- Why Commercial Real Estate Loans Are Not Like Wine “There may be benefits to waiting around for fruit, wine and teens, but waiting for a loan to reach its maturity date without examining whether it might be open to early refinancing doesn’t make the loan better – it makes the lending opportunity more likely to pass by those lenders who wait too long. True, CMBS loans are not readily available for early refi. But most commercial mortgages are balance-sheet loans and can be refinanced well before they come due. The smart move, then, is to recognize that even loans issued in the past year or two could be ripe for refinancing, and to pursue refinancing opportunities for this much larger pool of loans. By waiting until maturity, prospective lenders are missing the boat on new opportunities…Let’s take an in-depth look at properties in the New York and Chicago areas that have been refinanced within two or three years of issuance, long before the loans matured – what we call 'rapid refi' – and examine what kinds of refinancing opportunities are out there. The financing behind these properties demonstrates that, although relationships between borrowers and lenders can be important in real estate finance, there is plenty of room for other lenders to break up the party.” (Forbes)
- As banks are hamstrung by regulation, developers turn to alternative lenders “Banks, faced with new regulations aimed at reining in risk, are pulling back from providing construction loans, so alternative lenders are stepping in to fill some of the gaps. Alternative lenders, including private equity funds and mortgage real estate investment trusts, originated 68 percent more loans in 2015 than in 2014, according to the Mortgage Bankers Association. Banks are grappling with the High Volatility Commercial Real Estate (HVCRE) rule, which was implemented as part of Basel III reforms in January 2015. Under the rule, banks must retain 150 percent of risk weight on a loan, which effectively prevents banks from being as aggressive in lending, according to the Commercial Observer. One particularly sore spot for developers: The new regulations don’t allow borrowers to use the appreciated value of land toward the 15 percent in cash equity required before banks can provide funds.” (The Real Deal)
- Major convenience store/gas station buyer emerges “Durham, North Carolina-based conglomerate The Guess Corp. is seeking to acquire at least 1,000 U.S. convenience store/ gas station units in the next 12 months. Working through a subsidiary, the company is looking to acquire an average of 100 branded and unbranded units per month. Upon completion of the purchases, Guess Corp. intends to re-brand and renovate the properties with innovative and sleek designs and provide enhanced CRM technology. The company has invited brokers to provide buyer representation with higher commissions. A minimum of five units in an area are required in order for the company to consider a purchase. In most instances, Guess Corp, says it will pay full asking price for the units as a package with payouts over a 30-day period, with close of transaction within in 72 hours. Units with or without real estate as part of the acquisition are being considered.” (Chain Store Age)
- 'Pokémon Go' to Feature Retailer-Sponsored Locations “Niantic Labs, the developer behind the hit augmented reality game Pokémon Go, today hinted to the Financial Times that it plans to allow retailers and other companies to introduce sponsored locations in the future as a way to monetize the app. Real world locations in Pokémon Go serve as "Pokéstops" for collecting in-game items and power-ups including "Pokéballs" or as "gyms" for battling the pokémon of other players. Right now, Pokéstops and gyms are largely located at notable landmarks like parks and statues, but may expand to encompass retailer-sponsored locations.” (Mac Rumors)
- A Boomlet in Lending Boosts J.P. Morgan “Americans are borrowing again, and that solves one of the most persistent problems faced by U.S. banks in recent years. If only interest rates would rise, banks could become popular with investors again. J.P. Morgan Chase beat expectations for its second-quarter earnings despite headwinds including record-low interest rates, tepid global growth and the Brexit shock. Those expectations were pretty low, and earnings were actually down slightly from a year earlier. Revenue did unexpectedly tick up. Robust loan growth was the key factor in the results this quarter. J.P. Morgan’s loan book rose 10% from a year earlier. That is a big jump for an $859 billion loan book, and it is even stronger than nationwide loan growth of around 7%, which is already above historic averages. Lending was strong almost across the board, with commercial and industrial loans up 9%, commercial real-estate loans up 18% and consumer loans up 11%. J.P. Morgan’s lending boost will likely have a cost. More credit-card lending has gone to less creditworthy borrowers, and the bank boosted its reserves for bad loans. But outside of oil, write-offs are still at low levels relative to history.” (Wall Street Journal)
- Catering to the Renters of Tomorrow “‘We didn’t used to cater to a particular age group, but millennials are very demanding. They’re very social creatures,’ says Scott Ziegler, AIA, principal in charge of Living Place Studio at Ziegler Cooper Architects, in Houston. ‘If a developer is really shrewd and smart, they’re looking for a geographic location that’s in a social hub of these people’s lives.’ The next generation of apartments will see a furthering of resort-style amenities that encourage a sense of community. Just as a barista bar is an ideal early-morning gathering place for residents, tomorrow’s standard amenity package will likewise be aimed at fostering interaction. ‘Sports lounges, music jam rooms, experimental kitchens, swim-up bars and soaking ledges are just some of the ideas we’re pursuing,’ says Ziegler. ‘Millennials will pay more in rent to have the amenity package or will downsize their unit size [to studio or micro] to be able to afford the amenities.’ According to Ziegler, this trend demands more common-area square footage: For instance, as online shopping continues to grow, even more square footage will be needed for package rooms. But it certainly doesn’t end with parcels.” (Multifamily Executive)
- U-Haul Transforms Abandoned Property into Self-Storage Facility “U-Haul Moving & Storage is transforming a former Kmart Super Center unit into a full-service moving and self-storage facility. The 15.23-acre property at 19990 Telegraph Road was vacant for three years before the Phoenix-based company acquired it and opened a temporary showroom here on April 1st. The new 143,000-square-foot store will expand U-Haul’s offer to Detroiters (currently 36 outdoor drive-up units and self-storage) with an additional 526 indoor heated units, 665 indoor climate-controlled units and a propane-dispensing pump. The new facility is scheduled to be completed in 2017 and will provide truck and trailer rentals, self-storage, moving supplies and boxes, U-Box portable moving and self-storage containers, towing equipment, professional hitch installation and more. The redevelopment is part of U-Haul’s Sustainability Initiatives, a movement aimed at supporting infill developments and helping local communities lower their carbon footprint and reduce their inventory of unused buildings.” (Commercial Property Executive)
- Yardi Matrix: Music City’s Diverse Economy “Driven by a diversified economy led by its iconic entertainment industry and a first-rate healthcare sector, the Nashville/Knoxville metro is becoming one of the nation’s most attractive secondary markets for developers and investors, even if rent growth is in the middle of the pack nationally. Nashville’s population growth, healthy employment sector and cost-friendly business climate are driving corporate expansions and relocations in industries such as auto manufacturing. An economic pillar for the market, the entertainment industry contributes nearly $10 billion a year to the local economy, while the healthcare sector’s economic impact has reached $38.8 billion. The metro is also developing into an up-and-coming locale for entrepreneurial ventures: Investors poured more than $280 million into startup businesses last year, with a total of $1 billion statewide since 2012. The outlook for multifamily fundamentals is favorable, as strong demand will help fill the 3,300 units completed in 2015, though the 13,400 units currently under construction will put a damper on rent increases once they hit the market.” (MultiHousing News)
- De Blasio’s under-fire fundraising group contributed to affordable housing initiative “Mayor Bill de Blasio tapped union allies and his under-fire fundraising entity, Campaign for One New York, to push through the administration’s affordable housing plan in the City Council, according to filings that will be provided to the state. Campaign for One New York — which de Blasio set up in 2014 but that’s now under investigation for questionable fundraising practices — contributed $150,000 to United for Affordable NYC, which has raised $390,000 since it was set up in February, Politico reported. The mayor shut down Campaign for One New York earlier this year, saying its mission was over. According to Politico, United for Affordable NYC’s other donors were unions with close ties to City Hall, including the United Federation of Teachers ($125,000), the municipal union District Council 37 ($30,000) and health care workers’ union 1199 SEIU ($25,000).” (The Real Deal)
- Anti-development Measure ‘LUVE’ Officially Lands on Santa Monica’s November Ballot “A stringent measure to choke off high-rise development in booming Santa Monica will be decided by voters. The Santa Monica City Council voted unanimously Tuesday night to place an initiative titled the "Land Use Voter Empowerment," or LUVE, on the November ballot. LUVE would subject new construction taller than 32 feet or two stories to voter approval. That includes such projects as the Plaza at Santa Monica, a big mixed-user proposed for downtown at Arizona Avenue between 4th and 5th streets that could soar to 148 feet. The council pretty much had no other choice—the local group backing the measure had already collected enough signatures to qualify for the ballot. The council’s only other option was to skip bringing the initiative to voters in November by straight up enacting it as law. But none were willing to do that. As the Santa Monica Lookout points out, even the two council members considered ‘slow-growth’ proponents, Tony Vazquez and Sue Himmelrich, don’t support LUVE: ‘Thirty-two feet is just too drastic,’ said Vazquez.” (Los Angeles Curbed)
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