In 2021, supply chain issues, increased costs, wage inflation and the logistical challenges of completing projects compounded to negatively impact the affordable housing pipeline. According to Gregg Gerken, head of U.S. Commercial Real Estate with TD Bank, 2022 looks fantastic for the affordable housing sector as those issues are beginning to resolve. However, he notes that the affordable housing sector is still challenged by delays related to financing challenges, among other factors. Demand for affordable housing, federal level commitments to the sector and the continued involvement of Fannie Mae and Freddie Mac are all positive factors for the outlook of affordable housing. However, Gerken notes, “Financing is somewhat challenged by gaps in funding. With pricing and costs going up, there’s a gap between how much a project might support from a loan side versus how much in tax credits are allocated to that project during the last round of allocations. Some of that gap between overall costs and the funding sources is being made up as local agencies put in additional money in order to get affordable housing done.” Hear what Gerken has to say about the development of workforce and affordable housing and the involvement of government-sponsored …
By Phil Breidenbach, Senior Executive Vice President, Colliers Companies are coming back to the office in Phoenix. Businesses are envisioning the return of their workforce as many look for new space or reconfigure their existing facilities. Building owners feel the momentum. We have reason to be optimistic — the future of the office and how we use the workplace is exciting! Getting there, however, will be turbulent. Your patience may be tested. Colliers’ fourth-quarter office report shows vacancies stabilizing market wide, positive absorption occurring in key submarkets and rents increasing marginally. Positive fourth-quarter absorption was led by leasing in new Class A+ buildings like 100 S. Mill. This Hines/Cousins project is 80 percent leased by institutional, “household name” tenants at record rents several months prior to completion. Vacancy rates may, however, continue to fluctuate as certain downsizing continues. Some institutional users are adopting work from home for much of their workforce, convinced this strategy will help with employee retention and cost reduction without impacting productivity — assumptions yet to be proven. This strategy has corporate America subleasing space, allowing leases to expire and vacating spaces, which is stagnating recovery. ‘Short Term’ — The Renewal Mantra for 2022 We speak with office occupiers regularly about back-to-work strategies. …
NEW YORK CITY AND MCLEAN, VA. — Ares Management Corp. (NYSE: ARES) has acquired Capital Automotive LLC, a McLean-based firm that specializes in the sale-leaseback of car dealerships under new triple-net leases. Ares purchased the company through its alternative credit strategy division and real estate group for $3.8 billion. The seller was a private real estate fund managed by Brookfield Asset Management (NYSE: BAM). Capital Automotive owns more than 250 real estate assets in the United States and Canada that are structured under long-term, triple-net leases to various car dealers. The names and locations of the properties were not disclosed. Ares purchased Capital to expand and diversify its net-lease investment strategy. Including the recent investment in Capital Automotive, Ares’ funds have invested in over 1,200 real estate assets totaling approximately $7.2 billion of gross asset value in North America and Europe over the past 15 months. These net lease investments include retail, industrial and office properties leased to tenants with varying credit profiles. Ares’ real estate group had approximately $41.2 billion of assets under management as of year-end 2021. Ares Management’s stock price closed on Thursday, Feb. 17 at $79.01 per share, up from $52.02 a year ago, a nearly …
OCEANSIDE, CALIF. — 29th Street Capital (29SC) has acquired Sunterra Apartments in Oceanside from Ideal Group for $97.5 million. Built in 1974, Sunterra features 240 apartments, a resort-style pool, two playgrounds, a sundeck with an outdoor fireplace and a fitness center. 29SC plans to implement a community improvement plan including installing stainless steel appliances, quartz countertops, oval soaking tubs and modern white cabinetry. Exterior improvement will include updating the roof, wrapping balconies in wood paneling and replacing windows and glass doors. Haven Residential, 29SC’s in-house property management company, will oversee management and leasing. Hunter Combs of Walker & Dunlop’s San Diego office brokered the off-market transaction. John Montakab and Mark Grace of Walker & Dunlop arranged the financing.
BEAVERTON, ORE. — Greystone has provided a $97.2 million HUD 223(f) loan to refinance Deveraux Glen Apartments in Beaverton. Melvin Mark Capital Group brought the opportunity to Greystone for the borrower, Peterkort Residential I. Constructed in 2007, Deveraux Glen Apartments features 34 detached and semi-detached townhouse walk-up buildings consisting of one-, two-, three- and four-bedroom units. The fixed-rate loan carries a 35-year term and amortization, with a 65 percent loan-to-value ratio. Additionally, the property qualifies for a 25-basis-point reduction in mortgage insurance premium for achieving green standards.
GOODYEAR, ARIZ. — Sigma Contracting is scheduled to break ground in March on a $14 million, 100,000-square-foot warehouse, manufacturing and retail space in Goodyear for Potato Barn, a family-owned furniture store. Situated on eight acres at the southwest corner of West McDowell Road and Pebble Creek Parkway, the ground-up building will feature eight loading docks, 25,000 square feet of warehouse space, 20,000 square feet of manufacturing space and more than 54,000 square feet of retail/showroom space with administrative offices in the mezzanine area. Completion is slated for late fourth-quarter 2022. The project team includes R&M Concrete, State Electric and Alstate Steel.
GLENDALE, ARIZ. — Cleveland, Ohio-based Woodside Health has purchased Il Palazzo at Arrowhead Ranch, a 44,680-square-foot mixed-use retail and medical office property in Glendale. An undisclosed seller sold the property for $12.5 million. Consisting of five one- and two-story buildings, the asset was 96 percent leased at the time of sale. Approximately one-third of its occupancy comprises retail and restaurant tenants, including a national bank branch, and the remaining space is occupied by medical, wellness and professional office tenants. Alexandra Loye, Steve Lindley, Eric Wichterman and Mike Coover of Cushman & Wakefield’s capital markets and private capital teams in Phoenix negotiated the sale.
RANCHO CUCAMONGA, CALIF. — Progressive Real Estate Partners and Newmark have arranged the sale of a single-tenant retail building located at 8700 Baseline Road in Rancho Cucamonga. A private, Northern California-based investor acquired the property from WM Capital for $6.1 million. Brad Umansky of Progressive Real Estate Partners and Glenn Rudy of Newmark represented the seller in the transaction. Bank of America has occupied the 9,195-square-foot drive-thru property since 1976. The building is located within Country Village shopping center.
Greystone Provides $49M Acquisition Loan for Life at Westpark Affordable Housing Property in Houston
HOUSTON — Greystone has provided a $49 million HUD-insured acquisition loan for The Life at Westpark, a 312-unit affordable housing community in Houston. Built in 1994, The Life at Westpark comprises two-, three- and four-bedroom units that are reserved for residents earning 60 percent or less of the area median income (AMI). Amenities include two pools, a playground and a basketball court. Shana Daby of Greystone originated the nonrecourse financing, which was structured with a fixed interest rate and a 35-year amortization schedule, on behalf of the borrower, New York City-based private equity firm Olive Tree Holdings. The new ownership plans to invest $25,000 per unit, or roughly $7.8 million, in capital improvements to preserve the property’s affordability status, which expires in 2025.
GEORGETOWN, TEXAS — Multifamily developer Wood Partners has broken ground on Alta Berry Creek, a 300-unit apartment community within the 314-acre Berry Creek Highlands master-planned community in Georgetown, located north of Austin. Units will come in one-, two- and three-bedroom formats and will be furnished with stainless steel appliances, tile backsplashes and full-size washers and dryers. Communal amenities will include a pool, outdoor kitchen, pet park, fitness center, business center and a resident lounge. Preleasing will begin in the fourth quarter, with the opening scheduled for January 2023. Upon completion, Berry Creek Highlands will consist of 1,500 single-family homes, retail and restaurant space, an elementary school and a 20-acre park.