Mission Capital has advised Freddie Mac in its first multifamily bulk loan sale.
October 29-November 11, 2013
Mission Capital has advised Freddie Mac in its first multifamily bulk loan sale.
October 29-November 11, 2013
Gregg Applefield, director of the debt and equity team at Mission Capital Advisors, a capital markets advisory company, has relocated from the firm’s New York City location to its Newport Beach office.
Mission Capital Advisors’ director Gregg Applefield discusses how the debt markets have maintained a positive tone since Labor Day, and how that’s going to continue into the next year.
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Three Things to Know
About Capital Markets
Butler Burgher Group (BBG) is hard to miss these days. With 21 offices nationwide, BBG still offers personalized attention through a single point of contact, and a sole focus on valuation, advisory and assessment services. Learn more here.
Remember the interest rate uptick early this summer? Just a hiccup. Lenders held their breath and then got back to commercial real estate deals as eagerly as beforeif not more, experts tell us.
1) The marketâs shrugged off those summer jitters.
The debt markets have maintained a positive tone since Labor Day, and that's going to continue into the next year, Mission Capital Advisors director Gregg Applefield tells us. Banks, flush with cash, are eager to deploy it. (So get friendly with a bank before the holidays so you get on its gift list.) Insurance companies are telling the market they're likely to increase their allocations next year. CMBS has rallied since the summer and continues to experience significant demand in a yieldstarved environment.
October 28, 2013
2) Competition for deals has heated up.
"The number of banks, life companies, and CMBS lenders actively competing to win permanent financing requests has consistently increased monthbymonth since the beginning of the year," Talonvest Capital principal Eric Snyder tells us. "I expect that this will continue well into 2014." The deals aren't necessarily vanilla, either. Recently Irvinebased Talonvest oversaw $116M in 10year loans in the low 5% area secured by selfstorage properties in Illinois, Florida, and Georgia. (That's more of a rum raisin deal.) The financing was provided by a New Yorkbased commercial real estate finance company.
3) New players are jumping into the game.
"There's also been an influx of new entrants to the transitional lending market, including credit companies, debt funds, and mortgage REITs, which has driven down spreads materially for transitional properties," Gregg says. Similar to the debt markets, he expects equity markets to continue to remain strong. That's because an abundance
of global capital is eyeing US real estate for some sweet yields, especially when compared to most other investments. Recently Gregg relocated to the company's Newport Beach office, as part of the company's West Coast expansion.
Multifamily Loans Are Hot Commodities
in 23 states, with 60% in California and 11% in Texas.
Attractive due to the loans' seasoning, amortizations, and coupons, Ken says, this pool comes online on the heels of Freddie Mac's first multifamily bulk loan sale. The GSE sold 27 performing mortgages (tied to multifamily, student housing, and assistedliving facilities) with an unpaid principal balance of $195M to an affiliate of Colony Capital. Multifamily loans are viewed positively because of the asset class's low volatility, he tells us. Other incomeproducing properties like office and retail typically have fewer tenants, thus a higher concentration of credit risk from tenant defaults. And for that reason, vacancy spikes are usually less pronounced in apartments due to lack of tenant concentration, Ken explains.
OC Office Market Loses a Little Steam
Orange County office leasing decreased the past several quarters and net absorption was downbut not negativein Q3, with average asking rents remaining stable and actually increasing in certain areas, Transwestern managing SVP Liz Hurley tells us. According to Transwestern's Q3 OC office report, total net absorption for the third quarter was just over 100k SF, the lowest amount since Q1 '12. There are signs of downsizing in the mortgage industry, which, coupled with major moveouts, will contribute to continued decline in net absorption during Q4.
"In the third quarter, ClassA product experienced an increase in asking rents due to the continued flight to quality, which we anticipate should continue through the end of the year," Liz says. (Everybody likes nice things.) Even so, overall market fundamentals will probably improve over the next few years, as the
underlying economy improves, especially through employment growth. Also, the decreasing number of distressed transactions point to an improving sales market. With money cheap, growing companies
are looking hard at buying rather than renting, such as the recent purchase of 1761 E Garry Ave in Santa Ana (pictured) by Partner Engineering and Science. CBRE SVP Michael Kenndall repped the buyer in the deal.
Go ahead, take a walk on the wild side. RIP, Lou Reed. Send ideas and suggestions to dees.stribling@bisnow.com.
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Mission Capital Advisors has arranged $36.9 million in financing on behalf of the privately held real estate investment firm The Siegel Group as part of a comprehensive debt restructuring the borrower recently completed on several of its Las Vegas properties.
October 25, 2013
..,Ve were able to e.'<Cel in these transactions by """'fully e.'CJ>Jaining to lenders the unique no–lease-required business model of the Sie gelGroup,highlighting[fuunder and CEO]Ste phen Siegel's operational experienoe and by demonstrating that the properties had strong financial perfurmanoes in both good timesand bad,• he said_'"f his stability is especially im pressive in Las Vegas, which was one of the hardest–hit nuul<ets in the country during the downtum."
Mission Capital’s Jordan Ray has been honored with the distinction of of being named one of Real Estate Forum’s 45 Under 40.
MISSION CAPITAL ADVISORS
WOULD LIKE TO CONGRATULATE
J RDAN RAY
ON BEING ONE OF REAL ESTATE FORUM’S
40 UNDER 40
www.www.missioncap.com
New York 212 925 6692
Newport Beach 949 706 3001
Palm Beach Gardens 561 622 7022
Austin 512 327 0101
Mission Capital Advisors advised Freddie Mac in its first multifamily bulk loan sale.
REAL ESTATE WEEKL
OCTOBER 23, 2011
SELLING POINTS
• MISSION CAPITAL A.OVlSORS Mission accomplished for Freddie
Mis$ion CapitalAlfvi$01’$ advised Froddje Mac in i1S first mu tifamlly bulk loan sale.
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“Tt.e deep ltl tor
ttMsacton. whlcll ran the spectrum from balance
s’leet lenders to prlva:e equity f\lnds, was further
proof that the U.S.real tae
lng steamdesp‘le reoen1in1ere61 rae
said Will S1edge, manag g director of 1\&slon.
·we were exttemety J>leased “‘ th the outcome
aDd firmly believe that fundamentals Yer$US
merely low absolute rates are now dnviog t
market.“
Freddie Mac has sold a $195 million loan portfolio, the first multifamily bulk sale the government-sponsored enterprise has completed to date. The loans were marketed by Mission Capital and sold to private equity firm Colony Capital.
Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Debt & Equity Finance Group has arranged approximately $37 million in financing on behalf of The Siegel Group Nevada, Inc., a privately held real estate investment firm. The financing is part of a comprehensive debt restructure recently completed by The Siegel Group.
Mission Capital Advisors has relocated Gregg Applefield, a director in its debt and equity team, to its Newport Beach office as part of a larger move to expand its debt and equity practice to the West Coast.
Mission Capital Advisors, a leading national real estate capital markets solutions firm, says that its Debt & Equity Finance Group has arranged approximately $37 million in financing on behalf of the Siegel Group Nevada, Inc., a privately held real estate investment firm. The financing is part of a comprehensive debt restructure recently completed by the Siegel Group.
Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Debt & Equity Finance Group has arranged approximately $37 million in financing on behalf of The Siegel Group Nevada, Inc., a privately held real estate investment firm. The financing is part of a comprehensive debt restructure recently completed by The Siegel Group.
Pleased with the strong buy-side response to its first bulk offering of multi-family mortgages, Freddie Mac plans to roll out more portfolios of seasoned performing loans – but not right away. Mission Capital advised Freddie on the sale, which closed Oct. 3.
More Freddie Portfolio Sales Ahead
Pleased with the strong buy-side response to its first bulk offering of multi-family mortgages, Freddie Mac plans to roll out more portfolios of seasoned performing loans — but not right away.
The recent auction of the $194.8 million portfolio “was not a one-off ” transaction, said Michael Lipson, Freddie’s senior vice president of multi-family asset management and operations.
But the agency will likely wait until next year before sched- uling a second auction of loans from its huge balance sheet. Future sales will be held opportunistically, depending on mar- ket conditions and the agency’s ongoing asset-management strategies, Lipson said — unlike the guaranteed securitizations of newly originated, multi-family mortgages that Freddie floats every few weeks.
Some 23 banks, fund shops and other lenders submitted offers for Freddie’s initial bulk-loan offering, the agency an- nounced this week. After two rounds of bidding, Colony Capital of Santa Monica, Calif., walked away with the entire portfolio, paying roughly 90 cents on the dollar. Mission Capital advised Freddie on the sale, which closed Oct. 3. The mix of fixed- and floating-rate loans was split into two pools. One, with an aggre- gate balance of $171.2 million, consisted of 22 loans on multi- family and student-housing properties totaling 3,811 units. The other contained three loans, adding up to $23.6 million, on assisted-living facilities with a total of 453 beds.
The auction reflected the latest twist in long-running efforts by Freddie and Fannie Mae to comply with a mandate from their regulator, the Federal Housing Finance Agency, to reduce mortgage holdings. Both agencies have been operating under federal conservatorship since the height of the credit crisis in
2008. Before it could try a bulk loan sale, Freddie had to devel- op procedures and get approval from FHFA. “Now that we have it available as an execution model, we’ll look for opportunities to do it again,” Lipson said.
Freddie currently securitizes more than 95% of its origina- tions in the multi-family sector. The legacy loans sold to Colony were extracted from Freddie’s portfolio of unguaranteed multi-
family mortgages, which stood at $69.4 billion on June 30. That was down from $79.6 billion a year earlier and $85.9 billion at yearend 2010.
Lipson is overseeing the management and gradual disposi- tion of that relatively illiquid portfolio. Most of the reduction so far has been due to amortization and refinancings, he said. Virtually all of the multi-family loans in that balance-sheet portfolio are still performing, with only 0.05% of the overall balance delinquent by at least 60 days at the end of August.
COMMERCIAL MORTGAGE ALERT: Oct. 18, 2013, 5 Marine View Plaza, Suite 400, Hoboken NJ 07030. 201-659-1700