May 1, 2016

Does The Bank of Mom and Dad Help Homeownership?

Does a financial boost from mom and dad make it more likely a young person will buy a home?  It depends.  And that might change.

Those statements are more or less the bottom line from a working paper prepared by three University of Southern California professors, Dowell Myers, Gary Painter, and Julie Zissimopoulos that is part of a larger study on parental financial transfers to adult children.  The three based their work on two data sets, Panel Study of Income Dynamics (PSID) and the Health and Retirement Survey (HRS), that provide information on parental financial transfers, adult children’s transitions into homeownership, and a variety of child and parent demographic, social, and financial characteristics.  The working paper is profiled by Myers and Fannie Mae’s Patrick Simmons on the FM Commentary blog

Homeownership rates across all demographic groups have fallen since the beginning of the Great Recession but the rate among 25 to 34 year olds has been especially hard hit, dropping 10 points from the nation’s peak in 2006 to 37 percent in 2014.  Fannie Mae’s National Housing Survey has found the upfront expenses of buying a home to be the largest barrier to homeownership among that young age group.

Parental financial assistance enables some young adults to manage the downpayment and closing costs and the USC researchers explored the prevalence of such assistance and the degree to which is helps the recipients transition into homeownership.  The working paper estimates the effect of financial transfers on homeownership transitions independent of child and parental characteristics and examines how the impacts of parental financial transfers vary with children’s age and race/ethnicity.

First, the research found that, among adult children ages 20 to 49 who are not homeowners only about one in 17 receive substantial financial help from their parents.  The HRS study defines this as cumulative transfers for any purpose of at least $5,000 within the preceding two years and the PSID as $2,500 over a one-year period.

There was substantial variation in the likelihood of receiving parental help according to the age, race, and ethnicity of the child and the wealth of the parent. “For example, children of parents in the highest quartile of the wealth distribution are about eight times more likely to receive substantial transfers than are those with parents in the lowest quartile, and non-Hispanic white children are several times more likely to receive a transfer than their Hispanic and black counterparts.”

When a child does receive assistance the impact on homeownership is notable.  The HRS data (collected between 1998 and 2004) shows that children who receive assistances have a 23 percent greater chance of achieving homeownership within the two-year period than those who do not.  After controlling for parental wealth and a variety of other parent and child characteristics, the increase in the probability buying is still 13 percent.  

The second study, with a smaller sample and data collected in 2012-2013 showed no significant association between financial transfers and the likelihood of homeownership.  This may be because the study period was one in which home prices were recovering but employment, income, and credit access were lagging.

Age and ethnicity also enter the equation and the HRS analysis showed that children receiving a transfer from parents while aged 20-24 show no increase in homeownership, possibly indicating that such transfers were targeted at educational expenses.  Non-Hispanic white children who receive a transfer demonstrate an increase in homeownership but this result is not observed for black children.

The parental provision of financial assistance, potentially an alterable behavior, appears to play a significant role in children’s transition into homeownership.  But the findings that children from families with higher-wealth parents are much more likely and that young minorities are substantially less likely to receive parental financial help suggests that this assistance could potentially weaken in the aggregate as the nation’s young-adult population continues to diversify.

The authors conclude, “As the housing industry looks to the large and racially and ethnically diverse Millennial generation as a new source of home purchase demand, the potential and limitations of the ‘Bank of Mom and Dad’ need to be kept in mind.”

Article source: http://www.mortgagenewsdaily.com/04292016_downpayment_assistance.asp

SRS Adds SoCal Investment Sales Team

from left to right:  Christopher W. Tramontano, senior vice president; John Redfield, vice president; and Matthew G. Hardke, first vice president with SRS Real Estate Partners' Southern California Multi-Tenant Investment Sales Team
from left to right: Christopher W. Tramontano, senior vice president; John Redfield, vice president; and Matthew G. Hardke, first vice president with SRS Real Estate Partners’ Southern California Multi-Tenant Investment Sales TeamSRS Real Estate Partners has added a new Southern California multi-tenant investment sales team with the addition of Chris Tramontano, John Redfield and Matt Hardke in the firm’s Newport Beach, CA office.

The new team will focus on multi-tenant investment transactions across the Southern California markets and across the country, with an emphasis on anchored and shadow-anchored retail centers. The team will work in close parallel with the national net lease (NNN) group established by Matt Mousavi and Patrick Luther.

Tramontano joins the firm as a senior vice president. He brings more than 15 years of experience, most recently serving as a managing director with Faris Lee Investments, where he was directly involved in more than $1 billion in retail and mixed-use transactions. His experience includes numerous grocery-anchored shopping centers, single-tenant transactions, tenant-in-common (TIC) deals, portfolio sales, core multi-tenant centers, and distressed asset sales throughout the U.S.

Redfield joins the firm as a vice president. He brings more than nine years of experience, most recently serving as a director with Faris Lee Investments, and on the principal side before entering brokerage. His financial knowledge helps investors realize maximum value for each aspect of a property, defining market and financial levels, as well as assisting in acquisitions, dispositions and advisory in more than $350 million in completed commercial real estate transactions.

Hardke joins the firm as a first vice president. He brings more than two years of experience, most recently as a top agent at Marcus Millichap. He began his career in the financial advisory and professional services sector. Now in real estate, he focuses on multi-tenant retail investment properties including grocery-anchored centers, single-tenant transactions, distressed asset sales and repositioning opportunities throughout the region.

“[Chris, John and Matt] bring more than 25 years of multi-tenant investment sales experience and a multi-billion dollar closing track record,” noted Woody McMinn, president of North American brokerage for SRS. “The team will be rounding out the capital markets and investment services practice in that region and will further complement the dominant tenant and landlord representation teams led by Garrett Colburn and Terrison Quinn.”

Article source: http://www.costar.com/News/Article/SRS-Adds-SoCal-Investment-Sales-Team/181599?ref=/News/Article/SRS-Adds-SoCal-Investment-Sales-Team/181599&src=rss

CoStar’s People of Note (Apr. 29)


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: Washington DC, New York City, Dallas / Ft. Worth, Northern New Jersey, South Florida, Boston, Chicago, Cincinnati, Detroit / Grand Rapids, Portland, Inland Empire, Los Angeles and Houston.

WASHINGTON DC

Hilton Appoints RLJ Exec to President, CEO of Hotel REIT

By Bryce Meyers

Thomas J. Baltimore Jr. has resigned as president and CEO of RLJ Lodging Trust (NYSE: RLJ) to become president and CEO of Hilton Worldwide’s (NYSE: HLT) planned hotel REIT.

Baltimore co-founded RLJ along with founder and chairman Robert L. Johnson in 2000 and has served as CEO of the self-advised, publicly traded REIT since its IPO in 2011. Returning to Hilton after serving as its vice president of gaming development and vice president of development and finance, Baltimore will be sworn in to his new role on May 16th.


NEW YORK CITY

Steinbridge Group Taps Davis as CEO

By Justin Sumner

Steinbridge Group has selected Tawan Davis as its chief executive officer, tasked with overseeing the investment firm’s day-to-day operations as well as its transaction pipeline.

Davis most recently served as CIO and president of Peebles Capital Partners. Before that, Davis led public-private partnerships with the New York City Economic Development Corporation (NYCEDC), where he analyzed, structured and executed nearly $1 billion in transactions. He has also held investment management positions with Prudential Real Estate Investors (PREI) and Goldman Sachs while serving as an adjunct professor of finance with NYU’s Schack Institute of Real Estate.


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 news@costar.com.

DALLAS / FORT WORTH

Associa Names Brock EVP and CIO

By Jean Bradley

Andrew Brock has been promoted to executive vice president and chief information officer of Dallas-based association management firm, Associa.

Brock previously served as Associa’s senior vice president of operations. In his new position, he will oversee acquisition integration, systems implementation, strategic planning and analysis, corporate real estate, corporate rate security and the project management office. Brock served as director of global planning and analysis with PepsiCo, Inc. and with the finance department of Kraft Foods before that.


NORTHERN NEW JERSEY

Porreca Joins Avison Young as Principal

By Justin Sumner

Kenneth Porreca has joined Avison Young in New Jersey as a principal in the firm’s Morristown, NJ office. In his new role, Porreca will lead the company’s business development efforts in Bergen and Hudson Counties and across the Tri-State region.

Porreca most recently served as a managing director with Newmark Grubb Knight Frank, where he was recognized as a top producing office leasing specialist, receiving a CoStar Power Broker award the last four years running. He has more than a decade of commercial real estate experience, having completed office leasing assignments for numerous companies.


Cushman Wakefield Acquires Gibson Realty, Adds 33 Professionals to Bolster Company’s Regional Presence

By Esmeralda McKie


NEW YORK CITY

Pinover Joins DLA Piper to Chair NY Real Estate Practice

By Justin Sumner

Eugene Pinover has joined DLA Piper as a partner in New York City and chair of its New York Real Estate practice. He will also serve on the firm’s global real estate steering committee.

Pinover was most recently with Willkie Farr Gallagher, where he chaired their real estate department for more than 20 years. Pinover’s practice areas include the representation of domestic and foreign real estate companies, REITs and institutional investors in acquisitions, sales, joint venture, restructuring, debt and equity, financing and development projects. He serves on the board of VEREIT (NYSE: VER) and is a member of the American College of Real Estate Lawyers.


BOSTON

Procaccianti Group Taps Sacco to Lead Hotel Division

By Bryce Meyers

The Procaccianti Group has selected Paul Sacco to serve as president and chief development officer of the firm’s hotel division, TPG Hotels Resorts. Sacco will continue to identify growth initiatives and drive TPG’s strategic direction.

Sacco joined TPG in 2013 after previously serving as senior vice president of development of all North American brands at Starwood Hotels Resorts Worldwide. Sacco’s hospitality career includes positions with Swissôtel, Pyramids Hotels, US Franchise Systems and Omni Hotels.


Bilfinger GVA Bolsters UK Commercial Offices Team in
Brum, Adding James Walters to Midlands Office

By Chris Borland


Article source: http://www.costar.com/News/Article/CoStars-People-of-Note-Apr-29/181740?ref=/News/Article/CoStars-People-of-Note-Apr-29/181740&src=rss

MBS RECAP: Month-End Buying Boosts Bond Markets

  • European traders were month-end sellers, pushing rates higher overnight
  • US bond markets battled back during the domestic session
  • Treasuries were green at the 3pm close and MBS are still green, barely
  • Not much impact from economic data, although data was generally supportive of longer-term themes (slowing economy)

Bond markets had a completely inoffensive month-end session with Treasuries and MBS ending up essentially unchanged versus yesterday’s excellent (relative) closing levels.  When compared against 3 weeks ago, current levels leave a bit to be desired, but compared to where it looked like we were heading at the beginning of this week, we’ll take it!

10yr yields have moved right back to the upper edge of their previous range (1.84%) and managed to trade below there late this afternoon.  

Next week will be critical–not just because of the economic calendar, but mainly because it will let us know how much of this week’s improvements were driven by “month-end” bond-buying.  If there is a big distortion, we’ll know it right away on Monday.  If bonds continue holding near current levels or better, it’s “game-on” for re-entering the awesome, low range that we enjoyed in February and early April.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/607299.aspx

Office Lease Up (April 25) Nuclear Regulatory Commission Renews Full Building Lease in White Flint North

The Nuclear Regulatory Commission (NRC) has extended its full occupancy lease at Two White Flint North in North Bethesda, MD for the second time, agreeing to a 347,922-square-foot renewal with building owner, Lerner Enterprises.

The 11-story office building houses the corporate offices of NRC, an independent agency of the General Services Administration (GSA) that has headquartered in the building since the property delivered in 1993, according to CoStar information.

Lerner developed Two White Flint North and its sister building, One White Flint North, across from the White Flint Metro Station and immediately north of the Capital Beltway at 11545-11555 Rockville Pike. The GSA fully occupies the 18-story One White Flint North building, which it acquired after Lerner and Tower Cos. developed the property in 1980. By Bryce Meyers


Daiichi Sankyo Leases 241,000 SF in Basking Ridge

Daiichi Sankyo, Inc., the U.S. subsidiary of pharmaceutical company Daiichi Sankyo Company Ltd., has leased 241,350 at 211 Mount Airy Rd. in Basking Ridge, NJ.

The company is consolidating several business segments into its new U.S. headquarters beginning in 2017, enabling increased efficiencies and innovation in its existing and emerging therapeutic areas including cardiology, oncology, pain management and other areas.

The firm’s new space is located within the three-story, 301,800-square-foot, 4-Star office building that was originally constructed in 1975 and renovated in September 2015. The building previously served as the headquarters for Avaya, Inc., which will remain in a portion of the first floor.

Timothy Greiner and Kenneth Porreca with Newmark Grubb Knight Frank represented the landlord, Onyx Equities LLC and Rubenstein Partners LP. By Justin Sumner


Medallia Takes 210,000 SF in New Hines/Pearlmark Office Project in San Mateo

Palo Alto-based customer experience software developer Medallia has leased 210,115 square feet at 400|450 Concar, a new office complex under development by Hines and its private-equity partner in the project, Pearlmark.

The lease encompasses more than two-thirds of the 305,000-square-foot complex on 3.3 acres. Medallia, fresh off a $150 million growth equity investment led by venture capital firm Sequoia Capital, plans to relocate its headquarters to the new location near U.S. Highway 101 and State Route 92 near the Hayward Park Caltrain station in June 2017, with completion of the office development slated for the last quarter of this year.

Josh Rowell and Craig Kalinowski of Newmark Cornish Carey represented Hines, the building’s developer, co-owner and manager. By Randyl Drummer


Equifax Signs 100,000-SF Lease at One Atlantic Center

Equifax (NYSE: EFX) signed a 10-year lease for 100,000 square feet of office space at One Atlantic Center in Midtown Atlanta.

The consumer credit reporting agency plans to take occupancy this August of floors 18-22 in the 1.1 million-square-foot, 50-story office tower.

Built in 1987, One Atlantic Center is located at 1201 W. Peachtree St. NW. The Class A office tower earned LEED Gold certification in 2014 and is anchored by DLA Piper, Bryan Cave LLP and Affiliates and Alston Bird LLP, an international law firm that utilizes 16 floors in the building for its headquarters.

Peter Shelton of Colliers International represented Equifax in negotiations, while John Heagy and Tom Oliver of Hines represented ownership in-house. By Lewis Sloan


Capital One Bank Leases 83,000+ SF at Eastgate Metroplex

Tysons Corner, VA-based Capital One Bank (NYSE: COF) signed a 10-year lease for 83,069 square feet at the former Dillard’s Building located at 14002 E. 21st St. South in Tulsa, OK.

The three-story, 261,480-square-foot office building was constructed in 1985 within the Eastgate Metroplex, an indoor mixed-use business and retail complex located minutes from I-44, I-244 and Hwy. 169 in east Tulsa.

Gerry Chauvin of Philcrest Properties represented the landlord in this agreement. By Emily Kukwa


Hasbro Doubles Space in Burbank

Global creator of play experiences Hasbro, Inc. (NASDAQ: HAS) has leased 79,695 square feet at the Media Studios North Phase 4 office building at 3333 W. Empire Ave. in Burbank, CA.

The tenant will relocate from its 45,000-square-foot space at the nearby 2950 N. Hollywood Way building to its new space by the fourth quarter.

The five-story, 207,885-square-foot, 4-Star, LEED Gold-certified office building was constructed in 2005 on 2.8 acres in the Burbank submarket of Los Angeles County, at the northwest corner of N. Ontario St.

The property is part of the 1.2 million-square-foot Media Studios North office park, owned by a joint venture between Shorenstein Properties and The Worthe Real Estate Group, and home to multiple companies including Technicolor and Kaiser Permanente.

Michael Dalton with Cushman Wakefield teamed up with Jonathan Larsen at Avison Young in representing Hasbro. Brad Feld with Madison Partners represented the landlord. By Justin Sumner


BakerHostetler Leases 62,000 SF on Scioto Mile in Downtown Columbus

Leading national law firm BakerHostetler has signed a 10-year lease for approximately 62,000 square feet at 200 Civic Center Dr. in the River South District of Columbus, OH.

The 239,532-square-foot office building delivered in 1983 on downtown Columbus’ Scioto Mile. The former tenant, Columbus Gas, sold the property in 2013 for $15 million to current owners Robert Meyers and Casto Partners.

BakerHostetler’s lease includes the 10th through 13th floors of the 14-story building. The Cleveland-based firm will relocate 74 attorneys and 49 members of staff from its current location at 65 E. State St. to its new office in June 2017.

Representatives with CBRE handled negotiations on behalf of BakerHostetler. By Andrew Boyd


Bristol-Myers Squibb Expands Into Entire 255,000-SF Redwood City Campus

Bristol-Myers Squibb (NYSE: BMY) expanded into the last remaining building within the Woodside Technology Park in Redwood City, CA and is now the sole occupant of the 255,253-square-foot Bay Area life science campus.

The New York City-based global pharmaceutical company signed a lease with owner BioMed Realty to fully occupy Building 2, a 61,542-square-foot property located at 720 Bay Rd. that will be used as a research facility.

BioMed Realty acquired the three-building campus in 2013 at a time when Bristol-Myers Squibb fully occupied the 132,726-square-foot Building 1 property at 700 Bay Rd. Bristol-Myers Squibb would go on to sign a 10-year lease for the 60,985-square-foot Building 3 property at 740 Bay Rd. in 2014.

Bristol-Myers Squibb’s leases for all three buildings are scheduled to run through March 2027. By Bryce Meyers


Confluence Leases 40,000 SF at Nova Place

Confluence has signed a lease for 40,000 square feet in the Nova Place office building at 100 S. Commons in Pittsburgh, PA.

The tenant, a global leader in data-driven solutions for efficiency and control for data management and automation challenges in the asset management industry, will take occupancy of its two floors in the building in 2017.

The three-story, 804,268-square-foot office building was built in 1968 on 11 acres in the Greater Downtown submarket of Allegheny County. It was renovated in 2002, and today is 75 percent leased to new and long-standing tenants including Innovation Works, La Prima, Matrix Solutions, PNC, Bank of America, Expedient, and co-working space Alloy 26.

Jeremy Kronman and Andrew Miller with CBRE represented the landlord. By Justin Sumner


RuMe Shifting Centennial HQ to South Quentin Street

RuMe will more than double its headquarters space in Centennial, CO after agreeing to a seven-year lease with Environmental Development for 28,000 square feet within the Centennial Airport Center at 6981 S. Quentin St., Suite D.

The environmentally-conscious accessories retailer will relocate its corporate offices from 12,500 square feet at 7042 S. Revere Pky. with plans to take occupancy at its new location this June.

Also known as Centennial Business Park II, 6981 S. Quentin is a 77,400-square-foot flex facility constructed in 2001 by Panattoni Development on six acres in the Centennial Industrial submarket.

Todd Witty and Doug Viseur of CBRE handle leasing at the property. By Bryce Meyers

Article source: http://www.costar.com/News/Article/Office-Lease-Up-April-25-Nuclear-Regulatory-Commission-Renews-Full-Building-Lease-in-White-Flint-North/181637?ref=/News/Article/Office-Lease-Up-April-25-Nuclear-Regulatory-Commission-Renews-Full-Building-Lease-in-White-Flint-North/181637&src=rss

Manhattan’s Auto Row Is Attracting Office Developers

A $100 million project on Manhattan’s Auto Row that has billionaire William Ackman as an investor shows how a stretch on the far West Side is turning the corner from industrial hinterland to office magnet.

Mr. Ackman is a partner with the developer Georgetown Co. and investment firm Main Street Advisors Inc. in the redevelopment of 787 11th Ave., an eight-story building between West 54th and West 55th streets that houses Jaguar Land…

Article source: http://www.wsj.com/articles/manhattans-auto-row-is-attracting-office-developers-1461541521?mod=residential_real_estate

MBS RECAP: Bonds/Stocks/Oil Cheer Fed’s Friendly Stance

  • Very very simple day
  • markets were anxious that Fed might hint at June hike
  • Fed did NOT hint at June hike
  • Markets were happy
  • The end

I will now set about the task of stretching the bullet points above into enough prose that those of you who like reading will have something to do for the next few minutes.  Otherwise, you’ve already seen the thesis.  

Markets were more anxious than the Fed announcement ended up justifying.  It’s that simple.  It’s hard to forget just how flagrantly the Fed alluded to the December rate hike with the October verbiage changes.  It wasn’t unfair to wonder if they’d pull a similar stunt this time around.  After all, they say they’re on pace for 2 rate hikes in 2016, and they’re running out of ‘on-cycle’ meetings to facilitate that (only June, September, and December remain).

The announcement itself contained no such hints, but it threw a few curveballs at first.  The Fed removed some verbiage regarding the level of risk surrounding global financial markets.  Even though they kept the part about “continuing to monitor” global financial developments, some saw this as a sign that their previous barrier to hiking had now been lowered.

Why not just hike today then?  That’s a fair question and the Announcement never really answered it, except perhaps in saying that the economy and inflation had cooled off a bit in their opening paragraph.  That leaves us to conclude that the Fed is just a bit more dovish than the average market participant thought.  Dovish Fed = cheaper money = good for all the asset classes we typically follow.  As such, stocks, bonds, and oil all improved after the announcement.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/606390.aspx

Russian Property Mogul Sets His Sights on Miami

Russian property mogul Vladislav Doronin flew to Milan earlier this year to wrap up his deal with Italian fashion house Missoni. The company, he believed, was partnering with him on one of his first U.S. developments.

But once he arrived, Mr. Doronin realized he had been mistaken. Missoni family members bluntly told him they made no commitment. What’s more, he had only a couple of hours to convince them to join him on his $350…

Article source: http://www.wsj.com/articles/russian-developer-sets-his-sights-on-miami-1461674293?mod=residential_real_estate

Partee at Colliers as Retail Services Group Expands

Jawara Partee, retail tenant representation director, retail services group, Colliers International
Jawara Partee, retail tenant representation director, retail services group, Colliers InternationalJawara Partee has joined Colliers International as the retail tenant representation director with the firm’s retail services group.

In this newly-created position based in Los Angeles, Partee will focus on advising retailers on multi-market domestic expansion strategies in addition to assisting new business development initiatives for Colliers’ national retail platform.

Partee brings more than 13 years of strategic retailer roll-out expertise including brokerage and development experience. He most recently served as manager of construction, national strategic real estate with Domino’s Pizza, a Colliers client, where he planned and executed the system-wide domestic new stores and store relocations of over 300 sites. Before that he was a vice president of real estate with Gold Star Real Estate Investments, the director of development for Quiznos, and a real estate manager for Verizon Wireless.

Partee holds a Master’s Degree in real estate development and construction management from the University of Denver’s Daniels College of Business and earned his bachelor’s degree in international affairs from the University of Colorado at Boulder.

Article source: http://www.costar.com/News/Article/Partee-at-Colliers-as-Retail-Services-Group-Expands/181735?ref=/News/Article/Partee-at-Colliers-as-Retail-Services-Group-Expands/181735&src=rss

Alphabet Harbors Plan to Build ‘Smart’ Cities

Google parent Alphabet Inc. has legions of Web developers. Soon it might be in need of real-estate developers.

In coming weeks, top executives at the Mountain View, Calif., technology giant are set to weigh a pitch from Alphabet’s urban technology-focused subsidiary, Sidewalk Labs, on a plan to delve into an ambitious new arena: city…

Article source: http://www.wsj.com/articles/alphabets-next-big-thing-building-a-smart-city-1461688156?mod=residential_real_estate