Author: ipgocorp

(RECAP: Millennials are less concerned about buying a home before interest rates increase, and more concerned that they won’t be able to find a home they want, according to a report from Trulia. There is, however, good news for Millennial homebuyers who do step into homeownership. The average FICO score of Millennial borrowers who closed on a mortgage in June rose to 723, up from 722 in May and 721 in April. For the third month in a row, FHA made up 37% of closed loans in June among Millennial homebuyers. This is compared to 60% who used conventional loans.)

DALLAS, TX – Some 47,700 new beds are expected to come to market in privately-owned, purpose-built student housing properties in time for the Fall 2016 semester, with university markets in the Southeast region the primary target, according to Axiometrics, a provider of student housing and apartment market intelligence.

Meanwhile, the maturing real-estate sector continued its strong performance during the Fall 2016 leasing season.

Supply Going South

Seven of the 10 university markets expecting the most new supply this fall are in the Southeast or Southwest. Two are in the Midwest and one is in the Northeast Corridor.

To date, 43,800 new beds are scheduled for delivery in time for the Fall 2017 semester. The geographic spread of the university markets with the most anticipated new properties is much more diverse.

The new supply to be delivered this year is the third highest ever for privately-owned properties, behind 2014 and 2013.

“Though deliveries of new supply are not as high as they were a couple of years ago, demand remains strong, and students are generally absorbing the new beds,” said Jay Denton, senior vice president of analytics for Axiometrics. “One thing that differentiates student housing from conventional apartments is that the distribution of new supply can change dramatically year to year. As construction near one school meets the demand, a building boom will begin in another university market.”

Metrics Show Strong Performance

Rents and leasing velocity for the Fall 2016 leasing season both increased from Fall 2015.

“Privately-owned student housing is quickly becoming an integral sector in real estate, and performance metrics demonstrate its strength,” Denton said. “Axiometrics forecasts rent growth to remain strong over the next five years and occupancy to stay above 95%, as enrollment continues to rise nationwide.”

As has been the case, rents are higher the closer to campus a property is located. Effective rent growth was highest for properties one-half mile to one mile from campus.

MELISSA, TX – Gardner Capital Development has been awarded a $1.3 million reservation of affordable housing tax credits from the Texas Department of Housing and Community Affairs to develop 93 independent, mixed-income, senior residences in the Melissa community of Texas. This $16+ million community will include a main three-story building with elevators and 93 energy efficient, one- and two-bedroom cottage-style apartments for seniors age 55 and older. 

Part of a 35-acre planned mixed-use development that will eventually include retail components, Gala is the first mixed-income senior living community development approved in Melissa, Texas. It is also the only mixed-income property in Melissa that serves senior residents at affordable rents. With a population of approximately 9,500, the city of Melissa is located 35 miles north of downtown Dallas in the dynamic growth area of northeast Collin County.

“The Gala Community will focus on providing its senior residents not only with well-designed, affordable housing, but with numerous upscale amenities, including multi-purpose community rooms, a fitness center, resident lounges, a pool, and covered porches,” said Michael Gardner, Principal and CEO, Gardner Capital Development. In addition, a full calendar of weekly and monthly senior-focused events will encourage residents to be physically and socially active.  

Construction of the development is anticipated to begin in the second quarter of 2017, with completion expected fall of 2018. Gardner Capital Development Texas, LLC will serve as the developer for this project. Other members of the development team include Gardner Capital Construction, LLC, Cross Architects, and Allied Orion Group property management.

Gardner Capital is an affordable housing and renewable energy tax credit development, syndication, and investment company with primary regional offices located in St. Louis, Dallas, San Francisco, Atlanta, and Springfield, Missouri. Since 1992, Gardner Capital has invested more than two billion dollars of equity in affordable housing alone.

NEW YORK, NY – A joint venture announced between the Community Development Trust (CDT), a real estate investment trust that provides capital for the preservation and creation of affordable housing, and Volunteers of America (VOA), a national nonprofit affordable housing owner and developer, will ensure that a Colorado Springs, Colorado, apartment complex continues to provide affordable housing to 256 low-income families and individuals.

The CDT-VOA joint venture to recapitalize Summit Apartments, a 30-year-old complex at 2795 Reeve Circle, will also fund $1.5 million in improvements to the property, including kitchen updates, new windows, other energy upgrades and new retaining walls. The Colorado Springs Housing Authority (CSHA) also is a partner in the joint venture.

“CDT’s investment—our first in Colorado—is part of our larger commitment to ensuring long-term access to quality, safe and affordable housing throughout the country,” said Brian Dowling, Senior Vice President of Community Investments at CDT. “Our joint venture with Volunteers of America also serves as a model of how a national institutional investor can partner with a large nonprofit organization to help address the nation’s critical shortage of affordable housing.”

All of the units in Summit Apartments will remain preserved for families and individuals earning between 50 and 80 percent of the area median income (AMI).

Constructed in 1986, the property was purchased by Volunteers of America in 1993 from the Resolution Trust Corporation using financing provided by Colorado Housing and Finance Authority.

The Colorado Springs Housing Authority was integral to the success of the latest Summit Apartments transaction, having facilitated a tax exemption to the CDT-VOA partnership that expanded and extended the level of affordability at the property. Through partnering with the CSHA, CDT and Volunteers of America were able to increase the level of affordability so that 85 percent of the units serve families at or below 50 percent AMI and 15 percent of the units serve those at or below 80 percent AMI.

“As there is a shortage of affordable housing in our community, the preservation of existing affordable units is critical to our goal of providing quality housing for low-moderate income families,” said Chad Wright, Executive Director of the CSHA. “The ability to create strategic partnerships in the pursuit of this goal is essential. This collaboration exemplifies that approach and will benefit families in Colorado Springs for many years.”

Civic leaders have identified the lack of affordable housing that accommodates low- to moderate-income residents as a high priority in Colorado Springs and across El Paso County. An October 2014 Affordable Housing Needs Assessment commissioned by the city and county governments shows that:

About half of renters and a third of homeowners with mortgages in El Paso County are cost burdened, meaning they spend over 30 percent of their income on housing.

When comparing the distribution of household incomes to the distribution of housing units priced at levels these households can afford, El Paso County has an estimated gap of 24,513 affordably priced units.

Given the high cost of land in Colorado Springs, increasing construction costs, including extension of new public infrastructure and public opposition to new affordable multifamily housing properties, the report recommended that city and county officials “seriously” consider the acquisition, rehabilitation and preservation of its existing affordable housing stock by teaming with a nonprofit developer or entering a limited partnership.

The Summit Apartments transaction with the triumvirate of CDT, Volunteers of America and the Colorado Springs Housing Authority is a strong example of a for-profit, a nonprofit and a public entity working together for the common goal of preserving affordable housing in the community.

CDT invested approximately $2 million into the partnership. CDT and Volunteers of America closed on an acquisition bridge loan funded by CDT in June and then closed on permanent financing in July. The permanent financing provides attractive long-term financing from Freddie Mac through Wells Fargo, National Association.

“We are proud to partner with CDT and the Colorado Springs Housing Authority to preserve and improve the affordable housing opportunities provided at Summit Apartments,” said Robert Gibson, Executive Vice President and Chief of Staff for Volunteers of America. “By providing families with the space they need and services that help parents and their children thrive, we help families build communities.”  

(RECAP: A portion of the New Point shopping center is being demolished to make space for The Nexus Flats – a community of two apartment buildings containing 268 units. The remainder of the aging strip shopping center will be refurbished, followed by the introduction of new retail merchants. Each of the four-story apartment buildings at 544 Newtown Road will have an interior courtyard and feature one- and two-bedroom units, according to Kate Verreault, director of marketing and leasing operations for Boyd Homes, developer of the project. Apartments range in size from 500 square feet to 1,300 square feet. Residents will have direct access to the adjacent shopping center.)

(RECAP: The old Virginia School of the Arts building in Lynchburg may see new life as apartments. A preliminary rezoning petition for the 1.5-acre property on Rivermont Avenue has been submitted by its owner, Jackson III, LLC. The property is currently zoned R-3 medium density residential. Jackson III is seeking rezoning to R-4 high density residential to allow the conversion of the building into 29 apartment units. Jackson III purchased the property in 2010. The partners involved in Jackson III also own the 130-plus-year-old Piedmont Mills building downtown on Jefferson Street, which is undergoing in its own transformation into residential apartment housing.)

REDLANDS, CA – The Bascom Group has acquired Del Flora Apartments, a 152-unit garden style apartment community located at 30598 Independence Avenue, Redlands, CA 92374.  The $22.15 million sale closed on July 28, 2016 and marks Bascom’s 37th apartment acquisition in the past twelve months. 

Tyler Martin with ARA Newmark was the broker for the sale.  Brian Eisendrath and Annie Rice with CBRE arranged the $16.94 million loan with CIT Bank, N.A.

The community was built in 1989 and consists of 23 buildings, situated on 7.4 acres. Rental offerings include a range of one-bedroom and two-bedroom floor plans accounting for 37% and 63% of the units respectively. Common area amenities include a pool, fitness center, clubhouse, and tennis court. The property is well located, proximate to highly ranked schools, major employers, retail, and transportation corridors.

Chad Sanderson, Senior Principal of Bascom, states “Del Flora is an attractive choice for Inland Empire renters. Located in one of the top Inland Empire sub-markets, the property offers tenants access to some of the best schools in the area as well as proximity to the University and other major employers. Del Flora has great potential as jobs and economic fundamentals in the region continue to strengthen.”

Julie Schoenbachler, Senior Vice President of Operations at Bascom, comments “Del Flora has a good unit mix with very open and inviting floor plans. We feel that the great schools on either end of the property and the low density feel make this an attractive property for families.”

MARQUETTE, MI – EdR, one of the nation’s largest developers, owners and managers of high quality collegiate housing, announced the commencement of construction on a multiple building living-learning community at Northern Michigan University (NMU).

EdR was chosen by NMU through a competitive selection process to execute all aspects — development, finance, construction and management — of this project which will be the largest in the university’s history. 

Upon completion, EdR will operate the residence halls under a 75-year lease with NMU and will manage the facility while NMU will provide residence life services. 

EdR will finance the approximately $80 million housing development through its ONE Plan which uses the company’s equity and financial stability to fund projects on university land. 

More than 1,200 beds will be delivered in multiple phases which are scheduled for delivery in the second half of 2017, and the fall of 2018.  This systematic phasing will allow NMU to accommodate student bed count needs during construction.

The new living-learning community will feature robust internet and Wi-Fi capabilities, classrooms, study rooms, TV lounges and laundry facilities. The large patio area, fireplaces and lobbies are designed to accommodate art shows, student events, university functions and various types of entertainment for residents year round.

“I think the enhanced on-campus housing is an incredibly positive, transformative opportunity for Northern,” said NMU President Fritz Erickson. “It is going to allow us to greatly strengthen our capabilities to recruit and retain students in today’s highly competitive education environment, enrich student life and address a very serious facilities and maintenance issue.”

Northern Michigan University is a dynamic four-year, public, comprehensive university that features one of Michigan’s premiere education programs and several other nationally recognized academic programs.  

“University leadership has made it clear that increased recruitment, enrollment and retention of top-level students is a priority at Northern Michigan University,” said Tom Trubiana, EdR president.  “Partnering with NMU provides EdR the opportunity to deliver another on-campus housing community that gives the university both a state-of-the-art home for many of its students and a recruiting tool that will compete with any in the nation.”

NEW YORK, NY – Trepp, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its July 2016 US CMBS Delinquency Report.

The Trepp CMBS Delinquency Rate moved noticeably higher in July, as the rate was pushed up by loans that reached their maturity date but were not paid off. The delinquency rate for US commercial real estate loans in CMBS is now 4.76%. The rate has increased 16 basis points from June, but is 66 basis points lower than the year-ago level.

In July, CMBS loans that were previously delinquent but paid off with a loss or at par totaled almost $950 million. Over $200 million in loans were cured last month, and over $1.8 billion in loans became newly delinquent. However, over $3 billion in loans were paid off in July, which gave the remaining delinquent loans an increased weight.

“As we noted last month, there is a growing number of loans from the 2006 and 2007 vintages that are reaching their maturity date and are unable to be refinanced,” said Manus Clancy, Senior Managing Director at Trepp. “This is pushing the delinquency rate higher and we expect that trend to continue for the foreseeable future. The one bright spot is that with Treasury rates near historic lows and CMBS tightening sharply over the last few weeks, some of the ‘cuspier’ loans could squeeze by.”

The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, increased along with the overall delinquency rate. The rate of seriously delinquent loans inched up 16 basis points for the month, now 4.67%. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 4.97%.

By property type, delinquency rates for three of the five major sectors increased in June. The retail delinquency rate added four basis points to 5.67%. The office sector underwent the largest increase out of all major property types, as that delinquency rate moved up 47 basis points to 6.23%. Industrial loans underwent the greatest improvement, as the sector’s delinquency rate dropped 32 basis points to 5.63%.

EDISON, NJ – Roseland Residential Trust, a wholly owned subsidiary of Mack-Cali Realty Corporation, held a ceremonial ground breaking for its newest luxury residential community, Signature Place at Morris Plains, in Morris Plains, New Jersey. The new multi-family community will feature 197 luxury apartment homes and is scheduled to be completed in the fourth quarter of 2017. This site was previously a vacant Mack-Cali office building that is being repurposed into a multi-family residential community.

The repositioning of select Mack-Cali office buildings into multi-family communities was a key part of the company’s strategic plan announced last year. The repurposing of certain assets will create significant value and is designed to ensure the highest and best use of those selected properties. Mack-Cali and Roseland are in the process of repositioning several of its underperforming, obsolete assets and continue to evaluate the portfolio for additional repositioning opportunities.

“Today marks a significant milestone for the Mack-Cali and Roseland team as we move forward with another of the cornerstone initiatives we laid out in our strategic plan,” said Michael J. DeMarco, President and Chief Operating Officer of Mack-Cali Realty Corporation. “In order to provide the highest rate of return for our investors, we know that we must optimize the value of each and every property in our portfolio. Creating Signature Place at Morris Plains will accomplish exactly that for this site.”

“This is an incredibly attractive location for a luxury residential community – with excellent transit options and a vibrant surrounding area,” said Andrew Marshall, President and Chief Operating Officer of Roseland Residential Trust. “Bringing 197 apartment homes to Morris Plains is a win-win for both our company and the borough, and we look forward to our continued partnership.”

This new community is located at 250 Johnson Road in a park-like setting with lake views. Signature Place at Morris Plains is ideally situated in the heart of Morris County, in close proximity to numerous recreational, dining, and shopping destinations along Route 10. It also features a number of convenient options for commuters including indoor/outdoor parking, NJ TRANSIT’s Morris Plains train station with hourly service to New York Penn Station, and access to Interstates 287 and 80.

Each of the 197 luxury apartment homes will feature a high-end living experience designed to attract a wide range of residents from young professionals to empty-nesters looking to downsize from their current residence. The property includes one- and two-bedroom units, all with state-of-the-art appliances and finishes. Signature Place will also provide residents with access to a wide range of amenities, including a state-of-the-art fitness center, dog run with dog-washing station, resort-style, outdoor swimming pool with sun deck, barbecue grills, tennis court, golf simulator, resident clubroom with billiards, and conference room.

“Roseland and Mack-Cali are excellent partners and this exciting development will bring tremendous benefits to our already wonderful borough,” said Morris Plains Mayor Frank J. Druetzler. “We look forward to coming back here for a ribbon cutting ceremony to celebrate the opening of what I know will be a first-class residential community.”