Author: ipgocorp

SAN ANTONIO, TX – The Bascom Group has acquired the Redlands Apartments, a 280-unit Class A apartment community located in the affluent Stone Oak submarket of San Antonio, Texas. The property offers residents great access to North San Antonio’s major employment corridors. Debt financing was arranged by De’On Collins, John Brownlee and Charles Halladay of HFF. James D’Argenio sourced and managed the acquisition for Bascom.

The property consists of 15 residential buildings and one stand-alone leasing center spread across more than 26 acres. The unit mix is comprised of 42% one bedroom units, 45% two bedroom units, and 13% three bedroom units. Community amenities include a fitness center, swimming pool, volleyball and basketball courts, BBQs, picnic areas, a children’s playground, a pet park, and a clubhouse with a business center.

San Antonio is home to many businesses across a diverse array of industries including medical, financial, technology, data management, manufacturing, sustainability, aviation, defense, retail, office and transportation. As San Antonio continues to offer an elite quality of life relative to other U.S. cities, the MSA continues to induce corporate relocations, company expansions, and commercial development. This economic growth and limited apartment supply will continue to strengthen multifamily fundamentals in San Antonio.

James D’Argenio, Principal for Bascom, comments, “We acquired a well-built, low-density asset benefitting from a great school system and a stable resident base. The interiors offer an upgrade opportunity when compared to newer, more expensive apartments in the submarket.”

Tony Ferrell, Director of Portfolio Operations for the Texas region adds, “North San Antonio and the surrounding markets continue to show strong apartment fundamentals and household economic statistics relative to other Texas markets. The property along with the neighboring properties are all high 90s occupancy with healthy resident analytics.”

GREENWICH, CT – Starwood Capital Group, a leading global private investment firm, and Round Hill Capital, a leading European specialist real estate investment and asset management firm, announced that they have acquired, through a new joint venture involving controlled affiliates, an operational portfolio of six modern, purpose-built, premium student accommodation assets across the United Kingdom. As part of the transaction, the joint venture has also entered into a forward funding agreement for the acquisition of a development scheme in Newcastle. The total purchase price for the portfolio was approximately £120 million.

The direct-let properties are in central locations in top university cities across the U.K. The portfolio comprises high-specification assets with premium-quality communal areas and a total of 1,595 beds in a mixture of mainly large studios and ensuite bedrooms in cluster flats. The standing assets consist of The Haymarket in Edinburgh, Chestnut House in Cambridge, The Walls in Southampton, St James House in Glasgow and Union Square and Stepney Yard, both in Newcastle. The forward funded development in Newcastle is expected to be delivered in time for the 2018–19 academic year.

“Starwood Capital has an established platform of student housing in the U.S., with 6,855 beds under management, and based on our strong performance and track record, we are keen on expanding our footprint in this sector in the U.K.,” said Zsolt Kohalmi, Head of European Acquisitions at Starwood Capital Group. “We are excited to work with Round Hill Capital and Nido as our partners on this investment, which boasts assets in superb locations and strong student markets that provide a high-quality offering to students. We believe that the U.K. is and will continue to be one of the top educational destinations for international students. We believe that student housing offers the potential for compelling risk-adjusted returns—based on a history of producing robust rental growth and maintaining high occupancy even amidst the last economic crisis—and we look forward to building on this transaction to establish a sizeable student housing platform in the U.K.”

The portfolio will be optimised through active, hands-on management via Round Hill’s well-established Nido Collection brand and operational platform for student accommodations. Round Hill has a successful track record of investing in and operating student accommodation assets, having acquired, built up and managed over 2,700 student housing beds. In 2015, Round Hill sold 2,378 beds to Greystar Real Estate Advisers in 2015 for £600 million.

“Round Hill has an established and successful investment track record and operational expertise in premium student accommodation in the U.K., and we are very pleased to make this acquisition through our new U.K. joint venture with Starwood Capital Group,” said Michael Bickford, Founder and CEO of Round Hill Capital. “We look forward to actively managing and repositioning the portfolio and building a substantial premium student accommodation platform in partnership with Starwood Capital Group in key cities across the U.K. The demand for higher education in the U.K. is continuing to rise but the student housing market still suffers from structural supply constraints for high-specification properties in key university cities. Taken together with the sector’s growing and stable cash flows and our proven Nido Collection brand and operating expertise, this acquisition provides a compelling investment opportunity.”

NEW YORK, NY – Mortgage rates moved lower for a second consecutive week to start 2017, with the benchmark 30-year fixed mortgage rate sitting at 4.20 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.24 discount and origination points.

The larger jumbo 30-year fixed retreated to 4.24 percent, and the average 15-year fixed mortgage rate dropped to 3.41 percent. Adjustable mortgage rates were mixed, with the 5-year ARM nosing higher to 3.52 percent and the 7-year ARM sinking to 3.73 percent.

Following the headlong increase in November and December, both bond yields and mortgage rates are now moving in a much tighter range. Economic data remains consistently solid, but isn’t blowing anybody’s hair back. The prospective government stimulus upon which very high hopes have been pinned remains speculative, and the next big move in rates could be predicated on legislative action or inaction post-Inauguration Day. One other potential catalyst for rate movement in the months ahead will be inflation, which investors haven’t needed to pay much attention to in a long time. Two readings – producer prices and consumer prices – are due for release in the coming week.

At the current average 30-year fixed mortgage rate of 4.20 percent, the monthly payment for a $200,000 loan is $978.03.

SURVEY RESULTS

30-year fixed: 4.20% — down from 4.21% last week (avg. points: 0.24)
15-year fixed: 3.41% — down from 3.45% last week (avg. points: 0.20)
5/1 ARM: 3.52% — up from 3.50% last week (avg. points: 0.30)

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 the panelists – 55 percent – expect mortgage rates to be in a holding pattern, remaining more or less unchanged over the next week. A little more than one quarter, 27 percent, predict further declines in mortgage rates while just 18 percent forecast an increase in the coming week.

(RECAP: A giant excavator shovels hundreds of crumbled cinderblocks along West Main Street, clearing the remnants of an old office building. A new six-story apartment building called The Standard is set to take its place, adding nearly 650 bedrooms to Charlottesville’s rental market. But not one of these will be priced as affordable for lower-income residents in the city. Instead, they’re aimed at University of Virginia students. Most 2-bedrooms in Charlottesville range between $1,000 to $1,800 a month, according to a recent study commissioned by the city. That’s on par with Virginia Beach, according to U.S. Census data, and exceeds average rents in cities such as Richmond, Roanoke, and Harrisonburg. Anecdotally, people are moving away, to places within driving distance, such as Waynesboro or Scottsville, but where 2-bedrooms go for less than half as much.)

(RECAP: On Jan. 4, Dr. Doug Duncan, Executive VP and Chief Economic Officer of the Federal National Mortgage Association, otherwise known as Fannie Mae hosted the association’s quarterly strategy meeting in Washington D.C. What made this particular session an unprecedented event, however, was the representation of real estate investors among the invited attendees. This is the first time that guests outside of Capitol Hill have been invited to any sort of Fannie discussion, which has opened up a debate on the importance of real estate investors in the current housing market. The meeting proved the government’s interest in investors and has provided an optimistic future outlook for single-family, non-occupant loans to be based more on the income of the property, as opposed to the borrower. Fannie’s limit on the number of loans made to a single investor had previously made it difficult for landlords and investors to be economically motivated to provide housing sufficient to meet demand.)

DALLAS, TX – Network Acquisition Partnership Alliance LLC, or NAPA Ventures, an Austin, TX based multifamily and commercial real estate investment company co-founded by Glenn Gonzales and Shravan Parsi announced the acquisition of Eagle Point and Pleasant Creek Apartments.

“As a team, we couldn’t be happier with the closing of Eagle Pointe and Pleasant Creek which completes our 1450-unit multifamily portfolio with eight properties in Dallas and Fort Worth MSA,” said Shravan Parsi, Co-CEO of NAPA.

DFW MSA is No. 3 in population growth in U.S. cities in 2016 per Realtor Magazine, “which gives us (NAPA) great confidence in the purchase of these properties,” Parsi said.

Eagle Pointe and Pleasant Creek Apartments were the last two in the portfolio of eight that were acquired by the real estate investment firm. The two properties are a combined 315 units nestled in the DFW MSA area conveniently close to major employers such as PepsiCo, L’Oreal, and Proctor & Gamble. The units were purchased in partnership with a local private equity group.

“With our deep knowledge in multifamily acquisitions and renovations, coupled with our innovative way of funding projects we are confident that we will be successful with this portfolio,” said Glenn Gonzales, Co-CEO of NAPA. “Our combined 50 years of experience in multifamily and our well-designed business plan is what sets us apart.”

COLUMBUS, OH – Redwood Living and RED Mortgage Capital, the mortgage banking arm of RED Capital Group, LLC (RED), recently celebrated a significant milestone in their relationship with the closing of a $4.17M bridge loan for an eventual FHA 223(f) refinance on the Lakes of Ridgecrest Phase 4 in North Ridgeville, Ohio. With this closing, the two firms have now collaborated to close 50 unique financings for Redwood-owned assets, totaling in excess of $340M.

Redwood, one of the nation’s largest developers of single-story apartment homes, currently manages over 9,000 units across the Midwest and into the Carolinas. RED is a Fannie Mae DUS lender and the number one producer of FHA insured mortgages by loan count of total closings in HUD FY15 and FY16.

The lending relationship began in February 2009 with the Fannie Mae DUS® loan closing of Plum Creek Apartments Phase 1 in Brunswick, Ohio. The loan, a $3.9M refinance of 54 units, was Redwood’s first non-CMBS loan closing.

“Redwood was growing rapidly in the early 2000s, but the housing crisis led to a distressed lending environment,” stated Andy Warnock, Director of Multifamily Housing for RED. “Redwood was looking for options outside of Wall Street to provide permanent financing to their newly constructed projects. We introduced Steve Kimmelman, CEO of Redwood, and his team to agency lending options and a deep relationship – and meaningful friendship – commenced.”

Since that first Fannie Mae DUS® transaction nearly eight years ago, RED has also arranged financing via multiple FHA-insured programs, through multiple CMBS securitizations, and utilizing its proprietary balance sheet. Additionally, RED has brokered Freddie Mac and Life Company business on behalf of Redwood.

“We trust RED,” said Kimmelman. “Andy and his team share a similar mindset and culture to our team at Redwood. Our finance department often communicates as frequently with RED employees as they do their own colleagues. That foundation of trust and the open lines of communication have allowed for tremendous success by both firms during – and after – one of the most challenging real estate markets in recent history.”

As Redwood’s portfolio has grown, so too has their need for permanent financing. RED closed three transactions with Redwood in 2009 totaling $12.18M. In 2016, RED closed and/or arranged financing for 14 Redwood assets exceeding $107M in loan volume.

David Conwill, President of Redwood Living, credits much of Redwood’s positive growth to its relationship with RED, stating, “RED Capital Group gets it. They are more than a lender; they are a trusted advisor who helps manage our pipeline, strategize new construction and refinance opportunities, attends internal committee meetings and champions the Redwood brand. Without the combination of resources between the two firms, Redwood’s torrid growth would be far less manageable.”

Redwood has grown from 17 properties and 1,536 units in 2009 to 110 properties and 9,032 units today (some of which are currently under construction), an annualized growth rate of 29%. Redwood has also expanded their footprint outside of Ohio to include assets in Michigan, Indiana, Kentucky, Iowa, North Carolina, and South Carolina, with plans for further expansion.

“We appreciate Redwood’s loyalties,” Warnock said. “Here’s to the next 50 closings.”

(RECAP: Love Funding, one of the nation’s leading providers of FHA multifamily, affordable and healthcare financing, announced the closing of a $19 million loan that will help preserve and refurbish an affordable senior housing community in Vienna. Tysons Tower was built in 1976 by The Fairfax Education Association Retirement Housing Corporation (FEARHC) to provide affordable housing for senior residents. Part of VHDA’s affordable housing stock, the property was in need of major facility upgrades and its existing rental assistance contract was set to expire in 2017. FEARHC wished to ensure that the 274 units continue to be reserved for those aged 62 or older and who earn 80 percent or less of the area’s median income. Love Funding Director Ann Bolen was able to secure the new loan through the VHDA, after securing a commitment from HUD’s Rental Assistance Demonstration (RAD) program for a new 20-year Project Based Rental Assistance (PRBA) contract on 100 percent of the units.)

SEATTLE, WA – The total value of the U.S. housing stock grew to a record-high $29.6 trillion in 2016, according to a new Zillow analysis. The housing market saw a strong year of appreciation, growing 5.7 percent in value, or $1.6 trillion.

The U.S. housing market has regained all the value lost during the housing crisis. The cumulative value of all homes in the U.S. declined by $6.4 trillion between 2006 and 2012 as the housing market collapsed.

A home is typically the biggest part of an individual or family’s wealth, and the cumulative value of the U.S. residential housing stock is similarly significant to the national economy. The U.S. GDP is an estimated $18.7 trillion, nearly $10 trillion less than the value of all homes in the country.

Los Angeles and New York metros hold the highest shares of the country’s overall housing value, at 8.6 percent and 8 percent, respectively. The next most valuable metro is San Francisco, worth 4.2 percent of the overall housing value.

While several markets are now more valuable than they were at the height of the housing bubble, about 60 percent of the markets in the U.S. are still below the maximum values reached during the bubble years. For example, Chicago is still about $134 billion below the highest value it reached in 2006.

“Housing is incredibly important to us personally and to the economy as a whole,” said Zillow Chief Economist Dr. Svenja Gudell. “The U.S. housing stock is worth more than ever, which is a sign of the ongoing housing recovery. As buying a home gets more expensive, affordability remains a concern for many, and these numbers highlight just how much people are spending on housing. The total value of the housing stock grew nearly 6 percent this year, a pace that will likely mean some American families are priced out of homeownership.”

Renters this year paid $478.5 billion, a $17.7 billion increase from 2015. About 635,000 new renter households formed in 2016, contributing to the amount of rent spent even as rent appreciation slowed. Apartment renters spent nearly $50 billion more than renters of single-family homes, as more multifamily construction became available this year.

Renters in the New York/Northern New Jersey metro paid the most this year, spending nearly $55 billion on rent.

HUNTINGTON, NY – Headquartered in New York, URS Capital Partners is a private real estate investment firm that focuses on acquiring value add apartment communities throughout Southeast and Midwest.

URS has organically built its portfolio by working with private investors and proving its ability to reposition operationally challenged and/or undermanaged multifamily communities.

The second half of 2016 was an active six months for URS Capital Partners with the sale of three assets and the acquisition of three assets.

URS Capital Partners sold the three assets outlined below between August and November of 2016:

Reserve at Ashley River: $12,500,000 for 280 Units in North Charleston SC

Ashley Village Townhomes: $16,380,000 for 260 Units in North Charleston SC

Southside Square: $5,200,000 for 108 Units in Jacksonville FL

“Each property had undergone various levels of renovations and we had completed our business plans ahead of schedule. As a result we felt an opportunistic exit was the right decision for us and our investors. These sales allowed us to realize significant value ahead of proforma and redeploy capital into new value add opportunities within our targeted markets,” said Christopher Urso, Managing Partner.

In addition to the above noted sales URS Capital Partners acquired three additional assets between August and December 2016.

Urban Flats: 66 Units in Downtown Louisville KY

Northlake Townhomes: 76 Units in North Charleston SC

Moss Pointe: 278 Units in Savannah GA

Christopher Urso stated, “We are very excited to have acquired a diverse combination of assets over the last six months. Each asset represents a compelling value add through a combination of operational and capital improvement programs. Each property will receive anywhere from $5,000 -$10,000/unit of improvements including exterior, amenity and unit upgrades. The most notable achievement in the recent acquisitions was our expansion into Louisville and Savannah both of which have been target markets for several years and we hope to expand in the coming year.”