Author: ipgocorp

(RECAP: Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers. The new administration on Friday said it’s canceling a reduction in the FHA’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year. The reversal comes after Trump’s team criticized the Obama administration for adopting new policies as it prepared to leave office. Last week, Obama’s HUD secretary, Julian Castro, said the FHA would cut its fees. The administration didn’t consult Trump’s team before the announcement. Republicans have argued in the past that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults.)

SALEM, MA – Silver Street Development Corporation (SSDC) announced the addition of Pequot Highlands, a 250-unit development located in Salem, MA, to its portfolio, an acquisition that was completed in the face of a myriad of difficulties to the satisfaction of both the selling party and the involved local and state agencies through the course of a concise 7-month period of negotiations and deal-structuring.

The final architecture of the deal, which closed December 22nd, 2016, sees Silver Street committing to $65M in total development costs, $20M of which are apportioned for a large-scale rehabilitation, with a 100% increase in affordability (from 100 to 200 low-income units) and financing via Tax Exempt Bonds issued by the Mass Housing Finance Authority (MHFA).

Ever since its construction in 1971, Pequot Highlands has been an important source of affordable housing for the community of Salem, MA. As a flagship property of the prior owner it boasted amenities including playgrounds, gazebos, a basketball court, a computer center, and views of both the ocean and the Boston skyline, but in recent years it had been beset by architectural issues due to the deterioration of the brick façade of the mid and high-rise towers which together constitute the complete residential offerings of the property.

Seeing an opportunity to preserve an important asset while extending affordability to the community, Silver Street, traditionally adept at navigating the complex financing and government regulatory issues inherent in uniquely challenging acquisitions, was able to structure the deal with the following general terms, ensuring maximum value for the seller while expanding and extending affordability and committing substantial funds to a robust rehabilitation of the property: $65M committed in total development costs; $20M committed to rehabilitation costs; 125 units (50%) subsidized via a continuation of Project-Based Section 8 vouchers on a 15-year contract with the SHA; 200 units (80%) affordability restricted via the Tax Credit Program until 2098; Financing secured through Tax Exempt Bonds issued by MassHousing; and Equity investment by Boston Financial Investment Management.

This marked expansion of affordability at Pequot Highlands was the direct result of the flexibility and cooperation of the MassHousing. MassHousing recognized Pequot’s status as a critical asset in need of large-scale rehabilitation and, being well aware of Silver Street’s ability to both complete the acquisition and see through to fruition the rehabilitation process, financed the project via Tax Exempt Bonds despite the scarcity in the state of available funds throughout 2016. “We could not have closed this complex acquisition,” says Chris Poulin, principal, “without the deep understanding, commitment and support of Mass Housing, DHCD, the Salem Housing Authority, and Boston Financial.”

The rehab will allow for a $11M façade overhaul, which will see the red brick popular in the 1970s replaced with modern, insulated, and energy efficient metal paneling and windows, and over $9M in updates to both common and private space within the complex, the façade delivering a projected 10% reduction in energy use alone. Silver Street is thus aiming with this rehabilitation to reposition Pequot Highlands within the community, transforming the property into a contemporary vision of prideful community living.

The finesse seen throughout the structuring of the Pequot Highlands’ acquisition and rehabilitation illustrates both the vitality and commitment of Silver Street’s partner network and SSDC’s ability to maneuver despite complex and demanding circumstances, demonstrating an approach to deal-making within which investors, government agencies, and, current and future tenants all stand to benefit.

WILDOMAR, CA – MG Properties Group, a private San Diego-based real estate investor and operator, announced the acquisition of the Santa Rosa Apartments in Wildomar, California.

Built in 2008, Santa Rosa offers 320 luxury apartment homes in a desirable low density two-story walk-up design. Santa Rosa is adjacent to the Inland Valley Medical Center, Kaiser Permanente, and Southern California Edison’s regional service center, and is close to shopping, Interstates 15 and 215, and a future 80-acre community college campus.

The property offers an optimal mix of large one-, two- and three-bedroom floorplans that average approximately 1,000 square feet of living space and feature a garage for each apartment home.  MG Properties Group plans to perform modest interior renovations and to refresh the property’s common areas. 

The property was purchased for $74,500,000.  The sellers were represented by Paul Runkle, Eric Chen and Bob Patterson of CBRE. The acquisition was financed with a $46.68M 10-year-fixed-rate Fannie Mae loan arranged by Brian Eisendrath and Cameron Chalfant at CBRE.

Mark Gleiberman, MGPG’s Chief Executive Officer, describes the acquisition as “a continuation of our strategy to take advantage of low long-term interest rates and economies of scale to generate outstanding cash-on-cash returns for our investors with Class-A properties in secondary markets.”

Santa Rosa marks MG Properties Group’s 13th acquisition in the past twelve months.  The thirteen acquisitions totaled approximately 3,600 units and $635,000,000 in combined purchase price. The company is targeting further acquisitions in Arizona, California, Colorado, Nevada, Oregon, and Washington. 

Over the last 25 years MG Properties Group has acquired 101 communities with its private investors and institutional joint venture partners totaling over 20,000 units, representing more than $2.7 billion in total asset value, including 11,700 units at a value of $1.7 billion since 2010.

(RECAP: Secretary of HUD nominee Ben Carson said at his confirmation hearing, “Certainly, if confirmed, I am going to work with the FHA administrator and other financial experts to really examine that policy.” He was talking about an earlier announcement from the current HUD head that FHA insurance rates were going to be cut. On January 12, when Carson made that remark, most everyone viewed it as a throw-away line. Now not so much. As background, on January 9, current HUD Secretary Castro announced a 25-basis point cut in the annual premium charged for FHA insurance. The reduction, scheduled to go into effect on January 27, would return FHA annual premiums almost back to where they were before a crisis in the FHA insurance fund caused substantial hikes in both the annual and the upfront premiums. A press release today from the Mortgage Bankers Association says, “Based on recent testimony and political pushback, we believe there is a strong chance the most recent MIP reduction… may be one of the rollback actions taken soon after President Trump takes office.” MBA says it expects this change will be effective immediately and “could create significant operational challenges for lenders and their customers.” The association urged its members to prepare to unwind any changes they have already made to adjust for the new rates if the delay, in fact, occurs.)

TAMPA, FL – New high-end apartment living has been introduced to Harbour Island. 500 Harbour Island, located at 500 Knights Run Ave. on Harbour Island in Tampa, is open for leasing, offering the latest in luxury, design and services to apartment residents. The 21-story high-rise building has 235 apartment homes comprised of studios, 1 & 2 bedrooms, 32 penthouse homes and five ground-level townhomes.

Meeting the market demand, 500 Harbour Island caters to a mixed demographic seeking an island lifestyle with sophisticated amenities and services. The location also offers the utmost convenience of being near the city with easy access to shopping, dining and entertainment. The unique amenity package includes an eighth floor amenity deck with views of Tampa Bay and downtown Tampa, a fourth floor infinity edge pool with a waterfall, cabanas, full high-tech clubroom, fitness center & spa, recreation center featuring big screen TV’s and pool table, outdoor TV entertainment venue, conference room, library, dog park and much more.

The local development team for 500 Harbour Island is comprised of Robert Moreyra and Peter Collins with Forge Capital Partners, and Phillip Smith and Greg Minder with Intown/Framework Group. The management company hired to oversee the leasing and management for 500 Harbour Island is Gables Residential.

“Our goal was to offer the Tampa market a high-end apartment home product backed by first-class customer service, and strategically develop this product on Harbour Island. Finding a site on Harbour Island makes the project that much more appealing to the high-end demographic we are targeting. 500 Harbour Island is a unique offering of ‘island living’ with the best of city living only a ferry ride, water taxi or short drive from home,” shares Phillip Smith.

With customer service at the forefront of importance for the new development, the developers also included a full service on-site concierge to provide services as needed and a 24-hour package room for the residents’ convenience. According to Robert Moreyra, “Based on market research, we believe there is adequate demand for a first-class, luxury rental community like 500 Harbour Island. We invested considerable resources in thoroughly planning the project’s amenities and services to cater to the desired demographic. We also brought in the best management company to support the needs of the residents.”

DENVER, CO – Pinnacle, one of the nation’s leading multifamily management firms, announced it has been selected to manage Helios Apartments in Englewood, Colorado, a 258-unit luxury community located at 7901 East Belleview Avenue. The property resides in the heart of the Denver Tech Center, one of the city’s fastest growing areas for business and technology.

Helios is an amenity-rich apartment community designed with an extraordinary level of privacy, security and serenity. Residents can choose from a variety of one- and two-bedroom floorplans with contemporary interiors featuring custom kitchen cabinetry, Granite countertops, wood plank flooring and other design amenities.

Community amenities include an outdoor living area with fireplace and gas grills, inviting pool with landscaped sun decks, conference centers and quiet spaces of relaxation where residents can stay fit and active. For ultimate convenience, residents benefit from on-site management, package receiving, an elevator, guest room, night patrol and a technology hub with full-connected computer kitchens.

Ideally situated just east of Interstate 25 and south of Interstate 225, Helios is surrounded by businesses and hotels in the DTC, restaurants, entertainment, retail and parks.

Pinnacle is a privately held national real estate provider specializing in third party management of multifamily residential communities. As one of the nation’s preferred third-party managers, Pinnacle’s portfolio includes over 165,000 residential units and 2.5 million square feet of commercial assets.

WASHINGTON, DC – Militello Capital, a greater Washington, DC private equity firm, announced that it recently exited two multifamily properties. The properties were acquired through QRM Capital, a joint venture between Militello Capital and QR Capital.

The properties sold include Hillwood Pointe Apartments in Nashville, Tennessee for $23.4 million and Hampton Oaks Apartments in North Charleston, South Carolina for $12.7 million.

Hillwood Pointe Apartments, a 180-unit multifamily apartment community located in Nashville, Tennessee, was purchased in June 2014 for $14,850,000. Hillwood Pointe was built in 1997 and consists of one, two and three bedroom units. 

Hampton Oaks Apartments, a 160-unit apartment community located in North Charleston, South Carolina, was purchased in December 2014 for $8,480,000. Hampton Oaks was built in 1972 and consists of one and two bedroom units. 

“We are extremely proud of the results of these two investments,” says Matt Brady, Co-Founder and Chief Operating Officer of Militello Capital. “It is very gratifying to deliver such value to our investors and the financial advisors that placed their trust and confidence in us when making these investments.”

Militello Capital is a private equity firm founded by Advisors for Advisors. We provide educational tools, technology and investments in the real economy to elevate Advisors’ businesses and modernize their clients’ portfolios.

NEW YORK, NY – Mortgage rates continued to drop this week, with the benchmark 30-year fixed mortgage rate sitting at 4.18 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.25 discount and origination points.

Both the larger jumbo 30-year fixed (4.24 percent) and the average 15-year fixed mortgage (3.41 percent) remained unchanged this week. Adjustable mortgage rates were mixed, with the 5-year ARM slipping to 3.45 percent and the 7-year ARM dropping to 3.68 percent.

Mortgage rates fell for the third week in a row, despite a slight upward creep in inflation and wages. The Consumer Price Index went up 2.1 percent in 2016, which is higher than the Federal Reserve’s inflation target. The Fed also noted that businesses are seeing upward pressure on wages. The inflationary news didn’t push mortgage rates higher, though, as geopolitical uncertainty dominated.

At the current average 30-year fixed mortgage rate of 4.18 percent, the monthly payment for a $200,000 loan is $975.70.

SURVEY RESULTS

30-year fixed: 4.18% — down from 4.20% last week (avg. points: 0.24)
15-year fixed: 3.41% — unchanged from 3.41% last week (avg. points: 0.19)
5/1 ARM: 3.45% — down from 3.52% last week (avg. points: 0.34)

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. The majority of the panelists – 46 percent – expect mortgage rates to remain more or less unchanged over the next week. About a third of the experts, 36 percent, predict further declines in mortgage rates while just 18 percent forecast an increase in the coming week.

(RECAP: The U.S. economy is closing in on the Federal Reserve’s goals, giving the central bank impetus to start reducing the extreme levels of support it has provided over the past decade, Chair Janet Yellen said in a speech Wednesday. After more than a decade of benefiting from historically aggressive easing measures, the economy is “close” to the Fed’s objectives, though policy removal is expected to be slow, Yellen said in San Francisco. The speech, to the Commonwealth Club, essentially served as a monetary policy primer, though she did drop some hints about the road ahead.)

CHARLOTTE, NC – Ram Realty Services and LMC are pleased to announce the sale of Midtown 205 to an undisclosed institutional investor.  Midtown 205 is a 261-unit apartment community with 8,630 square feet of ground-floor retail space conveniently located in the popular Midtown neighborhood.

Ram and LMC formed a joint venture partnership in 2013 to develop the community in a pedestrian-friendly location alongside Metropolitan, Midtown’s premier shopping plaza just minutes from downtown Charlotte. The project broke ground in early 2014 and delivered the first units in late 2015.

“Demand for high-quality apartment housing continues to grow in the popular Midtown submarket, and Midtown 205 made the most of it, consistently outperforming its closest competitors,” said Jennifer Stull, Managing Director of Asset Management for Ram. “Its trend-setting design and walkable location made it one of the most desirable communities to both residents and potential buyers in the region. We’re pleased with the sale and look forward to finding new opportunities to continue investing in the thriving Charlotte market.”

Residents at Midtown 205 have easy access to an array of popular dining, shopping and entertainment destinations at Metropolitan, including Pisces Sushi Bar & Lounge, Vivace, Dressler’s, Target, Trader Joe’s, West Elm and more. Also within close proximity of Midtown 205 are the Charlotte streetcar, the Little Sugar Creek Greenway trails, Interstate 277, and US Route 74, providing fast access to Uptown, South End, and other outlying neighborhoods.

In addition to its convenient location, Midtown 205 offers residents a variety of lifestyle-enhancing features and amenities. A shimmering courtyard swimming pool, outdoor kitchen with a flat-screen TV and fireplace, and a modern fitness center with separate yoga and cycling rooms headline the amenities. Inside the apartment homes, residents enjoy custom-designed cabinetry, 9+ foot ceilings, stainless-steel appliances, granite countertops, light-filled interiors and dramatic skyline views in select units.

“Midtown 205 combines proximity to Uptown employers and some of Charlotte’s finest residential neighborhoods with unparalleled walkability to retail and restaurant options,” said Jeff Harris, LMC’s division president for the Carolinas. “We believe it will continue to add value for the neighborhood, the new owners and its residents for years to come.”