Author: ipgocorp

NEW YORK, NY – S&P Dow Jones Indices released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released for November 2016 shows that home prices continued their rise across the country over the last 12 months.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.6% annual gain in November, up from 5.5% last month. The 10-City Composite posted a 4.5% annual increase, up from 4.3% the previous month. The 20-City Composite reported a year-over-year gain of 5.3%, up from 5.1% in October.

Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over each of the last 10 months. In November, Seattle led the way with a 10.4% year-over-year price increase, followed by Portland with 10.1%, and Denver with an 8.7% increase. Eight cities reported greater price increases in the year ending November 2016 versus the year ending October 2016. 

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in November. Both the 10-City Composite and the 20-City Composite posted 0.2% increases in November. After seasonal adjustment, the National Index recorded a 0.8% month-over-month increase, while both the 10-City and 20-City Composites each reported 0.9% month-over-month increases. Ten of 20 cities reported increases in November before seasonal adjustment; after seasonal adjustment, all 20 cities saw prices rise.

“With the S&P CoreLogic Case-Shiller National Home Price Index rising at about 5.5% annual rate over the last two-and-a-half years and having reached a new all-time high recently, one can argue that housing has recovered from the boom-bust cycle that began a dozen years ago,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The recovery has been supported by a few economic factors: low interest rates, falling unemployment, and consistent gains in per-capita disposable personal income. Thirty-year fixed rate mortgages dropped under 4.5% in 2011 and have only recently shown hints of rising above that level. The unemployment rate at 4.7% is close to the Fed’s full employment target. Inflation adjusted per capita personal disposable income has risen at about a 2.5% annual rate for 30 months.

“The home prices and economic data are from late 2016. The new Administration in Washington is seeking faster economic growth, increased investment in infrastructure, and changes in tax policy which could affect housing and home prices. Mortgage rates have increased since the election and stronger economic growth could push them higher. Further gains in personal income and employment may increase the demand for housing and add to price pressures when home prices are already rising about twice as fast as inflation.”

More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.

AMARILLO, TX – PinPoint Senior Living and LifeWell Senior Living announced the start of construction for the newest location of their Concierge Senior Living Community – The Legacy at Town Square in Amarillo, Texas.

The state-of-the-art community will be a two-story, 86-apartment community offering Independent Living, Assisted Living, and Memory Care. The community features an innovative design that provides seniors endless opportunities to grow by providing as little or as much care as needed, depending on each resident’s needs.

The Legacy at Town Square, located at 9700 Hillside Rd. in Amarillo, TX, began construction in December 2016 and is set to open in late Fall of 2017.

“Although it is not a deep market with huge unmet demand, Amarillo is a legendary Texas town with tremendous history and character,” said Carter Perrin, Chief Development Officer, PinPoint Senior Living. “We closed on our site last year and have been waiting for a few market signals in order to start.”

“We are beyond excited to officially be underway in Amarillo,” said Dean Mattsson, Chief Operating Officer of LifeWell Senior Living. “The community will be introduced to something they have not yet seen before. Every element of technology we employ is designed to improve quality of life as well as connect our residents to their loved ones.”

PinPoint Senior Living is a leader in the senior housing industry—turning the traditional idea of a facility into a community. With nearly 14 communities open or under development across the United States, PinPoint Senior Living’s senior communities utilize advanced technology and design to keep residents safe, healthy, and active. The designs feature vibrant architecture and furnishings, inviting common areas, and welcoming residential units.

SACRAMENTO, CA – AMCAL Equities announced that it closed financing and started construction on The Crossings—a new 225-unit, student housing community that will provide 750 beds to serve the students of California State University, Sacramento (CSUS). Located at 2920 Ramona Avenue, the new community, slated for completion in August 2018, will feature state-of-the-art amenities and pedestrian-friendly proximity to the CSUS campus, only 0.2 miles from the University’s south entrance.

AMCAL Equities, LLC, developer and owner of the $75 million project, funded the student housing development with $22.5 million in equity investment funding from Irvine-based Anchor Real Estate Capital and a $50 million construction loan from JPMorgan Chase.

The University, which does not require students to live on campus, currently supplies beds for only 1,672 students, or 5.5% of its undergraduate student body. The limited on-campus inventory, increasing off-campus rental rates and a low 2% vacancy rate near the Sacramento campus demonstrate the difficulties students face when seeking housing.

To increase the supply of area student housing, CSUS trustees adopted a 20-year campus master plan in 2015 that aims to increase the number of campus beds to 2,900 (representing just 10% of its 32,000 student body) by 2035. The university is currently constructing a 416-bed residence hall, but total on- and off-campus affiliated housing accounts for only 2,438 students.

High demand and lack of on- and off-campus housing in the area will make The Crossings a top go-to residential choice for CSUS graduate and undergraduate students, according to Percival Vaz, CEO of AMCAL.

Designed by leading student housing architect Humphreys & Partners Architects, LP, The Crossings is being constructed within the 240-acre Sacramento Center for Innovation Specific Plan, an area that is designated to foster the exchange of technical knowledge and expertise between students, faculty and innovative businesses and technology companies. Responding to this city initiative, The Crossings will house an 11,000-square-foot Center for Innovation as a central commons for students, faculty and businesses to exchange knowledge, build connections and stimulate innovation. It will also offer space for retail shops, an eatery and convenience stores.

AMCAL General Contractors, Inc. will oversee construction of the 9.05-acre student housing community that will be built to LEED silver standards and will feature energy-efficient elements such as Energy Star appliances. The community will include three five-story wood-framed, elevator-equipped student housing buildings totaling 334,250 square feet; a 14,800- square-foot clubhouse with outdoor basketball court and a resort-style swimming pool; and the Center for Innovation.

“Quality student housing is greatly needed in the CSUS campus area,” said Vaz. “We are pleased to provide this amenity-rich, eco-friendly housing for the university and to help students succeed and thrive.”

A $4.7 million Ramona Avenue roadway improvement project currently under construction will give The Crossings’ student residents direct access from their homes to the CSUS campus via a new lighted sidewalk, bike path and other updated roadway features. The Ramona extension will pass underneath the existing US Highway 50 and railroad tracks and is scheduled to be completed by the City of Sacramento and Caltrans before The Crossings’ scheduled debut in August 2018.

Students at The Crossings will live in residential suites with a full-sized kitchen, living area and one to four bedrooms. Each student will have his or her own private bedroom and bathroom individually keyed for privacy and security. All student residences will be fully furnished and feature hi-speed wi-fi for internet connectivity.

Surface parking will be provided for 432 cars and 475 bicycles. All buildings will be protected with an automated fire/life safety system, access controlled-entries and video surveillance system.

The Crossings is scheduled to begin leasing by August 1, 2017, and will be property-managed by Asset Campus Housing, a leader in the management of student housing nationwide.

HOUSTON, TX – Westmount Realty Capital announced the acquisition of London Park, a well-constructed, Class “B” garden-style apartment property located at 14545 Bammel North Houston Road. Built in 1982, the well-maintained community has 257 one and two-bedroom units in 21 two-story buildings. Westmount is rebranding the 209,143 square foot apartment community as Westmount at London Park.

“Westmount has acquired a well-positioned, vintage Class ‘B’ property with significant value-add opportunity through London Park,” Michael Anderson, senior director-acquisitions at Westmount said. “The property is currently 95 percent occupied and provides the opportunity to achieve above-market rent growth by renovating the unit interiors and improving property operations.”

In addition to the improvements that have already been made, Westmount plans to further improve unit interiors to include new lighting and plumbing fixtures, new cabinets, upgraded flooring, faux granite countertops and two inch faux wood blinds. Westmount has had success across its portfolio in boosting rents from these types of upgrades and has purchased more than 3,300 multifamily units in the state of Texas over the last five years.

Located on the north side of Houston on Bammel North Houston Road, Westmount at London Park features tremendous drive-by visibility and access to major thoroughfares, including Cypress Creek Parkway (FM 1960), Highway 249, Interstate 45 and the Sam Houston Tollway, affording residents convenient access to the greater Houston metropolitan area.  Westmount at London Park is near three main shopping districts, Champions Villiage, Willowbrook Mall and North Oaks Shopping Center. Additionally, the property is only 3.5 miles from Donald R. Collins Park, a 55-acre park offering lighted sports facilities, nature trails, a skate park and fishing.

“The acquisition of London Park has allowed Westmount to strengthen its presence in Houston,” Clifford A. Booth, president and CEO of Westmount said. “As a major corporate center, Houston is home to 23 Fortune 500 companies and the property’s location allows residents to easily commute to the city’s major employers.”

One of the area’s largest employers, Schlumberger, which supports nearly 10,000 local jobs, is approximately seven miles from Westmount at London Park. The George Bush Intercontinental Airport and ExxonMobil’s Houston Campus are both approximately 13 miles from the property. Interstate 45 enables residents to quickly reach downtown Houston, which is home to large employers including MD Anderson Cancer Center, Chevron and JP Morgan Chase.

Financing was provided by Berkadia.

Westmount Realty Capital is a time-tested, privately held, Dallas-based commercial real estate company that has achieved exceptional performance, with a core team in place, for more than 30 years.  Westmount is seen as an innovator and leading edge company in the industry and is a trusted partner of numerous U.S. and foreign institutional and private capital sources. The company is active nationally, specializing in value add and opportunistic investments, and has navigated successfully through multiple market cycles.

ORLANDO, FL – In 2016, Florida’s economy outperformed the nation in part because of better job creation, according to several economists who spoke to a standing-room-only crowd of about 500 Realtors at the 2017 Florida Real Estate Trends event last week during Florida Realtors Mid-Winter Business Meetings.

National Association of Realtors Chief Economist Lawrence Yun noted that the pace of U.S. home sales in 2016 at 5.5 million was “the best in a decade.” Since that’s still nowhere near the 7.2 million sales peak in 2006, however, it leaves room for continued growth in 2017. And while interest rates are trending higher, it hasn’t had a dampening effect on home sales.

“A 4.2 percent mortgage rate is still a great rate,” he said. “As long as we’re around the 4 to even 5 percent mortgage rate, home sales are likely to stay on pace. As mortgage rates rise, job creation – which Florida excels at – could be a great neutralizer and good for home sales. In fact, Florida is outperforming the country because of better job creation.”

Other speakers who shared their views on 2017 included Dr. Elliot Eisenberg, a nationally known economist and a former senior economist with the National Association of Home Builders (NAHB); Michael Johnston, Florida regional sales manager, Wells Fargo Home Mortgage; Dr. Julie Harrington, director of Florida State University’s Center for Economic Forecasting and Analysis; and Dr. Brad O’Connor, chief economist for Florida Realtors.

“The good news, here in Florida, you’re in the right place,” Eisenberg said. “The South is the right division to be in – the economic recovery here has been much more robust. Florida is doing fine economically, unemployment is OK and foreclosures are diminishing.”

He agreed with Yun that while mortgage rates will continue to rise this year – albeit slowly – the markets will be fine as long as jobs are being created.

“Housing is improving, but in fits and starts,” Eisenberg said. “There’s not enough inventory of homes for sale, and builders aren’t building, especially at the entry-level. Bigger houses are being built, but it’s not profitable for builders to construct more affordable homes.”

He cited worker shortages, burdensome land-use regulations and costs – land, labor and regulation – as some of the constraints homebuilders face when it comes to building entry-level homes. “We have to try a myriad of solutions, but getting the land costs down and easing land-use regulations will be the single most important factor in solving this issue,” he said.

According to Eisenberg, forces at work in Florida and across the U.S. that are dampening real estate sales include:

Low inventory – December 2016 data, which is just a few days old, shows existing single-family home inventory nationwide at a 3.6 months’ supply; in Florida, it’s at a 3.9-months’ supply. A 6-months’ supply is generally considered a market that’s balanced between buyers and sellers.

New model of renting – Six million single-family units have been taken off the market because institutional investors snapped up so many homes during the Great Recession and created a new method of renting.

Mortgage rate lock – Many people don’t want to sell and lose the really low mortgage rate they’re currently paying.

When it comes to financing, lenders are in a technology race to provide a digital, user-friendly experience that makes the mortgage process easier for the customer, said Michael Johnston, Florida regional sales manager for Wells Fargo Home Mortgage.

“Today, 42 percent of homebuyers are millennials,” he said, “and with 92 million more millennials coming up, it will be an even bigger part of the housing market over the next five years. A recent survey found that 93 percent of those age 18-34 intend to buy a house sometime in their future. Millennials are always online, so creating a digital mortgage experience for them is critical.”

Johnston shared research showing millennials value the expertise of Realtor professionals during the home buying process. “While they will go online to do home shopping, they do want to consult a trusted advisor along the way,” he added.

The condominium market is an important part of the overall real estate market and often offers an affordable option for buyers, according to Johnston. “In Florida, the condo market is healthy and robust,” he said. “Condos make up 28 percent of all home sales in Florida; nationally, it’s 12 percent.”

Looking at all of 2016, Florida Realtors Chief Economist Brad O’Connor said the statewide existing homes market remained stable but was also relatively “flat,” though part of the reason for that was the comparison as “2015 was a pretty darn good year, sales-wise.”

He also pointed out that a shortage of housing inventory in markets across the state, particularly around the $200,000 price range and under, is impacting closed sales and putting pressure on median prices. Another factor: Sales of distressed properties continue to fall.

“In 2015, 10 percent of Florida’s housing inventory was distressed at the end of each month,” O’Connor said. “This past year, it’s been 5 percent, and it’s going to keep going down into 2017.”

DALLAS, TX – Pure Multi-Family REIT announced the successful closing of the previously announced 288 unit multi-family apartment community, located in the Allen sub-market of Dallas, Texas, for a purchase price of $40.0 million.

Lansbrook was constructed in 2002 and consists of 288 residential units averaging 961 square feet. It has value-add potential and is located in the highly desirable residential area of Allen, Texas, one of the fastest growing cities in Texas.

According to the Allen Economic Development Corporation, Allen, Texas is the 16th fastest growing city in the U.S. and the 2nd fastest growing city in the Dallas Fort Worth Metro Area. The median household income in Allen is $105,679 (75% greater than Dallas Fort Worth’s median income).

Lansbrook is situated in the highly acclaimed Allen Independent School District, and easily accessible as it is positioned along Benton Drive just a few minutes from the Central Expressway (US Route 75) and the US Route 121 interchange, one of the most heavily travelled interchanges in Far North Dallas.

Pure Multi-Family funded the purchase of Lansbrook with proceeds from the previously announced profitable sale of Fairways at Prestonwood, which closed on November 17, 2016, and new first mortgage financing in the amount of $16.5 million.

The first mortgage financing bears a fixed interest rate of 3.27% per annum for a term of 5 years. The purchase price represents a stabilized going-in capitalization rate of 5.3%.

Steve Evans, CEO, said, “The Lansbrook acquisition demonstrates our ability to execute once again on our value-add strategy while achieving solid cash flow in a highly desirable market.”

Upon completion of the acquisition of the Lansbrook, Pure Multi-Family’s portfolio consists of 17 multi-family properties comprising an aggregate of 5,793 residential units, situated on 310 acres of land.

(RECAP: Teachers, store clerks and restaurant servers struggle to find affordable homes in Virginia Beach, according to a study City Council members discussed at a recent work session. Many of those residents don’t make enough to pay $1,200 a month in rent – the median rate. Now, the city has to decide if it wants to encourage fixing up older homes – which would eventually bring in more real-estate tax money to support affordable housing programs – or, if money is better spent creating higher wage jobs so people can afford what’s already here. Consultants from Virginia Tech’s Virginia Center for Housing Research presented highlights of its study at a work session Jan. 24. It included addressing housing costs, helping aging neighborhoods and keeping millennials and baby boomers in the city.)

(RECAP: Paul Schmelzing, a visiting scholar at the Bank of England from Harvard University, has studied 800 years of bond markets history and says the most relevant parallel with today’s environment is with the late 1960s under U.S. President Richard Nixon. The U.S. was emerging from a prolonged period of low inflation, the jobs market was tightening and a new pro-business president had raised expectations of fiscal expansion. It was a bruising time for bond investors. U.S. bonds lost 36 percent in real price terms between 1965 and 1970, while annual consumer price inflation more than tripled in the period, to 5.9 percent from 1.6 percent. As the world’s biggest bond market, what happens to U.S. Treasuries usually sets the tone for bonds across the world. Based on historical standards, bonds could be set for double-digit losses, he said.)

SAN ANTONIO, TX – H.I.G. Capital, a leading global private equity and alternative asset investment firm with $21 billion of equity capital under management, announced that its affiliate, H.I.G. Realty Partners, has acquired Windsor House Apartments, a 322-unit apartment complex located in San Antonio, TX.

Ira Weidhorn, Managing Director of H.I.G. Realty, commented, “Windsor House presents an opportunity to create value through an extensive upgrade program in a market that has seen a considerable increase in demand in recent years.”

Built in 1997, Windsor House Apartments is located in Northern San Antonio, in close proximity to several major employment drivers including the South Texas Medical Center, a 900 acre medical complex that is home to 10 major hospitals and nearly 80 clinics.

H.I.G. Realty Partners is the real estate platform of H.I.G., managing $1.6 billion in capital commitments focused on small-to-mid cap real estate assets across property types located in the U.S. and Europe.

H.I.G. Realty Partners targets the acquisition of value-add investments, employing a hands-on, operationally focused approach that seeks to generate substantial cash flow and asset appreciation through rehabilitating, redeveloping, repositioning and rebranding assets that have been capital starved and/or poorly managed.

CHARLESTON, SC – Greystar Real Estate Partners, a global leader in the investment, development, and management of rental housing, announced that it has filed an application to place a development capital certificate (CKD) on the Mexican Stock Exchange (BMV).

Greystar is seeking to raise up to MXN 4.0 billion (approximately US $194.0 million) in 2017 from Mexican pension funds to develop and manage high-quality rental residential housing in key Mexican markets including Mexico City, Monterrey, Guadalajara and the Bajío region.

“Greystar’s planned capital raise in Mexico reflects our commitment to further advance the company’s international growth strategy and our objective to build world-class residential rental housing globally,” said Bob Faith, Chairman and CEO of Greystar. “Our history in the market together with our rental housing expertise positions us well to capitalize on the many opportunities we see throughout the country.”

Greystar entered the Mexican market in 2012 and has since established a strong local presence. With an office in Mexico City that houses dedicated investments, development and operations teams, Greystar is currently overseeing the development of more than 1,500 residential units and has built a pipeline exceeding additional 1,500 residential units.

“We will leverage our world-class local team and the support of our global platform to source and execute the best residential development opportunities in the market,” said Eduardo Orozco, Greystar’s Managing Director of Investments for Latin America. “We are excited to work with local Afores to generate attractive returns contributing to Mexican employee pensions.”

Greystar aims to leverage its rental housing expertise and deep local market knowledge to generate attractive risk-adjusted returns for its investors and an unmatched living experience for its residents. Globally, Greystar operates more than 400,000 rental units across 160 markets with an ownership interest in assets worth over USD $14.0 billion.