Thursday, November 11, 2010
The Brickyard Apartments, Evansville, IN
Chris Stuard and Steve Martin at Sperry Van Ness/Martin Commerical Group have recently been retained to faciliate the disposition of The Brickyard Apartmetns in Evansville, IN. This Class A community is 178 units located on the west side, which is the strongest sub-market in Evansville. The offering can be viewed via the web at http://sale.svn.com/thebrickyard . For more information, please contact Chris Stuard at 812.471.2500 or via email at chris.stuard@svn.com .
Just Leased - Former Blimpie's Space
Sperry Van Ness/Martin Commercial has just leased the former Blimpie's space in the VPS Building located at 6th and Main in Evansville, IN. The space is directly across from the main gate of the new downtown arena, which will be completed in 2011. The new tenant plans to operate a upscale sushi bar.
Friday, October 1, 2010
FOR SALE: Royal Oaks Golf Club, Grafton (Cleveland), OH
Royal Oaks Golf Club is an 18-hole parkland style track. The site totals 96.97 acres and is a triangular tract. The course was designed by the father and son team of Max Jalowiec, Sr. and Jr. There are three sets of tees and the course plays from 4,439 to 5,729 yards. The fairways are tree-lined with greens that vary in size and contour. Eight holes have water hazards in the form of several lakes. There is a putting green, and cart and club rental is available. There is a 1,600 square foot club house built in 1998.
The club house offers a bar and food for patrons. There is also a 768 square foot pavilion with picnic tables. See marketing package for complete details and financials are available upon request.
Royal Oaks is located in Grafton’s west side just east of Grafton Road on Parsons Road. Parsons Road connects to Main Street, which directly accesses State Route 57, then the Ohio Turnpike, Route 2 or Route 10 (I-480) to the east.
PRICE: $1,200,000
Marketing Webiste
Contact:
Christopher M. Stuard
Sperry Van Ness/ Martin Commercial Group
4004 E. Morgan Avenue
Evansville, IN 47715
(812) 471-2500
chris.stuard@svn.com
Victor S. Voinovich, Sr.
Sperry Van Ness / First Place Commercial Realty, LLC
12150 Lyndway Drive, Suite 100
Cleveland, OH 44125
(888) 236-1435
voinovichv@svn.com
The club house offers a bar and food for patrons. There is also a 768 square foot pavilion with picnic tables. See marketing package for complete details and financials are available upon request.
Royal Oaks is located in Grafton’s west side just east of Grafton Road on Parsons Road. Parsons Road connects to Main Street, which directly accesses State Route 57, then the Ohio Turnpike, Route 2 or Route 10 (I-480) to the east.
PRICE: $1,200,000
Marketing Webiste
Contact:
Christopher M. Stuard
Sperry Van Ness/ Martin Commercial Group
4004 E. Morgan Avenue
Evansville, IN 47715
(812) 471-2500
chris.stuard@svn.com
Victor S. Voinovich, Sr.
Sperry Van Ness / First Place Commercial Realty, LLC
12150 Lyndway Drive, Suite 100
Cleveland, OH 44125
(888) 236-1435
voinovichv@svn.com
Operators Cheered By Latest Seniors Housing Data
Although the U.S. economy is still sputtering and the capital markets remain skittish, the worst is probably over for the seniors housing industry, according to several new reportsAlthough the U.S. economy is still sputtering and the capital markets remain skittish, the worst is probably over for the seniors housing industry, according to several new reportsAlthough the U.S. economy is still sputtering and the capital markets remain skittish, the worst is probably over for the seniors housing industry, according to several new reports.
“For seniors housing operators, there’s a sense that they’ve come through some very tough economic conditions,” noted Robert Kramer, president of the National Investment Center for the Seniors Housing & Care Industry (NIC), speaking at the group’s 20th annual conference held in Chicago last week. “Operators are cautiously optimistic.”
Several industry reports released at the conference point to some positive trends, including new data showing the seniors housing industry weathers downturns better than other types of commercial real estate.
As of the fourth quarter of 2009, the seniors housing sector generated a cumulative return of 2.7 times its mid-2003 value, according to the National Council of Real Estate Investment Fiduciaries (NCREIF).
By comparison the entire NCREIF Property Index, which includes all types of commercial properties, posted a cumulative gain of 1.5 times its mid-2003 value.
Separately, new construction of seniors housing properties has declined dramatically, according to the “Construction Trends Report for 2010,” prepared by the American Seniors Housing Association (ASHA) and NIC.
The report tallies only 129 new seniors housing project starts in the last year, along with expansions of 58 existing projects. “This is a very modest level of construction,” notes David Schless, president of ASHA. Today’s construction level is 32% less than the previous year, and down 57% from two years ago.
The Dallas area has the most construction activity, with 2,332 units under way. New York has 2,018 units under construction. San Francisco and Chicago have the next highest levels of construction, with 1,186 units and 1,692 units respectively.
The construction of continuing care retirement communities (CCRCs) also has slowed, mostly due to the difficulty of financing these projects which feature several different types of housing and care on one campus.
CCRCs are often financed with tax-exempt bonds, which have been less available since the downturn. A year ago, CCRCs represented 22% of all new seniors housing units under way. Now CCRCs comprise 13% of the total number of units under construction.
Consumer demand jumps
Occupancies at seniors housing facilities —including assisted and independent living — have stabilized. Among the top 31 markets tracked by NIC, the occupancy rate peaked in early 2007 at 92%. But by the first quarter of 2010, the occupancy rate had dipped to 87.6%, a decline of 440 basis points.
In the second quarter of 2010, the occupancy rate in those top 31 markets ticked up slightly to 87.7%. “We’re bumping along the bottom,” says Michael Hargrave, vice president at NIC.
Demand for units rebounded quickly last year. Defined as the change in the number of occupied units, demand had been growing at an annual rate of 1.6% prior to the recession. Demand was flat during the downturn, but it is currently growing again at an annual rate of 1.7%. “A demand-led recovery is what the sector needs,” says Hargrave.
Despite the V-shaped recovery in demand, the outlook for occupancies remains clouded because new units are being added to the market. In the second half of the year, 4,360 units are slated to open, well above the 2,287 units absorbed in the first half of the year.
Absorption did outpace new supply in the second quarter, however. For the sector to hit its all-time occupancy peak of 92% by the end of 2011, absorption would have to average about 5,000 units a quarter. The highest quarterly absorption was 3,759 units in the last quarter of 2005.
Other headwinds include the continued weak housing market and high levels of unemployment. “The recovery of occupancy will be slow and gradual,” notes Hargrave.
Asking rents have remained positive, however, according to NIC. Rents were growing at a rate of about 4% annually in 2007. The decline in occupancies has slowed rent growth to its current level of 0.7% annually.
NIC’s Hargrave is quick to point out that asking rents in seniors housing are still positive in contrast to other commercial real estate sectors, which have experienced a drop in rents during the downturn.
New resource
At the conference, NIC also introduced the executive summary of the “NIC Investment Guide 2010: Investing in Seniors Housing & Care Properties.” The report, which will be available in its entirety in late October, pulls together the latest research from various sources and evaluates the risks and opportunities for investors in the sector.
NIC’s Investment Guide includes a seniors housing index developed in conjunction with NCREIF, which compares performance among the various property sectors. “This is a benchmark moment for the seniors housing industry,” notes Kramer, who emphasizes how far the industry has come in a short time. “We have the data and it speaks for itself.”
Seniors housing has outperformed other commercial real estate sectors during the downturn because those who move into a seniors facility usually require some services. In other words, they can’t always put off a move, according to NIC’s Kramer. “Seniors housing has been resilient.”
Sep 30, 2010 10:56 AM, By Jane Adler, NREI Contributing Writer
Apartment: Core/Value-Add Debt & Equity Capital Flows
Equity Capital
While public apartment REITs heavily favor core properties, they have also been buyers of value-add assets, including development sites, particularly in markets they deem strategic. The public apartment REITs are more defined by geography, and the largest companies have been targeting major markets and exiting secondary and tertiary markets. This focus is not likely to change in the current market environment. However, private REITs and institutional investors targeting yield are more likely to migrate beyond the major markets into secondary and possibly tertiary markets.
In the value-add space for apartment investment, private entrepreneurial owners and operators account for the largest share of acquisitions. Institutional investors and opportunistic equity funds are also more active buyers of value-add apartments. Interestingly, cross-border investors are also responsible for a larger share of value-add than of core activity, but the origin of this capital is quite different. Instead of the major foreign institutions and sovereign wealth funds that are investing in core properties, it is largely foreign-based private investors, particularly from Canada and Israel, that have been active buyers of value-add apartment properties.
Debt Capital
Debt capital for apartments is much more segmented along the core/value-add divide. Most notably, the government agencies remain the largest multi-family lender for core properties, but provide relatively little financing for value-add transactions. The agencies provided debt for 56% of the core apartment acquisitions that have received financing so far this year. However, Fannie and Freddie’s share of the core lending market is down from a year ago, as insurance companies and regional and community banks have started to offer competitive terms.
Data subject to future revision; based on properties & portfolios $5 mil and greater.
©2010 Real Capital Analytics Inc. All rights reserved.
While public apartment REITs heavily favor core properties, they have also been buyers of value-add assets, including development sites, particularly in markets they deem strategic. The public apartment REITs are more defined by geography, and the largest companies have been targeting major markets and exiting secondary and tertiary markets. This focus is not likely to change in the current market environment. However, private REITs and institutional investors targeting yield are more likely to migrate beyond the major markets into secondary and possibly tertiary markets.
In the value-add space for apartment investment, private entrepreneurial owners and operators account for the largest share of acquisitions. Institutional investors and opportunistic equity funds are also more active buyers of value-add apartments. Interestingly, cross-border investors are also responsible for a larger share of value-add than of core activity, but the origin of this capital is quite different. Instead of the major foreign institutions and sovereign wealth funds that are investing in core properties, it is largely foreign-based private investors, particularly from Canada and Israel, that have been active buyers of value-add apartment properties.
Debt Capital
Debt capital for apartments is much more segmented along the core/value-add divide. Most notably, the government agencies remain the largest multi-family lender for core properties, but provide relatively little financing for value-add transactions. The agencies provided debt for 56% of the core apartment acquisitions that have received financing so far this year. However, Fannie and Freddie’s share of the core lending market is down from a year ago, as insurance companies and regional and community banks have started to offer competitive terms.
Data subject to future revision; based on properties & portfolios $5 mil and greater.
©2010 Real Capital Analytics Inc. All rights reserved.
Monday, September 27, 2010
Wherefore Art Thou, Distress?
By now, most commercial real estate pros are thinking the same thing – whatever happened to that 100-foot high wall of water (aka tsunami) that was to wash through the industry and cleanse the bad properties from the system? For pennies on the dollar?
Now “keep on waiting/lurking” seems to be the prevailing view. According to New York-based researcher Real Capital Analytics, the default rate for commercial real estate mortgages held by the nation’s FDIC-insured depository institutions did increase by 9 basis points to 4.28% in the second quarter, up from 4.19% in the first quarter.
For those of you keeping score on a historical scorecard, at its cyclical low in the first half of 2006, the commercial mortgage default rate was 0.58%. A mere pittance.
Year-over-year, the tale is more striking, with the commercial default rate up by 139 basis points.
However, rather than gaining speed, the negative trendline appears to be slowing. Year-over-year increases had been accelerating for thirteen consecutive quarters through the end of 2009, but have moderated more recently.
Consistent with the slower increase in the default rate, the dollar volume of commercial mortgages in default measured its smallest increase since the second quarter of 2007, three years ago. Now some $46.2 billion of bank-held commercial mortgages are in default, up by just $547 million from the first quarter of 2010.
Apartments March Ahead
The nation’s apartment sector appears to be recovering faster than other segments, in a sort of “first in, first out” play on the recession.
In the second quarter, the multifamily mortgage default rate declined by 47 basis points, from 4.63% to 4.16%, falling below the commercial default rate for the first time in two years.
The default rate for multifamily mortgages surpassed the rate on commercial mortgages in the second quarter of 2008, and remained marginally higher during the following nine quarters.
“The second quarter drop was the first meaningful decline in the multifamily default rate this cycle,” notes the RCA analysis. The volume of multifamily mortgages in default fell by $1.0 billion from the first quarter, to $8.9 billion.
Reflecting differences in loan quality across lender groups, the default rate for bank-held multifamily mortgages is still significantly higher than for multifamily mortgages at Fannie Mae and Freddie Mac. In spite of the challenges in their single-family lending portfolios, the GSEs’ multifamily portfolios continue to perform. The serious delinquency rate for Fannie Mae’s multifamily loans is 0.8% as of June 30, up from 0.5% one year earlier, but much lower than for the market as a whole.
Banking on Defaults
The largest class of banks – those with $10 billion or more in assets – accounted for 48.6% of all bank-held commercial mortgages and had the highest default rate, at 4.98%, according to RCA’s analysis. But the combined multifamily and commercial real estate concentration at these institutions (CRE loans as a percent of all loans) was the lowest of all the bank peer groups, at 12.1%.
To read more, please click this link.
Sep 15, 2010 10:22 AM, By Ben Johnson, NREI Contributor
Now “keep on waiting/lurking” seems to be the prevailing view. According to New York-based researcher Real Capital Analytics, the default rate for commercial real estate mortgages held by the nation’s FDIC-insured depository institutions did increase by 9 basis points to 4.28% in the second quarter, up from 4.19% in the first quarter.
For those of you keeping score on a historical scorecard, at its cyclical low in the first half of 2006, the commercial mortgage default rate was 0.58%. A mere pittance.
Year-over-year, the tale is more striking, with the commercial default rate up by 139 basis points.
However, rather than gaining speed, the negative trendline appears to be slowing. Year-over-year increases had been accelerating for thirteen consecutive quarters through the end of 2009, but have moderated more recently.
Consistent with the slower increase in the default rate, the dollar volume of commercial mortgages in default measured its smallest increase since the second quarter of 2007, three years ago. Now some $46.2 billion of bank-held commercial mortgages are in default, up by just $547 million from the first quarter of 2010.
Apartments March Ahead
The nation’s apartment sector appears to be recovering faster than other segments, in a sort of “first in, first out” play on the recession.
In the second quarter, the multifamily mortgage default rate declined by 47 basis points, from 4.63% to 4.16%, falling below the commercial default rate for the first time in two years.
The default rate for multifamily mortgages surpassed the rate on commercial mortgages in the second quarter of 2008, and remained marginally higher during the following nine quarters.
“The second quarter drop was the first meaningful decline in the multifamily default rate this cycle,” notes the RCA analysis. The volume of multifamily mortgages in default fell by $1.0 billion from the first quarter, to $8.9 billion.
Reflecting differences in loan quality across lender groups, the default rate for bank-held multifamily mortgages is still significantly higher than for multifamily mortgages at Fannie Mae and Freddie Mac. In spite of the challenges in their single-family lending portfolios, the GSEs’ multifamily portfolios continue to perform. The serious delinquency rate for Fannie Mae’s multifamily loans is 0.8% as of June 30, up from 0.5% one year earlier, but much lower than for the market as a whole.
Banking on Defaults
The largest class of banks – those with $10 billion or more in assets – accounted for 48.6% of all bank-held commercial mortgages and had the highest default rate, at 4.98%, according to RCA’s analysis. But the combined multifamily and commercial real estate concentration at these institutions (CRE loans as a percent of all loans) was the lowest of all the bank peer groups, at 12.1%.
To read more, please click this link.
Sep 15, 2010 10:22 AM, By Ben Johnson, NREI Contributor
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