Top Stories

NMHC 2016 Conference: Student Housing Remains Robust, Transaction Volume and Investor Interest High

by Katie Sloan October 13, 2016

NEW ORLEANS — The 14th annual National Multifamily Housing Council (NMHC) Student Housing Conference & Exposition was held Sept. 28-30 at the New Orleans Marriott in Louisiana, with over 700 leaders from all facets of the sector convening to network, discuss and dine over a range of industry topics. The outlook throughout the conference was overwhelmingly bright. Each panel and session showed the sector to be robust, with reports of rising rental rates, a record year in asset sales in the sector, and increasing investor interest and capital entering the student housing market. The conference began on Wednesday, Sept. 28, with opening remarks by NMHC president Doug Bibby, followed by a panel titled “Keeping Count: The Public Company Perspective.” Led by CEO of Peak Campus Bob Clark, the panel went in-depth with the CEOs of the two public REITs in the industry — Bill Bayless, president and CEO of American Campus Communities (ACC), and Randy Churchey, chairman and CEO of Education Realty Trust (EdR). Clark began the panel with a variety of statistics on the sector today, as reported by Axiometrics. New supply deliveries for the last five years have been 61,000-beds in 2013; 62,000-beds in 2014; 47,000-beds in 2015; 48,000-beds in 2016; and 36,000 …

October 13, 2016

Loans New York Northeast Office Top Stories

Paramount Completes $850M Refinancing of 1.8 MSF Office Building in Manhattan

by Jeff Shaw October 12, 2016

NEW YORK CITY — Paramount Group Inc. (NYSE: PGRE) has received an $850 million refinancing for 1301 Avenue of the Americas, a 1.8 million-square-foot trophy office building located between 52nd and 53rd streets in Midtown Manhattan. The 45-story office tower includes 30,000 square feet of ground-floor and concourse-level retail space. The property also features in-building access to Rockefeller Center and views of Central Park. Cushman & Wakefield arranged the five-year, interest-only loan, which matures in October 2021 and has two one-year extension options. The net proceeds from the financing were used to repay the company’s 2017 debt maturities at 900 Third Avenue in Manhattan and Waterview in Washington, D.C. Paramount plans to use the remaining proceeds to help fund the previously announced acquisition of One Front Street in San Francisco, which is expected to close by the end of the year. “By capitalizing on today’s attractive credit markets for our high-quality, Class A assets, we strengthen our balance sheet and fortify our position in the market,” says Albert Behler, chairman, CEO and president of Paramount. “Over the past 10 months, we have successfully financed over $2.35 billion of debt at attractive rates,” adds Wilbur Paes, chief financial officer of Paramount. …

October 12, 2016

California Multifamily Top Stories Western

Strata Equity Group Acquires 24-Property Multifamily Portfolio in Southeast for $720M

by Katie Sloan October 11, 2016

SAN DIEGO — Strata Equity Group has acquired a 24-property multifamily portfolio from an affiliate of New York City-based DRA Advisors LLC for $720 million. The Southeast Residential Portfolio consists of 6,294 units located throughout 13 metropolitan areas in Georgia, North Carolina, Tennessee and South Carolina. The properties were built between 1985 and 2000, with an average year built of 1996. Over the past three years, net rental income for the portfolio has increased 12.2 percent while averaging 95.3 percent occupancy. Malcom McComb of CBRE negotiated the transaction on behalf of the seller. Bill Chiles and Robert LaChapelle of CBRE also secured $500 million in acquisition financing for Strata. The financing features a mixture of seven- and 10-year fixed- and floating-rate loans provided by Freddie Mac. “We negotiated a portion of the portfolio under a newly created version of the Freddie Mac Revolving Credit Facility,” says Chiles. “This facility gives Strata Equity Group more financing flexibility for certain assets, as well as an attractive vehicle for new purchases with similar business plans.” The names of only three properties in the portfolio were disclosed: Alta Mills, 1650 Anderson Mill Road, Austell, Ga.; Eagle Pointe Apartments, 8608 Eagle Pointe Drive, Knoxville, Tenn.; …

October 11, 2016

Conference Coverage Features Multifamily Texas Texas & Oklahoma Feature Archive Top Stories

Highs, Lows of Texas Apartment Market Under Microscope at InterFace Conference

by Jeff Shaw October 11, 2016

DALLAS — The multifamily market in Texas has cooled off on the lending and development front, and even leasing activity isn’t as robust as it once was in some markets. That’s the consensus of panelists at Interface Multifamily Texas, which took place last Thursday, Oct. 6 at the InterContinental Dallas. The conference’s opening panel, “What’s the Big Picture for Multifamily Supply, Demand & Demographics?” featured three economists specializing in the Texas multifamily market, all of whom agreed the sector was slowing from the same time a year ago. “‘Noise’ is a great term to use, and in our company we are using ‘chop’ to describe the market,” said Ryan Davis, senior economist with Witten Advisors. “Apartments are steady, but the economy is slowing from the ramp-up.” That said, the Texas economy is generating plenty of new jobs, which is a positive sign for apartments in certain markets, added Davis. Dallas Metroplex Shines Among individual markets, all agreed that Dallas/Fort Worth displayed the strongest real estate fundamentals. With the area benefiting from some large corporate relocations, demand for apartments is rising. Rents have grown in the market 7.7 percent over the past 12 months, and there are more than 30,000 units …

October 11, 2016

Hospitality New York Northeast Top Stories

BH Properties Buys Three Hotel Leases in Manhattan for $338.2M

by Nellie Day October 10, 2016

NEW YORK — BH Properties has purchased a portfolio of three New York City hotel leases for $338.2 million. Lexington Realty Trust sold the leased fee positions, which give the owner rights to the rent revenue without actually owning the property, similar to a ground lease. The acquisition is BH Properties’ first transaction in Manhattan and the largest transaction in the firm’s history. The deal was structured as a reverse 1031 exchange. BH Properties restructured its balance sheet to acquire the assets. The firm plans to divest up to 25 properties throughout the country in the next six months. Acquiring the leased fee positions in New York provided the firm with an opportunity to dispose of some properties that are either outside its target market or are no longer a focus for its investment strategy, according to Steve Gozini, the firm’s president. Ascott Residence Trust owns the Element, a 411-room hotel on 311 W. 39th St., and the 369-room Sheraton Tribeca at 370 Canal St. Magna Hospitality owns the 399-room Doubletree Hotel at 8 Stone St. Magna also manages all three assets. The three hotels were built in 2010, opened in 2011 and stabilized in 2012. Magna was the original developer of …

October 10, 2016

Florida Multifamily Southeast Top Stories Washington Western

Avanath Capital Management Buys Workforce Housing in Florida, Seattle for $84.8M

by Jeff Shaw October 7, 2016

FORT LAUDERDALE, FLA. AND SEATTLE — Avanath Capital Management has acquired The Lodge at Peasley Canyon in Seattle and Harbour Pointe in Fort Lauderdale for a total of $84.8 million. Both properties are multifamily communities targeting middle-income families. The Lodge features 339 units while Harbour Pointe features 34 units. Oak Tree Residential was Avanath’s joint-venture partner on the Florida transaction. “Each of these assets presents an opportunity to leverage market growth while also preserving much-needed workforce housing in cities that have experienced some of the highest rent increases in the nation,” says John Williams, president and chief investment officer of Avanath. “Amidst this rent growth, there is a severe shortage of quality workforce housing that caters to middle-income families in major urban cores throughout the nation.” Built in 2004, The Lodge at Peasley Canyon’s amenities include a pool and spa, fitness center, modern kitchens with maple cabinetry and washers and dryers in most units. Avanath bought the property for $73.3 million and plans to enhance the clubhouse, lighting, kitchens and bathrooms. The seller was an institutional owner. Constructed in 1976 and renovated in 2006, Harbor Pointe is currently 100 percent occupied and features marble floors and boat slips. Avanath and …

October 7, 2016

Michigan Midwest Multifamily Seniors Housing Top Stories

Moceri to Develop $300M Seniors Housing Community in Southeast Michigan

by John Nelson October 6, 2016

STERLING HEIGHTS, MICH. — Moceri Cos., a homebuilder based in metro Detroit, plans to develop a $300 million, master-planned community for seniors in Sterling Heights. Situated adjacent to the 27-hole Maple Lane golf course, the 807-unit development, known as Verandas, will feature a mix of townhouses, condominiums and apartments targeting adults age 55 and above. “Verandas will exceed the expectations of the active adult lifestyle in the entire region,” said Dominic Moceri, vice president of Moceri Management Group. Verandas will include a 30,000-square-foot event center featuring dining, fitness, indoor and outdoor pools and spas, retail space and other venues accessible to the public, as well as private spaces for residents only. “We are thrilled to have the Verandas development coming to our city, as it represents Sterling Heights’ commitment to exploring innovative housing options to meet the desires of our community,” said Sterling Heights Mayor Michael Taylor. “This development allows our city to attract new residents, as well as provide a new housing opportunity for those currently living in Sterling Heights who no longer want to reside in a traditional single-family home.” Verandas will include the 160-unit Blossom Lane, featuring one- and two-bedroom independent and assisted living apartments and studio …

October 6, 2016

Features Multifamily Seniors Housing Top Stories

NIC: Seniors Housing Occupancy Remained Stable in Third Quarter While Asking Rents Increased

by Jeff Shaw October 6, 2016

ANNAPOLIS, Md. — The occupancy rate for seniors housing properties in the third quarter held steady, even as asking rents increased, according to the National Investment Center for Seniors Housing and Care (NIC), the industry’s main data tracking agency. NIC’s data is gathered from more than 14,000 properties across 140 metro markets nationally. The average occupancy for the quarter was 89.8 percent for seniors housing, which includes independent living, assisted living and memory care. That number was identical to the average occupancy over the last three years, and an increase of 10 basis points from the previous quarter. From a historical perspective, the average occupancy in the third quarter was 290 basis points above the industry’s cyclical low of 86.9 percent during the first quarter of 2010. Independent living properties led the industry in occupancy rate, with an average of 91.1 percent, an increase of 20 basis points over the prior quarter. The average occupancy at assisted living properties trailed at 88 percent, the same as the previous quarter but a drop of 20 basis points from the year prior. Healthy Tenant Demand Although occupancy was largely unmoved, absorption stayed positive as the market successfully took on new supply. Annual …

October 6, 2016

Georgia Hospitality Southeast Top Stories

Piedmont Atlanta Hospital Plans $603M Expansion

by Haisten Willis October 5, 2016

ATLANTA — Piedmont Atlanta Hospital in Atlanta has unveiled its plans for a 16-story expansion and renovation of the existing campus. Development costs are estimated at $603 million. Construction of the new patient tower is slated to begin in January 2017. The tower will be known as the Marcus Tower, in honor of benefactor Bernie Marcus, who gave $75 million for the project. Hospital officials have secured partnerships with 31 companies such as subcontractors, marketers and engineers. The project still requires approval from the Georgia Department of Community Health. The first phase of the project should be completed in September 2020. Phase II will begin in 2022, with one new patient floor completed per year, except for 2026 when the final two floors will be built out. The total project duration will be 10 years. In addition to the tower at the corner of Peachtree and Collier roads, the project includes major renovations to the hospital’s main campus and the addition of 114 general hospital beds, according to the Atlanta Business Chronicle. Approximately 45 percent of the hospital’s current space will soon exceed its life expectancy of 40 years, creating the need for the new construction and renovations, according to …

October 5, 2016

Loans Maryland Multifamily Southeast Top Stories

Walker & Dunlop Originates $469 Million Refinancing for 13-Property Multifamily Portfolio

by Katie Sloan October 4, 2016

BETHESDA, MD. — Bethesda, Md.-based Walker & Dunlop (NYSE: WD) has secured a $469 million refinancing for a 13-property multifamily portfolio owned and operated by Cortland Partners. The financing is comprised of seven-year, floating-rate loans featuring two years of interest-only payments followed by 30-year amortization schedules. Stephen Farnsworth of Walker & Dunlop secured the refinancing on behalf of Cortland Partners through Freddie Mac. The 13 properties within the portfolio are comprised of 4,871 units located in Texas, Georgia and Florida. The specific multifamily communities included in the deal were undisclosed. Headquartered in Atlanta, Cortland Partners develops, owns and operates multifamily properties in Colorado, Florida, Georgia, Louisiana, North Carolina, Ohio, Texas and Virginia. Walker & Dunlop is one of the largest commercial real estate finance companies in the U.S., providing financing and investment sales to owners of multifamily and other commercial properties. The company’s stock price closed on Monday, Oct. 3, at $25.54 per share, down from $27.69 one year ago. — Katie Sloan

October 4, 2016

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