October 20, 2014

Lee Hughes Medical Building Acquired by CNL Healthcare Properties

CNL Healthcare Properties recently closed on the acquisition of the Lee Hughes Medical Building located on the campus of the 500-bed Glendale Adventist Medical Center in Glendale. Built in 2008, the property features an elevated pedestrian ‘sky bridge’ that connects to the main hospital.

The four-story medical office building totals 67,547 square feet. Glendale Adventist Medical Center sold the property for 29.9 million, or approximately $443 per square foot.

The building is is currently 97% occupied with Adventist Health a major tenant. Please see CoStar COMP # 3132550 for more information on the transactions.

Article source: http://www.costar.com/News/Article/Lee-Hughes-Medical-Building-Acquired-by-CNL-Healthcare-Properties/164939?ref=/News/Article/Lee-Hughes-Medical-Building-Acquired-by-CNL-Healthcare-Properties/164939&src=rss

After Renewing Anchor Tenant, Mani Bros. Sells 801 Tower for $177.2M in Los Angeles


Cornerstone Real Estate Advisers LLC acquired the 801 Tower at 801 S. Figueroa St. in Los Angeles from Mani Brothers Real Estate Group immediately after the seller renewed the building’s anchor tenant, law firm Manning Kass, Ellrod, Ramirez, Trester, for 80,328 square feet.

Cornerstone purchased the 25-story, 458,570-square-foot office tower for $177.2 million, or about $386 per square foot.

The law firm agreed to restructure its existing lease and sign a long-term lease extension in the building where its corporate headquarters has been located since 2006. The firm occupies floors 12 through 16.

Luke Raimondo, corporate managing director in Savills Studley’s downtown Los Angeles office, represented Manning Kass in the transaction. John Eichler of Cushman Wakefield represented Mani Bros.

Built in 1991, the downtown office tower stands at the southwest corner of 8th St. Eastdil Secured LLC brokered the sale for the seller.

For more information on this transaction, please see CoStar COMPS #3127693.

Article source: http://www.costar.com/News/Article/After-Renewing-Anchor-Tenant-Mani-Bros-Sells-801-Tower-for-$1772M-in-Los-Angeles/164752?ref=/News/Article/After-Renewing-Anchor-Tenant-Mani-Bros-Sells-801-Tower-for-$1772M-in-Los-Angeles/164752&src=rss

Pair of LA Retail Centers Purchased by Separate Buyers


Investors recently acquired a pair of Los Angeles retail centers in separate transactions totaling nearly $29 million.

In Palmdale, an investment group led by Progression Real Estate Investments purchased the leasehold-interest in Sierra Commons for $18.3 million.

The 104,811-square-foot community shopping center is located at 39720 10th St W and includes Ashley Furniture, Michaels, BevMo!, and Pacific Dental as tenants. The center was built in 1994, renovated in 2005, and was 90% occupied at the time of the sale.

Bill Asher and Patrick Kent of Hanley Investment Group Real Estate Advisors represented both the buyer and seller in the transaction.

“The shopping center had been marketed previously over the past 7 years by three other brokers. We were able to procure a highly qualified 1031 exchange buyer that understood the leasehold characteristic of the property and was capable of assuming an existing CMBS loan with over 11 years remaining,” noted Kent.

In the second transaction, Hanley Investment Group also represented the buyer, Metro Properties of Los Angeles, and seller, the Holt Group, Inc. of Vancouver, WA, in the sale of Pacific Plaza, a 23,438-square-foot multi-tenant retail property in Torrance for $10.65 million.

The 2.15-acre retail center located at 2382-2396 Crenshaw Blvd. was built in 1992, and was 100% occupied at the time of the sale.

Hanley Investment Group sourced multiple all-cash buyers within the first two weeks and closed at 100% of the list price. Jeremy S. McChesney represented the buyer and Kent and Kevin T. Fryman represented the seller.

Please see CoStar COMP ID 3133562 and 3125883 for more information on these transactions.

Article source: http://www.costar.com/News/Article/Pair-of-LA-Retail-Centers-Purchased-by-Separate-Buyers/165072?ref=/News/Article/Pair-of-LA-Retail-Centers-Purchased-by-Separate-Buyers/165072&src=rss

Watt Focuses on Reps/Warrants; 97% GSE Loan Mentioned Only in Passing

Federal
Housing Finance Agency (FHFA) Director Melvin L. Watt focused his remarks to
attendees at the Mortgage Bankers Association annual conference on the issue of
representation and warranties.  He acknowledged
that fears of being forced to repurchase large numbers of loans after they have
been sold to one of the two government sponsored enterprises (GSEs) Fannie Mae
and Freddie Mac has created unease among lenders almost from the start of the
mortgage crisis.

Watt
said that the Representation and Warranty Framework in use by the GSE’s
provides them the necessary assurances they need to purchase loans in an efficient
and responsible manner without checking each loan individually or attending every closing. They also provide
the Enterprises remedies to address situations where a lender’s
obligations to meet the Enterprises’ purchase guidelines have not been fully met. 

But he also acknowledged that the Framework did not provide enough clarity to enable lenders
to understand when Fannie Mae or Freddie
Mac would exercise their
remedy to require repurchase of a loan.  This has contributed to lenders imposing credit overlays that drive up the cost of lending
and also restrict lending to borrowers with less than perfect credit
scores or with less conventional financial situations.

He
said that these concerns have led FHFA and the GSEs to place increased
attention
and resources on upfront quality control reviews and to revise the Framework to ensure that it provides clear
rules of the road that allow lenders to manage their
risk and lend throughout the GSEs’ credit box.

Significant
improvements
have already been made to the Framework; the first which
went into effect in January 2013.  It sunsets
representation and warranties obligations related to the underwriting of the borrower,
the property or the project
for loans after a 36-month history of clean payments.  Last May there were additional refinements around
this 36-month benchmark which included allowing up to
two 30-day delinquencies during the 36 months after acquisition; notifying the
lender when loans meet that performance benchmark or pass a quality review, and
eliminating automatic repurchase demand when primary mortgage insurance is
canceled.

Watt
said that there is an ongoing process to address the issue of life-of-loan
exclusions
which allow the GSEs to require lenders to repurchase loans throughout
their lifetime because of instances of fraud or other significant noncompliance.
The current life-of-loan exclusions, he said, are open-ended and make it difficult for a lender
to predict when or if Fannie Mae or Freddie Mac will apply one of them.  The GSEs and FHFA have now reached an
agreement in principle on how to clarify and define these exclusions to facilitate
market liquidity without compromising the safety and soundness of the GSEs.

Life-of-loan exclusions will be more firmly defined so lenders will know what they are and when they apply to loans that have otherwise obtained repurchase relief. These exclusions fall into six categories: 1) misrepresentations, misstatements and omissions; 2) data inaccuracies; 3) charter compliance issues; 4) first-lien priority
and title matters; 5) legal compliance violations; and 6) unacceptable mortgage products.  Second, where
loans have already
earned repurchase relief,
new rules will make clear that only life-of-loan exclusions can trigger
a repurchase, hopefully ending
confusion on this issue.

The GSEs swill provide details on the updated
definitions soon, but Watt highlighted some aspects of the refined definitions of misrepresentations and data inaccuracies.   First, there will be a minimum number of
loans that must be identified with misrepresentations or data inaccuracies to
trigger the exclusion.  This will allow
the GSE’s to act if a pattern emerges but not to revoke relief already granted because
of problems with a single loan.  Also a “significance” requirement is being added which will require the GSEs to
determine that the loan would have been ineligible for purchase initially if the loan information had been accurately reported.

Watt
said there still remains
more work to be done on the Framework and FHFA is already focused on developing an independent dispute resolution process and identifying cure mechanisms and alternative remedies
for lower-severity loan defects. FHFA also continues to make progress on issues concerning servicing representations and warranties, and has
reached an agreement
in principle on modifying
compensatory fees and foreclosure timelines.

Some
analysts had expected that Watt might announce that the GSEs would start
purchasing mortgages with loan-to-value ratios between 95 and 97 percent.  He did not go that far but did say that FHFA
is working with the GSEs
to develop sensible and responsible guidelines for
mortgages with 3 percent downpayments. He said he believed that the GSEs will
be able “to responsibly serve a targeted
segment of creditworthy borrowers with lower-down payment mortgages by taking into account
“compensating factors.” While this is a much more narrow effort than our work on the Representation and Warranty
Framework, it is yet another
much needed piece to the broader access
to credit puzzle.”  Further details, he said, would be available
about this new guidelines in coming weeks. 

Development
of the Common Securitization Platform (CSP) is progressing, Watt said.  The governance structure and operating
agreement have been revised and the Board is close to being able to announce
the selection of a Chief Executive Officer to run the CSP’s governing entity Common
Securitization Solutions (CSS).  Each GSE
has designated staff to work at the CSS location and during the year this team
has been developing the platform.  FHFA
and the GSEs are also working on a single security to reduce trading
disparities between Fannie Mae and Freddie Mac.

In addition to these issues and proposals, Watt said FHFA continues to work on other priorities as well.  Tight credit remains a problem and many
individuals and families are still facing the possible of foreclosure.  FHFA is evaluating ways to refine and improve
loss mitigation and foreclosure prevention policies at the GSEs and seeking ways
to extend access to credit.

Finally
Watt also announced that FHFA has extended the comment period for a Proposed Rule dealing with the membership requirements of the Federal Home Loan Banks for another 60 days to January 12,
2015. 

Article source: http://www.mortgagenewsdaily.com/10202014_mel_watt_mba_convention.asp

MBS RECAP: Bond Markets Refreshingly Resilient Against Stock Market Gains

Treasuries and MBS didn’t end up making much progress today.  Fannie 3.5s are only 2 ticks higher than they were at the close on Friday and 10yr yields aren’t even 1bp lower.  But bond markets were still arguably successful.  Reason being: stocks advanced by nearly 20 points in the SP.

Why is this significant?  Because equities have been the primary guidance giver for bond markets recently, and a 20 point move in the SP is not the sort of thing that bonds have been able to overcome until today.  That could mean today was simply less consequential, it could also be a sign of growing technical support in bond markets.

Whatever the case, the lack of movement means we remain in “post-volatility limbo.”  This refers to the 3-5 days  of muted movement following a dramatic spike in bond markets.  It leaves the door open for more positivity without guaranteeing it.  Either way, it won’t be long before we see rates commit to a directional move.  Even though the relationship broke down a bit today, stocks remain likely to play a large role in that decision.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/400131.aspx

MBA’s Stevens: No Sense Pining for the way it used to be

David Stevens, President
of the Mortgage Bankers Association (MBA), told an audience attending the association’s
s annual convention in Las Vegas that the rules for Qualified Residential
Mortgages will be, as rumored, released on Wednesday. This rule, which was sent
back to the drawing board two years ago after housing stakeholders complained
it would shut down mortgage lending will, in this iteration, he said be aligned
with the Qualified Mortgage Rule and will not have steep downpayment or strict
debt-to-income requirements.  He credited
the industry and consumer groups for advocating on the issue.   

Stevens pointed to other
accomplishments MBA and other industry groups have made over the past year but
said there is still a lot wrong with housing
Many people seem to have forgotten that housing is good for the
economy.  Homeownership helps families,
communities, and the economy but today it is being publicly devalued.  At the same time housing is being pulled
along by the economic recovery rather than fulfilling its historic role of
doing the pulling

Homeownership, he said,
remains the single best idea for building family wealth and growing the middle
glass; housing wealth is far more broadly distributed than that from the stock
market and so when the housing industry argues for better access to credit it’s
not an argument for the interests of the industry, it is sound policy advocacy
for family, national and local economies, and for a stronger middle class.

But that access isn’t getting any easier.  Originations are declining and aversion to
risk is a big reason why.  Lenders are
increasing requirements for credit scores, builders are building fewer
lower-priced homes because of concern about that market.  There is change taking place throughout the
system.  Minorities and women are making
up a growing portion of potential borrowers he said, and this “will likely
cause stress to the square peg/square hole underwriting mentality.”  And further he asks, “Isn’t tight credit our
own fault?”

MBA’s figures show that
credit availability is about one quarter of what it is in a more typical year
and credit overlays are one key factor. 
While FHA allows scores as low as 580, lenders feel it is too risky and
credit scores below 640 have been virtually eliminated from the industry. By
contrast, credit standards are easing for high income and wealthier
borrowers.  The result is a mortgage market that can be summarized as “Strength
at the top, weakness at the bottom.”

The recent HMDA data
report confirms that regulation-induced credit overlays are making credit
harder to get
for the very borrowers the rules were intended to protect.  “As
a result, we’re seeing a clear opportunity gap.  Mortgage credit is most
available to those who need it least.  This
is not right, not tolerable, and not good for families or the economy. 
We’ve got to bridge this divide.”

And it can’t be done by continuing to bash the failings of the past, it’s time
to change the dialogue and no one, he said, is better positioned to do this
than the Obama Administration.  “It’s time to acknowledge all the
safeguards added to mortgage lending.  It’s time to start talking about
housing finance like the beneficial activity that it is.  It’s time to let
people know it’s OK to start trusting the system again.  Most of all, it’s
time to change the dialogue of distrust to a dialogue of confidence.”

Stevens said lenders want to lend more but while they are worried about declining
volume they are even more worried by an uncertain, confusing and intimidating
regulatory and enforcement environment.  Regulators need to hold lenders
accountable for egregious behavior, he said, but they also have to create
better clarity for lenders on what they will be held accountable for down the
road.  Three factors are at play:  Unclear rules; “zero-tolerance”
approaches to enforcement; and conflicting, duplicative regulatory incentives.  “It ultimately piles on so deeply that nobody
wants to take any risk,” he said.  

There are some things MBA members can do to change the dialogue and some things
that will not change, Stevens said, first suggesting that members work to make
FHFA Director Watt “wildly successful” as many of the things on his agenda are
on MBA’s as well.  It is also time to
modify key rules, leverage HUD Secretary Castro’s good start on improving
access to credit; work with the Consumer Financial Protection Bureau to modify
rules to ensure the enforcement actions are the exception not the rule.  No single remedy is a silver bullet, he said,
but each problem that gets fixed could help tens of thousands of creditworthy
borrowers qualify for a loan.

And among those things
that will not change is the expense of running a mortgage lending business, but
working with regulators to reduce uncertainty and risk will improve
sustainability and give more stability and confidence to the industry.  Mortgage lending is going to be a smaller
industry of professionals who have the expertise to manage the increasing
complexity; the fly-by-night operators are gone

And, “The CFPB is here to stay.  Anyone who’s not reconciled to that fact
should get over it.  Of course the Bureau’s not perfect – neither are we. 
But they’re performing a necessary function with energy and they are devoted to
their mission.  Our task is to challenge them constructively to make them
better, not to automatically drag our heels.”

The common thread, he concluded, is that it does no good to pine for things to
be the way they used to be.  “The sooner
we adjust to new realities – challenging them when it makes sense – the sooner
we’ll bend the future our way, instead of being dragged into it kicking and
screaming.  Sure, venting is therapeutic.  But every breath we waste
venting is one we can spend instead to advocate sound changes.

Article source: http://www.mortgagenewsdaily.com/10202014_mba_david_stevens.asp

Newmark’s Grand Leasing Assignment

Newmark Grubb Knight Frank has landed the high-profile leasing assignment for Grand Central Terminal’s retail space, a coup for the company which has made retail a priority in its global expansion.

The Metropolitan Transportation Authority selected Newmark from eight bidders for the terminal, which has about 150,000 square feet of retail space. Newmark was chosen for its technical expertise, local knowledge and because it was the…

Article source: http://online.wsj.com/articles/newmarks-grand-leasing-assignment-1413766283?mod=residential_real_estate

J.P. Morgan Seeks Tax Aid on Buildings

As a mayoral candidate, Bill de Blasio denounced city tax breaks for large corporations. Now he is considering a pitch by an employer for fewer New York jobs instead of more.

J.P. Morgan Chase Co., one of the city’s largest employers, has approached New York City with a request for tax breaks and other incentives valued at hundreds of millions of dollars to help build a new two-tower headquarters on Manhattan’s far West Side,…

Article source: http://online.wsj.com/articles/j-p-morgan-seeks-tax-aid-on-new-york-city-buildings-1413595535?mod=residential_real_estate

To Residents, Ho-Ho-Kus Means Good Things

When Shannon Taliercio began planning to move from Brooklyn to the suburbs, she considered several New Jersey communities with good schools, easy commutes to Manhattan and vibrant downtowns.

But none, she says, also had the same small-town charm and active community spirit of Ho-Ho-Kus, a borough in Bergen County, where she has lived for four years.

“My daughter is in kindergarten right now…and I’m pretty sure I know all…

Article source: http://online.wsj.com/articles/to-residents-ho-ho-kus-means-good-things-1413592304?mod=residential_real_estate

Mortgage Rates Below 4%

Mortgage rates this week fell to their lowest level since June 2013, mortgage-finance company Freddie Mac said Thursday, as the jitters being felt in the stock and bond markets ripple throughout the economy.

U.S. government bond yields, which influence mortgage rates, plunged on Wednesday as traders reassessed growth outlooks in Europe and fled to the safety of the U.S. The benchmark 10-year Treasury dipped as low as 1.873% on…

Article source: http://online.wsj.com/articles/mortgage-rates-fall-below-4-1413480380?mod=residential_real_estate