August 31, 2016

Chinese Developers Pour Cash Into U.S. Real Estate

For eight years, a pair of local developers gradually readied a 42-acre strip of waterfront land 10 miles south of downtown San Francisco for a major project, steering it through local land-use approvals.

Now, a group of major Chinese developers is poised to do the heavy lifting. The venture of Greenland Holding Group, Ping An Trust and other investors paid $171 million last month for the site that juts into San Francisco Bay.

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Airbnb Income: How It Can Mess With Your Mortgage ‘Refi’

Room-rental services such as Airbnb Inc. are blurring the line between residential and commercial property. That is causing problems for some homeowners looking to refinance mortgages. (Read what Airbnb hosts need to know.)

Big banks including Bank of America Corp. and Wells Fargo Co. are subjecting some refinance customers who rent rooms to additional scrutiny. Some borrowers have been told they were no longer eligible for…

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It’s one thing to HOPE that any particular selling spree in bond markets is merely the product of a few temporary events that can be easily explained away.  It’s another thing to actually bank on it.  I don’t ever flat-out recommend that you disregard seemingly significant market movements.  

But if it’s a Friday or Monday in the summertime, if trading is light, if the biggest part of the move happens in the afternoon, and if the news being blamed for the move doesn’t seem particularly “new,” then I will say you can at least hold out some hope that the selling-spree might not be the harbinger of doom it initially seems to be. 

Still, no matter what I say, it’s impossible to see the weakness we saw on Friday and be completely at ease that it was all part of the plan.  So when we have the pleasure of watching today trade in a completely opposite way, there’s only one word to describe it: WHEW!

2016-8-29 close

The chart shows how flat MBS were on the approach to Jackson Hole.  Then there was a clear and mild positive response to Yellen’s speech before an equally negative response to Fischer’s comments.  From there, bonds took on a life of their own for the aforementioned reasons.  Treasuries and MBS are both right back in the pre-FOMC range.  As such, we now turn to the rest of the week’s economic data, which can act to bolster or mitigate the Fed’s case for a rate hike (or two) in 2016.

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M West Holdings Acquires Park Wilshire Apts in Westlake

Private investors sold the 170-unit Park Wilshire Apartments at 2424 Wilshire Blvd. in Los Angeles, CA to M West Holdings for $27.4 million, or about $161,000 per unit.

This was the seller’s downleg in a 1031 Exchange.

The eight-story property totals 119,104 square feet in the Westlake submarket.

The buyer plans to renovate and restore the asset.

Wells Fargo Bank financed the acquisition with an $18.34 million loan.

Ron Harris and Greg Harris of Marcus Millichap’s Institutional Property Advisors represented both parties in the sale.

Please see CoStar COMPS #3660831 for more information on this transaction.

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Developers Bet Big on Brooklyn Office Demand

An investment group has obtained the necessary financing to break ground on a $400 million office and industrial development in Williamsburg, marking the latest big bet on Brooklyn’s growing popularity as a workplace.

The venture led by Rubenstein Partners LP cut a deal with Wells Fargo Bank and Natixis Real Estate Capital LLC for a $197 million construction loan for the 500,000-square-foot project at 25 Kent Ave. The eight-story…

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New York Life Sells Via Verde Corp Plaza in San Dimas

Michael G. Rademaker, founder and CEO of Upland, CA-based MGR Real Estate, Inc. has added the Via Verde Corporate Plaza at 140 and 160 Via Verde in San Dimas, CA to his portfolio, paying New York Life Investment Management LLC $19 million, or about $206 per square foot, for the assets.

Built in 2000, the office properties total 92,187 square feet on 6.9 acres in the eastern SGV submarket of Los Angeles County. 140 is currently 94 percent leased and 160 is fully leased to multiple credit-quality tenants.

Lynn Yangchana and Michael Rademaker with MGR Real Estate, Inc. represented the buyer. Paul Jones, Blake Bokosky and Kevin Shannon of Newmark Grubb Knight Frank teamed up with Ron Heim and John Bibeau at Cushman Wakefield and Shaun Moothart with CBRE in representing the seller.

Please see CoStar COMPS #3648277 for more information on this transaction.

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Mortgage Rates Slightly Higher After Fed Speakers

Mortgage Rates were unchanged to slightly lower this morning following the much-anticipated Jackson Hole speech from Fed Chair Janet Yellen.  Markets were looking for clues about upcoming rate hikes, but true to form, Yellen played things close to the vest.  Underlying bond markets initially indicated higher rates due to Yellen’s comment about the case for rate hikes having strengthened in recent months, but ultimately, this isn’t anything markets didn’t already know.  As such, bonds swung back in the other direction, thus providing a drama-free backdrop for mortgage rates.

Unfortunately, that backdrop didn’t stick a around as other Fed speakers gave investors more cause for concern.  Underlying bond markets weakened into the afternoon and most lenders raised rates moderately.  Even so, rates themselves will not have changed day-over-day, but closing costs for any given rate can vary slightly.  

The onus for more pronounced market movement is on next week’s deluge of economic data.  Risks are more balanced now in terms of locking/floating.  Ultimately, we’re still waiting for a break in the range, and strategy will adapt accordingly, depending on which direction rates begin to move.

Loan Originator Perspectives

Initial reaction to Yellen was negative, but we’ve recovered for now.  Nothing lost or gained, at these levels locking in makes the most sense.   –Constantine Floropoulos, VP, The Federal Savings Bank

If you didn’t lock prior to Jackson Hole speech by Yellen, I would float over the weekend.   So far, bond traders like what she has to say and bonds are at their best levels of the past few days.   Things could get volatile, so stay in close contact with your loan officer incase the market moves quickly the other direction.  –Victor Burek, Churchill Mortgage

Today’s Best-Execution Rates

  • 30YR FIXED – 3.375 – 3.5%
  • FHA/VA – 3.0 – 3.25%
  • 15 YEAR FIXED – 2.75%
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • In the biggest of pictures, “global growth concerns” remain the driving force behind the long-term trend toward lower rates
  • Amid that trend, periodic corrections toward higher rates can and will happen.  These can happen for no apparent reason, or they can be brought on by changes in expectations surrounding central bank policy at home and abroad, as well as geopolitical and systemic risks

  • Time horizon and risk tolerance are 2 variables to consider when it comes to locking.  If you have plenty of time and don’t mind losing some ground, set a limit as to how much higher rates could go before you’d lock to avoid further losses, and then float in the hopes of never seeing that limit.
  • In the shorter-term, it’s always good to look for lock opportunities after rates have been moving lower or sideways repeatedly, especially if they’ve since begun to move back up in any sort of consistent way. 
  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method).

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CBRE Secures $65 Million of Debt Financing for Kennedy Wilson

Kennedy Wilson secured $65 million of debt financing for the acquisition of a 386-unit multifamily community in coastal Camarillo, CA that it purchased for $81 million.

CBRE’s Brian Eisendrath, Brandon Smith and Annie Rice arranged the seven-year, floating-rate on behalf of the borrower, placing the loan through Freddie Mac at a rate of LIBOR + 2.48%.

University Glen is a 386-unit multifamily property at 1 University Dr. in Camarillo, CA. Kennedy Wilson will be renovating unit interiors, improving amenities and creating a new community center, leasing office, fitness center and clubhouse at the property, for which it holds an 82-year ground lease.

Article source:$65-Million-of-Debt-Financing-for-Kennedy-Wilson/184410?ref=/News/Article/CBRE-Secures-$65-Million-of-Debt-Financing-for-Kennedy-Wilson/184410&src=rss

MBS RECAP: Yellen Passes Without a Trace. What Now?!

All eyes were on Yellen’s 10am speech from Jackson Hole, then all eyes were closed as traders fell asleep from boredom.  Yellen said nothing we didn’t already know, although one headline (about the case for a rate hike being stronger) sent rates initially higher.  Once markets realized they already knew that, rates moved back down to the lows of the week.

Comments from Fed Vice Chair Fischer followed shortly thereafter and pushed bonds back in the other direction.  Unfortunately this move was exacerbated by lower volume and liquidity of a summertime Friday afternoon.  Too, markets could be justifiably concerned about next week’s data putting a hawkish spin on a relatively neutral Yellen speech.  

On a positive note, the weakness brings bonds only right top the edge of the recent range. 

The bigger question is: What Next?!

What indeed!  As the case continues to be, one thing the Fed is serious about is the fact that they’re “data dependent.”  With that in mind, there is a ton of data next week.  All the normal “first week of the month” top-tier releases are coming out, including NFP on Friday.  If the tenor of the data clearly supports the Fed’s ability to make a firmer commitment (either to hiking or waiting), this is when we might expect to see a more pronounced move outside the recent range.

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CoStar’s People of Note (Aug. 26)

It’s time to update those contact managers with CoStar’s People of Note, reporting news on significant new CRE hires and promotions. This week’s issue includes the following markets: Chicago, Dallas / Ft. Worth, San Diego, Boston, Tampa / St. Petersburg, Orange County, Atlanta, Texas and more!


Ulbrich to Succeed Dyer as CEO of Global CRE Firm JLL

By Randyl Drummer

JLL’s Colin Dyer (pictured, left) announced he will retire and step down next month after 12 years as the firm’s chief executive officer.

Dyer will be succeeded by Christian Ulbrich (right), whom JLL had signaled would be Dyer’s successor after elevating him to president of the global real estate services company in February as part of its overall leadership succession plan.

CoStar’s People of Note is published each Friday covering the latest commercial real estate executive level promotions and new hires.
Click on the headline of each article to jump to full coverage.
Follow the news on Twitter @TheCoStarGroup and @JSumner2.

Send new executive hires and promotion announcements to


NAI Robert Lynn Elevates Albert to Principal

By Tessia Knight

NAI Robert Lynn has promoted Chad Albert, the youngest broker in the country to receive the SIOR designation, to principal. Albert is now the youngest principal and executive vice president at the firm.

Albert joined NAI Robert Lynn as an industrial broker upon graduating from Indiana University in 2008. He worked his way up the ranks from associate to market director before being named vice president in 2012 and executive vice president in 2013. During his time with NAI Robert Lynn, Albert and his business partner, Mark Miller, have been the firm’s top-producing team, having served more than 450 clients


Abramson Named Principal, Shareholder at Lee Associates

By Jody Thompson

Lee Associates Commercial Real Estate Services in North San Diego County has named Jeff Abramson as principal and shareholder with the firm.

Abramson joined Lee Associates in 2013, where he specializes in representing buyers and tenants in office, industrial and investment-type properties across the Southern California region. Prior to Lee Associates, Abramson was a senior vice president at the former Cassidy Turley.


Ruhmann Named Partner, Portfolio Manager at TA Realty

By Jeff Johnson

Sean Ruhmann has joined TA Realty as partner and portfolio manager. Based in the Boston office, Ruhmann will work to expand the firm’s business and advance investment strategies and serve on governance committees.

Ruhmann previously served as partner and director of private markets research at NEPC. Before that he was a vice president within Goldman Sachs’ real estate investment banking group. He has also served as an associate within the real estate and lodging investment banking group at Banc of America Securities.


Cushman Promotes Urquhart-Bradley as Part of Leadership Change in Valuation Advisory Unit

By CoStar News Staff

Cushman Wakefield announced the promotion of Nicole Urquhart-Bradley, MAI, FRICS to the role of president of its Valuation Advisory unit for the Americas. The firm also disclosed that John Busi, a 35-year veteran of the firm who was named global head of the VA group in 2013, has left the company.

Urquhart-Bradley previously was the U.S. lead for the group responsible for conducting appraisals and property valuations in support of acquisitions, financings and recapitalizations.


Carr Joins Cushman Wakefield’s Senior Housing Team

By Julian Thompson

Paul Carr has joined the Tampa-based senior housing team at Cushman Wakefield as a senior managing director.

Carr has more than 12 years of experience in capital markets, and his work on Cushman Wakefield’s capital markets group has focused on the acquisition, disposition and analysis of office and industrial properties throughout Florida. Prior to joining Cushman Wakefield, Carr worked in capital markets at DTZ and Cassidy Turley, and also was a member of CBRE’s investment properties group and Trammel Crow Company’s capital markets group.


Wallace Joins Sares Regis as SVP

By Ana Mendoza

Heather Wallace has joined Sares-Regis Multifamily Property Management as a senior vice president in the firm’s Irvine, CA office.

With more than 13 years of experience in the multifamily industry, Wallace will focus on business development as well as strategic planning across the Western region. She was previously at Alliance Residential Company, where she oversaw operations, acquisitions and development for the multifamily company. Wallace serves on the board of directors of the Housing Industry Foundation and is a member of the National Apartment Association.

StreetLights Residential Launches New Atlanta Office; Taps Fred Kay to Spearhead Branch as SVP of Development

By Trey Riddle

Follow the news on Twitter @TheCoStarGroup and @JSumner2.
Check out last week’s edition of People of Note.

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