Author: ipgocorp

LAS VEGAS, NV – MG Properties Group, a private San Diego-based real estate investor and operator, announced the acquisition of Sedona at Lone Mountain and Prelude at the Park Apartments in Las Vegas, Nevada. The two separate acquisitions total 641 units and approximately $68 million.

Sedona at Lone Mountain Apartments was built in 1999 and consists of 321 units in North Las Vegas. The property was purchased for $34,668,000 and required the assumption of existing Freddie Mac loans. The seller was represented by Executive Managing Directors Doug Schuster and Curt Allsop, Director Vittal Ram and Associate Angela Bates of ARA, A Newmark Company.

Prelude at the Park Apartments (fka Victory Village) was built in 1997 and consists of 320 units in desirable Henderson, NV. MGPG plans an extensive renovation of common areas and unit interiors.  The property was purchased for $33,500,000.

The seller was represented by Senior Vice President Tom Naseef and Vice President Garry Cuff of Colliers International. The acquisition was financed with a $21.97M Fannie Mae Loan arranged by Brian Eisendrath and Cameron Chalfant of CBRE.

According to Paul Kaseburg, Chief Investment Officer at MGPG, “These acquisitions are an excellent addition to our existing Las Vegas portfolio. Despite modern designs, they both present a compelling value-add opportunity and were acquired at a significant discount to replacement cost.”

Sedona at Lone Mountain and Prelude at the Park mark MG Properties Group’s 12th and 13th acquisition in the past 12 months. The thirteen acquisitions totaled approximately 3,600 units and $571,000,000 in combined purchase price. The company is targeting further acquisitions in Arizona, California, Colorado, Nevada, Oregon, and Washington. 

MCLEAN, VA – Freddie Mac released its Insight for April, which uses the example of San Francisco to explore where low- and middle-income families live in high-cost metros, and how well. Even the highest-cost cities need a full complement of middle-income workers — police, firefighters, schoolteachers, accountants, and the like — in order to function.

The March Insight provides a ZIP-code-level look at some of the factors that drive the location decisions of ordinary families trying to live in one of the most expensive metros in the U.S. Can they buy a house or must they continue to rent? How long and expensive is their commute to work? Are high-crime and low-quality schools part of the price of living in an almost-affordable pocket of the San Francisco metro?

Economic Highlights

The overall cost of living in the San Francisco metro is roughly 50 percent higher than the national average. But housing stands out. The median sales price of a home in the U.S. in 2015 was just over $200,000. In San Francisco, the median sales price was $700,000 — more than three times as much. The median asking rent in 2015 in San Francisco was almost twice the median for the U.S.

Salaries in San Francisco are higher than the U.S. average, but they don’t make up for the higher cost of housing, especially for lower-income service workers.

The median family in San Francisco spends 32 percent of its income on housing, putting it near the high end of the U.S. distribution; however, these affordability metrics don’t identify where a family can live, buy or rent, in the metro area. That decision involves tradeoffs between the cost burden of housing, the time consumed in commuting, and the quality of the neighborhood a family chooses.

Where service workers live, and how well

Despite the high cost of living in San Francisco, the share of service workers in the San Francisco area is similar to the share in the rest of the U.S.

A ZIP-level analysis reveals that service-workers in San Francisco tend to cluster in three types of locations:

In San Francisco: These areas provide easy access to the central business district and the amenities of city life. Two-thirds of the residents are renters, most likely unmarried or married without children. Crime is relatively high in these areas.

In the near-East Bay: Service workers living on the western border of Alameda County can use the Bay Area Rapid Transit (BART) system to commute to San Francisco without the expense of a car and parking. Two-thirds of the residents are renters; crime, poverty, and the unemployment rate are very high; and school test scores are low.

In the distant-East Bay: BART provides limited service to northern and eastern Contra Costa county. This is long-car-commute territory. In exchange, homeownership is higher and crime and poverty are lower. However, school test scores are low.

Where will the next generation of service and middle-skill workers come from?

Many low- and middle-income families in the San Francisco metro are “legacies.” They bought their homes decades ago before housing became so expensive. Many wouldn’t be able to move to San Francisco today.

Freddie Mac’s Single-Family and Multifamily businesses have been working with city and county governments, lenders, and developers to address the challenges of affordability in the San Francisco metro area.

Sean Becketti, Vice President and Chief Economist stated, “The nature of the San Francisco Bay Area’s urban ecosystem will be shaped in large part by how it reacts to the likely net loss of lower- and middle-income families over the next few decades. City and county government programs to subsidize or otherwise sustain housing affordability for lower- and middle-income families will play an important role in shaping the future of the Bay Area.”

MCLEAN, VA – Gables Residential has begun construction on Gables Pointe 14, a 370 apartment home community located in the heart of the Rosslyn-Ballston Corridor in Arlington, Virginia. With urban living being a focus, the community is located within walking distance to the Court House & Rosslyn Metro stations and is less than two miles from the Georgetown/West End area in Washington DC.

Gables Pointe 14 will include one of the largest and best amenity packages in the area. Plans include a private outdoor courtyard flanked on two sides by approximately 16,000 square feet of modern amenities. Additionally, the project will include a rooftop recreation area, resident lounge, dining area and pool with panoramic views of downtown DC.

Consisting of a blend of a six-story building at the intersection of 14th Street North and North Rolfe Street and a twelve-story building along North Fairfax Drive, Gables Pointe 14 will offer 370 apartment homes. The mix will include studios and one/two/three bedroom apartment homes with varying floorplans. The floorplans will range from 487 square feet to 1,553 square feet overall. A below-grade garage will also be a part of the building structure.

“The Rosslyn-Ballston corridor is a highly desirable area”, shared Jorgen Punda, Regional VP of Investments for Gables Residential. “Our site involved the assemblage of thirteen lots, owned by both private individuals and Arlington County. It was a successful collaboration and we believe it is a great opportunity to deliver a “best in class” apartment home community, with unparalleled amenities within walking distance to the Court House & Rosslyn Metro stations and a variety of dining and entertainment options.”

Gables Residential is an award-winning, vertically integrated, real estate company and privately held REIT specializing in the development, construction, ownership, acquisition, financing and management of multifamily and mixed-use communities. Gables manages over 31,000 apartment homes and approximately 550,000 square feet of retail space and has received national recognition for excellence in development, construction, management, sales, marketing, learning and development, benefits and corporate accommodations.

NEW YORK, NY – Rose Associates and Friedland Properties announced the topping out of 228 West 80th Street, a 19-story, 72-unit luxury residential tower located in Manhattan’s Upper West Side. 228 West 80th Street will be comprised of two- and three-bedroom rental apartments, and it will feature spectacular amenities specifically designed for children, teens, and adults.

“We are pleased to celebrate the topping out of 228 West 80th Street and to embark on the next phase of construction, as scheduled, with initial occupancy less than a year away,” said Amy Rose, co-president of Rose Associates. “The property is designed to embody the urban elegance of the Upper West Side. Its spacious apartments will offer modern conveniences within a timeless design.”

The exteriors of 228 West 80th Street were designed by Stephen B. Jacobs Group, PC with interiors by Stephen Alton Architect, PC. It is a development of New York-based Friedland Properties. Construction began at the site in October of 2015 The building will include a children’s room, a teen game room, a resident’s lounge and a landscaped rooftop lounge with glass enclosure and outdoor recreation areas. There will also be a bowling alley, golf simulator, half basketball court, and a full gym with a yoga studio.

“It’s a thrill to move one step closer to the completion of this beautiful building,” said Elizabeth Friedland Meyer, a principal of Friedland Properties. “The Upper West Side has always been one of New York’s finest neighborhoods and we are confident that 228 West 80th Street will be recognized as the most exceptional rental building in all of New York City.”

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

The Trepp CMBS Delinquency Rate moved higher again in March, as loans from 2006 and 2007 continue to reach their maturity dates without being paid off via refinancing. The delinquency rate for US commercial real estate loans in CMBS is now 5.37%, up six basis points from February. This is the eleventh monthly rate increase in the past 13 periods. The delinquency rate is now 115 basis points higher than the year-ago level.

Nearly $2.0 billion in CMBS loans became newly delinquent in March, as the total was once again the leading driver for the heightened rate. About $1.1 billion in CMBS loans that were previously delinquent paid off with a loss or at par last month. Over $500 million in loans were cured in March, though that figure is down by about $350 million month-over-month.

“With more and more loans turning delinquent after their maturity dates, another monthly increase in the CMBS delinquency rate has become par for the course,” said Manus Clancy, Senior Managing Director at Trepp. “This will not last forever, but there is so much debt coming due in the immediate future that cannot be refinanced via CMBS because not many loans are making their way into new deals.”

Delinquency rates for three of the five major property sectors rose in March, including the industrial segment, as that reading ascended 109 basis points to 7.03%. The lodging and office rates each increased 27 basis points to 3.70% and 7.38%, respectively. The multifamily delinquency reading shed 22 basis points to 2.60% last month, as that sector remains the best performing major property type.

For additional details, such as delinquency status and historical comparisons, download the March 2017 US CMBS Delinquency Report at Trepp.com.

NEW YORK, NY – Mortgage rates fell to the lowest levels in nearly three months, with the benchmark 30-year fixed mortgage rate now 4.24 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.26 discount and origination points.

The larger jumbo 30-year fixed also dropped, to 4.19 percent, while the average 15-year fixed mortgage rate inched lower, to 3.48 percent. Adjustable mortgage rates pulled back as well, with the 7-year ARM retreating to 3.63 percent and the 10-year ARM sliding to 3.82 percent.   

Mortgage rates moved lower this week in response to some disappointing economic reports, choppiness on Wall Street, and the release of the Federal Open Market Committee’s March meeting minutes. In addition to weak economic growth in the first three months of the year and sluggish consumer spending, auto sales are tailing off after being a source of strength for the economy over the past few years. The real blow was when the Fed meeting minutes referenced a belief by some meeting participants that the stock market was ‘quite high,’ a potential warning shot to investors and reminiscent of former Fed Chair Alan Greenspan’s famous ‘irrational exuberance’ speech in 1996. All of this served to fuel demand for safe haven Treasury securities, driving bond yields and mortgage rates lower.

At the current average 30-year fixed mortgage rate of 4.24 percent, the monthly payment for a $200,000 loan is $982.71.

SURVEY RESULTS

30-year fixed: 4.24% — down from 4.30% last week (avg. points: 0.26)

15-year fixed: 3.48% — down from 3.49% last week (avg. points: 0.21)

5/1 ARM: 3.45% — down from 3.49% last week (avg. points: 0.29)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in 10 top markets. For a full analysis of this week’s move in mortgage rates, go to www.bankrate.com

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. More than half of this week’s panelists, 55 percent, expect mortgage rates to remain more or less unchanged in the coming week. A bit more than one-third, 36 percent, forecast an increase and just 9 percent predict further declines in mortgage rates over the next week.

(RECAP: The new apartment building came out of a partnership between the Richmond-based Fountainhead Development and the Piedmont Housing Alliance. With the city grant, low-income house tax credits purchased by Bank of America and a loan from the Virginia Housing Development Authority, Fountainhead — which developed the Blue Ridge PACE center — developed Carlton Views to accommodate people with disabilities.)

(RECAP: A local nonprofit is looking for qualified buyers for two affordable housing units, and will hold a lottery this Friday to find new owners. The affordable condo units were built as part of an agreement between developer Craftmark and Arlington County. Eligible applicants must complete a Virginia Housing Development Authority homebuyer education class.)

(RECAP: At least 7,400 low-income, elderly and disabled Virginians and their families would lose help with housing under President Donald Trump’s efforts to exorcise federal bloat, analysts say. The cuts unveiled as part of a spending plan for the next fiscal year would slash funds that are used to staff and repair public housing communities and reduce the number of vouchers issued to some of Virginia’s most vulnerable families.)

WASHINGTON, DC – Walker & Dunlop announced that it originated loans totaling $183 million for Park Chelsea and 2M, two LEED certified multifamily properties in Washington, D.C. Walker & Dunlop is one of the most active lenders utilizing environmental rewards programs to obtain pricing breaks and structural enhancements for its clients owning and developing properties that meet certain sustainability requirements.  

Walker & Dunlop Managing Directors Brendan Coleman, Keith Melton, and David Strange led the origination team, which arranged the transactions through Fannie Mae’s Green certification execution and the U.S. Department of Housing and Urban Development’s (HUD) refinance program on behalf of repeat borrower WC Smith, one of the leading developers of affordable housing in the Mid-Atlantic region.  

Mr. Coleman commented, “These two transactions and the success these properties have seen illustrate renters’ strong desire for affordable rental housing that is also environmentally conscious. We are fortunate to work with WC Smith, one of the most well-respected developers and operators of affordable housing communities, on these financings. WC Smith is very focused on increasing the supply of affordable housing in the D.C. market, and the 2M transaction demonstrates that affordability can be achieved through environmentally friendly development and best-in-class amenities.”

Chairman and CEO of WC Smith, Chris Smith, stated, “The Walker & Dunlop team’s expertise and deep understanding of the nuances of Green financing options available in the markets resulted in major savings for our company. This ultimately enables us to reach our goals of providing the local community with much-needed housing options.”

2M is a LEED Gold certified, mixed-income rental community in NoMa, a prime location near historic Union Station. 93 percent of the 2M’s units are dedicated to low income tenants, including Section 8 voucher holders. The refinance loan will provide very significant annual debt service savings for WC Smith, just two years after closing the original HUD development loan. The property was 99 percent leased at closing, demonstrating the area’s strong demand for affordable rental options. 2M also features upscale amenities including a rooftop pool, grilling area, indoor fitness center and basketball court, and 24-hour concierge.

Park Chelsea is the first of three properties that will be known as The Collective, a rental community located in Washington, D.C.’s Capitol Riverfront. As a LEED Silver building, the property qualified for Green Building Certification financing, which enabled Walker & Dunlop to structure discounted pricing, maximize loan proceeds, and achieve an accelerated closing timeline. Park Chelsea was 75 percent leased at closing and has been so successful since opening that it was awarded Delta Associates’ 2016 best lease-up pace for a D.C. apartment community.