Author: ipgocorp

IRVINE, CA – CoreLogic, a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI) and HPI Forecast for June 2017 which shows home prices are up strongly both year over year and month over month. Home prices nationally increased year over year by 6.7 percent from June 2016 to June 2017, and on a month-over-month basis, home prices increased by 1.1 percent in June 2017 compared with May 2017, according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 5.2 percent on a year-over-year basis from June 2017 to June 2018, and on a month-over-month basis home prices are expected to increase by 0.6 percent from June 2017 to July 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory,” said Dr. Frank Nothaft, chief economist for CoreLogic. “As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

Of the nation’s 10 largest metropolitan areas measured by population, four were overvalued in June according to CoreLogic Market Conditions Indicators (MCI) data. These four metros include Denver-Aurora-Lakewood, CO, Houston-The Woodlands-Sugar Land, TX, Miami-Miami Beach-Kendall, FL and Washington-Arlington-Alexandria, DC-VA-MD-WV. By comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income, the MCI categorizes home prices in individual markets as undervalued, at value or overvalued. Because most homeowners use their income to pay for home mortgages, there is an established relationship between income levels and home prices. The MCI defines an overvalued market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011. With no end to the escalation in sight, affordability is rapidly deteriorating nationally and especially in some key markets such as Denver, Houston, Miami and Washington,” said Frank Martell, president and CEO of CoreLogic. “While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

BETHESDA, MD – Walker & Dunlop announced that it recently closed a $289 million financing with Fannie Mae on 21 multifamily properties across the state of California. Eleven of the 21 properties have project-based Section 8 Housing Assistance Payments Contracts and provide much-needed affordable housing to families and seniors in some of the nation’s highest-cost metropolitan areas. 

The other ten properties all qualified for Fannie Mae’s Green Rewards Program, where new investments in water and electrical systems will reduce the properties’ environmental impact.  

“This large transaction highlights Walker & Dunlop’s expertise in both affordable and green financing,” commented Steven Natale, vice president, who led the Walker & Dunlop team. “All the properties in this large portfolio met either Fannie Mae’s affordable housing or Green Rewards criteria, generating significantly more favorable financing terms for the borrower.  Fannie Mae is very focused on growing the supply of both affordable and environmentally sustainable multifamily properties across the country, and Walker & Dunlop is pleased to be one of their largest partners in financing these types of assets.”

The 21-property portfolio is comprised of 2,189 units located across the state of California in major metropolitan areas including San Francisco, San Jose, San Diego, and Los Angeles. The transaction was sourced by Peggy Griffith, a Walker & Dunlop preferred correspondent.

NEW YORK, NY – Trepp, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, released its July 2017 US CMBS Delinquency Report.

After the Trepp CMBS Delinquency Rate climbed by its highest amount in more than five years last month, the reading rescinded by nearly the same figure in July. The delinquency rate for US commercial real estate loans in CMBS is now 5.49%, a decrease of 26 basis points from June. The July 2017 rate is now 73 basis points higher than the year-ago level.

“We may see the delinquency rate dance around a bit over the next few months as we enter the final innings of the wall of maturities,” said Manus Clancy, Senior Managing Director at Trepp. “There are enough large loans that can be resolved via modification, default, or refinancing that we may see the status of those assets change over the next few months. It’s a fittingly uncertain ending for many loans that have been mired in uncertainty for almost a decade.”

About $1.4 billion in CMBS loans turned newly delinquent in July, which is around $1 billion less than the total that became delinquent in June. Nearly $1.2 billion in previously delinquent loans were cured last month, and roughly $1.7 billion worth of previously distressed debt was resolved with a loss or at par.

Delinquency rates for four of the five major property types fell last month. The multifamily reading shed 101 basis points to 2.91%, which helped the apartment sector reclaim the title of best performing major property type. The industrial delinquency rate dropped 61 basis points to 6.96%. As the only sector with a higher reading in July, the rate for the lodging sector climbed 15 basis points to 3.68%

For additional details, such as delinquency status and historical comparisons, visit Trepp.com.

NASHVILLE, TN – A fund managed by Nashville-based Covenant Capital Group has completed the sale of 500 5th Avenue, a 170-unit apartment community located in downtown Nashville originally built in 1961. The property was formerly known as the Metro Manor Apartments.

The sale comes after Covenant invested over $8.2 million in the project, including spending more than $4 million to renovate and modernize the property.

“We’re pleased to have been able to invest in our hometown by significantly updating 500 5th Avenue and adding modern energy efficiencies to extend its life and ensure its standing as a vibrant community for downtown Nashville residents for decades to come,” said Govan D. White, managing partner and co-founder of Covenant Capital Group.

Covenant purchased the property on June 16th, 2015 for $15,760,000. Selling it on July 28th, 2017 for $27,300,000 to 500 Fifth, LLC.

With Covenant’s more than $4 million enhancements, the project was able to add many features that enhance life at the property, sustaining valuable apartment inventory in Nashville’s downtown market in the process.

This included aesthetic enhancements like a new modern entrance, fitness center, Wi-Fi and business lounge, bike room, leasing office as well as a sky terrace and rooftop pool. In addition, Covenant renovated all apartment interiors with new granite countertops, all new stainless steel energy efficient appliances, new cabinetry and modern finishes.

Covenant’s efforts also went to increasing the energy efficiency and greening the building. It replaced all windows with double-paned energy efficient windows. All existing toilets and faucets were also refitted with low-flow plumbing fixtures which delivered a 30% reduction in water consumption at the property – all of which reduces costs to residents.

Covenant Capital Group, formed in 2001, is a value-add investment manager with an exclusive focus on the acquisition and renovation of apartment communities in major southeastern and mid-atlantic markets. It focuses on transforming and repositioning properties into premier institutional quality assets. Covenant has over $1 billion in real estate assets under management and controls over 9,250 apartment units.

CHICAGO, IL – Monument Capital Management, a division of A-ROD CORP and one of the country’s premier fully integrated real estate investment firms, expanded their footprint into the state of Illinois with the acquisition of Residences at 1550, a 509-unit apartment community located in Mt. Prospect. Located less than one hour from Chicago, the property will be managed by the firm’s sister company, Monument Real Estate Services.

Located at 1550 West Dempster Street, Mt. Prospect, IL, the property is situated on 20 acres and includes one-, two- and three-bedroom garden and townhome style floorplans. It is near a major employment hub, with major companies such as IBM, Automatic Data Processing (ADP), Alexian Brothers Medical Center, Motorola Solutions and others nearby. Amenities include a clubhouse, pool, fitness center, community room, business center and a playground.

Monument’s plans for the property include selective upgrades to the units, and exterior landscaping enhancements.

“We are very pleased to expand Monument’s footprint with this acquisition, our first in Illinois,” said Gregory Lozinak, CEO of Monument Capital Management. “It ideally fits our overall growth strategy and allows us to implement our proven value-add program to this community, which benefits the residents we serve.”

“Mt. Prospect as a whole is a young community, with the median age under 40,” adds Lozinak, “and there is a need for workforce housing noting the many important corporations operating in and near the community.”

Monument Capital Management (MCM) executes transactions on behalf of the three investment funds it directs, as well as acquisitions on behalf of a select number of private investors. Under its first two funds, MCM has more than $325 million of assets under management in multifamily properties Southwest, Southeast, Midwest and Mid-Atlantic regions of the U.S.

MISSOURI CITY, TX – Civitas Senior Living, a Texas-based senior living management and consulting company, announced the recent acquisition of Oyster Creek Assisted Living and Memory Care, an 87-unit assisted living and memory care senior community in Missouri City, Texas. On April 1, 2017, Civitas started managing the property and, as of June 30, transitioned from management to ownership.

“We are proud to be the new owners of Oyster Creek,” Civitas founder and CEO Wayne Powell said. “Oyster Creek’s top-rated Memory Care and engaging Assisted Living programs align perfectly with Civitas’ mission of Passionate Service, Passionate Cleanliness and Passionate Care. It’s a winning combination.”

“The need to provide loving and evidence-based care for residents with a dementia or dementia-type diagnosis is growing exponentially as the Baby Boomer generation enters their golden years. Oyster Creek now joins the list of cutting edge Memory Care communities within the Civitas family. These communities provide the right care for our residents and support for our families through programs like Age-U-Cate’s Dementia Live trainings and simulations. It is a need we are passionate about meeting in all the areas where Civitas has a senior living center.”

The Assisted Living community at Oyster Creek features three floor plans, an engaging activity program, routine housekeeping and laundry service, transportation services and customizable dining services including private dining arrangements for special events. The Memory Care Community at Oyster Creek offers customized service plans based on resident needs and a variety of housing accommodations. Options include private rooms, studio and one-bedroom apartments and companion suites.

Oyster Creek has now become part of the growing portfolio of properties owned and managed by Civitas.

Civitas Senior Living is a Fort Worth, Texas-based management company that specializes in development, acquisitions, operational management, and consulting for senior housing properties, including assisted living, retirement centers, and independent senior living properties.

DALLAS, TX – Starlight Investments announced it has formed a partnership with two globally recognized institutional investors to identify and acquire $1.3 billion of recently constructed, class “A”, garden style, multi-family properties in Atlanta, Georgia, Austin and Dallas, Texas, Denver, Colorado, Orlando and Tampa, Florida and Phoenix, Arizona.

The Partnership will target the acquisition of recently constructed communities in the suburban markets of select major U.S. cities constructed in 2012 or later. Specifically, the Partnership will target submarkets within high-growth cities that demonstrate superior rental income growth potential due to positive multi-family dynamics including compelling population, economic and employment growth.

“We are excited to be co-investing with two prominent institutions and to continue the growth trajectory of the Starlight U.S. Multi-Family platform. The newly formed partnership further validates Starlight’s U.S. multi-family strategy and the returns that have been generated since inception in 2013,” Daniel Drimmer, CEO and President. 

Evan Kirsh, President, Starlight U.S. Multi-Family continued, “Our newly formed investment vehicle is the result of four years of diligent work and the execution of our U.S. multi-family strategy by our team. We expect to commence our acquisition program immediately and to continue to utilize our active asset management program on each acquired asset.”

Since 2013, Starlight U.S. Multi-Family has successfully focused on acquiring garden style communities in the southern U.S., acquiring over $1.6 billion of assets and generating superior returns. Starlight’s investment thesis continues to be driven by net positive migration, job growth and continued shift away from homeownership, which has added approximately 18 million new Americans to the renter pool.

(RECAP: A recent urban planning study by Virginia Commonwealth University yielded a surprising piece of information: The area surrounding Chesterfield Towne Center has the largest imbalance between low-wage jobs and affordable housing in the entire region.)

(RECAP: An increasingly powerful coalition of faith-based activists won a commitment from a majority of the Alexandria City Council on Tuesday to increase support for public housing and affordable housing in the city.)

SARASOTA, FL – Preferred Apartment Communities announced the acquisition of a 280-unit Class A multifamily community in the Sarasota, Florida MSA constructed in 2016 called Luxe Lakewood Ranch. 

“This acquisition demonstrates our continued focus to lower the average age of our premier Class A multifamily community portfolio,” said John A. Williams, the Chairman and Chief Executive Officer for PAC.  Mr. Williams added, “Luxe Lakewood Ranch is ideally located in a superb master planned community, with immediate access to jobs, restaurants, shopping and recreational areas.”

PAC acquired this community through a wholly-owned subsidiary and financed the acquisition utilizing a non-recourse first mortgage loan from Fannie Mae originated by Berkadia Commercial Mortgage LLC. 

The first mortgage loan is approximately $39.3 million, bears interest at a fixed rate of 3.93% per annum, matures in August 2027 and amortizes based on a 30-year schedule.  There are no loan guaranties provided by PAC or our operating partnership.

Preferred Apartment Communities was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States.  As part of its business strategy, they enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities and other properties.