CAPRE’s Commercial Real Estate Headlines for November 18, 2019

Check out the latest deals and developments in commercial real estate for November 18, 2019:

  • U.S. Multifamily Market Stays Strong into 4th Quarter, Yardi Matrix Reports: Continuing strong demand drove the average U.S. rent to a new high of $1,476 in October 2019, according to Yardi Matrix. Seventeen of the 30 major markets tracked by Yardi Matrix experienced year-over-year rent growth of at least 3.3% in October while only two trailed the 2.5% long-term average. The average national multifamily rent has grown by 32% since January 2012. Phoenix, Las VegasRaleigh, NCCalifornia’s Inland Empire and Sacramento, CA, were last month’s year-over-year rent growth leaders.The steady growth trend prompted OregonNew York and California to enact rent control measures over the past year; several other states are considering them. The report says “these laws are likely to prove counterproductive over time” by increasing cost burdens on markets’ new renters, limiting development of new stock and imposing disincentives for capital improvements. “The U.S. needs more units built, but rent control moves the needle in the opposite direction.”
  • Optimus Properties Refinances 3 buildings in Multifamily Portfolio: Optimus Properties, through a trio of coordinated refinancings, has refinanced the debt on three multi-family properties.  The total capitalization for the three refinances is roughly $18 Million USD and resulted in the return of approximately $3 Million USD in initial equity.  George Smith Partners secured all three loans.  Two of the loans were made by Greystone & Co. and one by Umpqua Bank. Greystone provided Optimus with an approximately $6 million, non-recourse loan for a 43-unit Multifamily property in the greater Seattle area. The loan provided 70% leverage and is fixed at a rate of 4.04% for ten years. Over the past several years, Optimus completely renovated the exterior of the property and turned just over one quarter of the units.
  • Hunt Real Estate Capital Provides a $5.2 Million USD Freddie Mac Loan to Refinance a Multifamily Property Located in the Bronx: Hunt Real Estate Capital has provided a Freddie Mac Small Balance Loan in the amount of $5.2 million to refinance a multifamily property located in the Bronx, New York. The property, 295 East 149th Street, is a six-story walk-up, mixed-use apartment building containing 22 residential units and three ground-floor retail units with a combined 975 square feet. The property was built in 1905, and the unit mix consists of one one-bedroom, one-bathroom apartment; 14 two-bedroom, two-bathroom units; and seven three-bedroom, three-bathroom units. The residential tenancy is 95.45% occupied, and the retail tenancy is 100% occupied. The borrower is 295 E 149 LLC. The transaction is a 5/15 Hybrid ARM with a loan term of 20 years. Repayment will be based on a 30-year amortization schedule, and the interest rate will automatically convert to a floating rate after the initial fixed-rate period of five years.
  • Industrial Bank Acquires City National Bank of New Jersey in Newark: Industrial Bank has acquired City National Bank of New Jersey, with two branches in New Jersey and one branch in Harlem, New York. Much like Industrial Bank, City National Bank was started to fill a great economic void within the African American community whose access to credit and banking services was historically limited. We consider this more of a partnership than an acquisition as we have enjoyed a long-standing relationship with City National Bank and its great team of bankers who share our common values and commitment to community service. On top of loan awards and financial services, as a Community Development Financial Institution (CDFI), Industrial Bank reinvests over 60% of its assets back into the community every year and continues to activate and support community programs.

 

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