and a $7.96 million mezzanine loan. 

Bryan Clark

The JLL Capital Markets Debt Advisory team representing the borrower was led by Managing Director Bryan Clark, Director Olga Walsh and Associate Daniel Pinkus.

 

“Even in this unusually volatile market, there was an incredible amount of enthusiasm from lenders for this project. In turbulent times, there’s always a flight to quality, and Onyx on Park will be one of the highest quality apartment communities in Hillcrest,” Clark said.

  

Diversyfund selected this combination of lenders due to their ability to provide competitive proceeds and excellent loan terms, including a fixed interest rate to alleviate any interest rate risk during the loans’ co-terminus five-year term.

Daniel Pinkus

With an anticipated completion of Q4 2023, the seven-story Onyx on Park will feature one- and two-bedroom units with an average size of 912 square feet.

 

Situated at 3922-3932 Park Blvd. the site is located four blocks east of the I-163 Freeway in the Hillcrest submarket at the intersection of Park Boulevard and University Avenue.

 

Residents will benefit from immediate access to over 230 restaurants and bars in the Hillcrest epicenter, walkable neighborhood amenities and major employers, including UC San Diego Medical Center, Scripps Hospital and SPAWAR.

  

For more news, videos and research resources on JLL, please visit our newsroom.

 

CONTACT:

Jenna Sharp

JLL

M +1 214 394 3356

JLL.com

 

www.DiversyFund.com 

 

The UP Companies Promotes Josh Knaust to Square UP Preconstruction Manager

 

 Josh Knaust 

St. Louis, MO --The UP Companies (UPCO) proudly announces the promotion of Josh Knaust from Estimator to the role of Preconstruction Manager at Square UP Builders.

 In his new position, Knaust works with the Director of Preconstruction to establish goals for the department and to implement best practices within the group to achieve reliable and consistent bidding and pricing outcomes. 

Brian Arnold

Prior to joining Square UP in the fall of 2018, Knaust was the owner of Gateway Drywall, Inc. based in Wentzville, Missouri. Founded in 2012, his company provided plastering, drywall and insulation services and installation.

 

“Josh checks all the boxes in terms of his skillset, drive, passion to win, customer focus, and his team mentality. Josh will continue to play a pivotal role in the future of Square UP Builders,” said UPCO President Brian Arnold.

 

 

Contact: 

Jennifer Beidle
Jennifer Beidle Communications
St. Louis, MO 63129
United States

 

 

Daum Commercial brokers $11 million industrial asset in Long Beach, CA

3221 East 59^th Street in Long Beach, CA

 

LONG BEACH, CA – DAUM Commercial Real Estate Services, a leading provider of commercial real estate services including brokerage, tenant representation, consulting, leasing, sales, and property management, has directed the acquisition of a 38,233 square-foot industrial distribution asset at 3221 East 59^th Street in Long Beach, California for over $11 million.

 

Michael Collins

The property was purchased from Metra Electronics, a 75-year-old electronics firm and worldwide leader in the manufacturing and distribution of after-market automotive audio, lighting, and safety accessories.

 The transaction, completed by Michael Collins, Vice Chairman and Director of DAUM’s Capital Markets Group, and Dustin Hullinger, Associate in DAUM’s Capital Markets Group, is the latest in a series of real estate deals the company has directed for this high-net-worth private investor. 

 Dustin Hullinger

This demonstrates the firm’s ability to maintain long-standing client relationships and satisfy demand in the industrial sector, according to Collins.

“Our company has a rich history of achieving successful outcomes for our clients, which is why they continually return to us when seeking commercial real estate representation,” says Collins.

“We were pleased to have another opportunity to serve this buyer in their search for an investment with strong potential in an extremely tight industrial market.”

 Brian Held 

With a 1.1% industrial vacancy rate at the end of Q2 2022, the Los Angeles-Long Beach (South Bay) market is experiencing high demand from users in the area for quality distribution assets, making the acquisition of this property especially noteworthy, says Hullinger.

“The competition for well-located industrial space in the South Bay is notoriously fierce,” says Hullinger.

Rob Flores

“Through our deep knowledge of the market and our extensive network of industry connections, we were able to secure a property for our client that meets all their investment requirements and positions them for ongoing positive cash flow well into the future.”

DAUM represented the buyer in the sale/leaseback transaction, while Metra was represented by Brian Held and Rob Flores of CBRE.

 

Contacts: 

Hanna Kokuashvili / Elisabeth Manville  
The Smart Agency, Inc.
(949) 438-6262 
hkokuashvili@thesmartagency.com

 

JLL Capital Markets led the $55 million sales efforts for 925 L Street, a Class A office property adjacent to the state Capitol in downtown Sacramento, CA

 

925 L Street, downtown Sacramento, CA

SAN FRANCISCO, CA, Sept, 26, 2022 – JLL Capital Markets  has closed the $55.1 million sale of 925 L St., a Class A, multi-tenant office building totaling 168,844 square feet in downtown Sacramento, California.

Rob Hielscher

JLL represented the seller, a joint venture between Soma Capital Partners and Hazelview Investments, and procured the buyer, a partnership between Seagate Properties and Cottonwood Group.

 925 L Street is a 13-story, LEED® Gold office building that is located adjacent to the state Capitol in the heart of Sacramento’s Government Affairs district.

The 94%-occupied tower has 4.7 years of weighted average lease term with 63% of the building leased to investment grade tenants, including the State of California.

 Prior to sale, ownership had signed a 13-year lease with a large State tenant demonstrating the mission-critical location adjacent to the state Capitol.

 The JLL Capital Markets team representing the seller was led by Senior Managing Director Rob Hielscher, Senior Director Erik Hanson and Director Nick Deaver.

Erik Hanson 

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 sales 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 our newsroom.

Nick Deaver

Jones Lang LaSalle Americas, Inc. ("JLL") is a real estate broker licensed with the California Department of Real Estate, license #01223413.                                         

 CONTACT:

Kristen Murphy

Director, Public Relations, Americas

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

www.cottonwoodmgmt.com. 

 

www.soma-capital.com.

www.seagateprop.com.

www.hazelview.com.

 

 

Regency Centers Announces Appointment of Kristin Campbell to Board of Directors

 Kristin A. Campbell 

JACKSONVILLE, FL, Sept. 28, 2022 (GLOBE NEWSWIRE) -- Regency Centers Corporation (“Regency” or the “Company”) announced today that its Board of Directors (the “Board”) has appointed Kristin A. Campbell as its newest member, effective as of January 15, 2023.

 Ms. Campbell is currently the Executive Vice President, General Counsel and Chief ESG Officer of Hilton Worldwide Holdings Inc., a global hospitality company (“Hilton”), a position from which she has announced her retirement effective December 31, 2022.

With the addition of Ms. Campbell as an independent director, Regency will expand the size of the Board to twelve directors.

 Martin (Hap) Stein

“Kristin brings a wealth of knowledge and experience, especially in the areas of consumer-driven businesses, ESG strategy and public company governance, that will further strengthen and diversify the perspectives and expertise of our Board, and I’m excited to welcome her,” said Hap Stein, Executive Chairman of the Board. “Her appointment also aligns with our commitment to ongoing Board refreshment.”

Ms. Campbell joined Hilton in June 2011. In her role, she leads Hilton’s global legal, compliance, government affairs and ESG functions.

Prior to Hilton, Ms. Campbell was Senior Vice President, General Counsel and Corporate Secretary for Staples, Inc. from 2007 to 2011, with a tenure of 18 years at the company.

Prior to Staples, she worked at several law firms, including Goodwin Proctor and Rackemann, Sawyer & Brewster. Ms. Campbell has served as a director of The ODP Corporation (NASDAQ:ODP) since 2016, and is chair of its Nominating and Governance Committee and a member of its Compensation Committee.

She is also a member of the Advisory Board of New Perimeter, a nonprofit organization that provides pro bono legal assistance in under-served regions around the world.

 CONTACTS:

Christy McElroy
904 598 7616
ChristyMcElroy@regencycenters.com

Eric Davidson
904 598 7829
EricDavidson@regencycenters.com

RegencyCenters.com.

 

JLL’s Hotels & Hospitality Group led the $49 million sales efforts for the 143-key, Hyatt Place El Segundo select-service hotel in El Segundo, CA

The Hyatt Place Los Angeles / LAX / El Segundo,
 a 143-key, select-service hotel
located at 750 N Nash Street 
in El Segundo, CA

 

 LOS ANGELES, CA – JLL’s Hotels & Hospitality Group has closed the $49 million sale of the Hyatt Place Los Angeles / LAX / El Segundo, a 143-key, select-service hotel in El Segundo, California.

 JLL represented the seller, Washington Holdings, and procured the buyer, El Segundo-based Welcome Group, Inc. The hotel was sold unencumbered by management.

John Strauss

 Located at 750 N Nash St., the Hyatt Place El Segundo is ideally positioned in the coastal city of El Segundo, which features numerous corporate and leisure demand drivers.

 The city is home to prominent defense and aerospace firms as well as three sports teams: the NBA’s Los Angeles Lakers, the NHL’s Los Angeles Kings and the NFL’s Los Angeles Chargers.

James Stockdale

The Chargers are in the process of building a new state-of-the-art practice facility that will further bolster demand in the area.

 In addition, the Hyatt Place El Segundo is close to Los Angeles International Airport and accessible via the 405 and 105 Freeways.

 The Hyatt Place El Segundo, which was recently renovated in 2020, offers traditional guest rooms and king suites that average 369 square feet each.

Melvin Chu

Guests have access to on-site amenities, including The Placery bar and restaurant, The Market grab-and-go outlet, a fitness center, outdoor pool and electrical vehicle charging station.

 In addition, the pet-friendly hotel features a business center and 1,054 square feet of meeting or event space.

 The JLL Hotels & Hospitality team representing the seller was led by Senior Managing Director John Strauss, Managing Director James Stockdale and Executive Vice President Melvin Chu.

The Placery bar and restaurant, El Segundo, CA

“The Los Angeles area benefits from strong corporate and leisure demand that continues to grow as the city diversifies from an entertainment mecca to an international hub for technology, media, finance, trade, manufacturing and more,” Strauss said.

 “El Segundo in particular has experienced substantial growth with major firms located near the hotel including AT&T, Mattel, Boeing, Raytheon, and Spectrum.”

“The Hyatt Place El Segundo is well-positioned for continued growth in a dynamic market,” Chu said. “We’re grateful and honored for the opportunity to represent the seller on this important assignment, and excited for the buyer and the future of this hotel.”

 JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totaling $83 billion worldwide.

The group’s 350-strong global team in over 20 countries also closed more than 7,350 advisory, valuation and asset management assignments.

 Our hotel valuation, brokerage, asset management and consultancy services have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world.

 For more news, videos and research resources on JLL, please visit our newsroom.

  

CONTACT:

Kristen Murphy

Director

 Public Relations, Americas

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