NEIGHBORHOOD CHECK-IN – FENWAY PARK: Incredible iconic sports venue in a historic city. Begs the question whether Yankee Stadium should have been renovated instead of rebuilding next door. The ambiance of Fenway, inside and out, is the quintessential “experiential retail”. Contributing to the package: Berklee School of Music, the Boston Symphony Orchestra, the Boston Conservatory and Boston University. Only one deficiency. It’s the home of the Yankees archenemy. Go Sox.

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Mission Capital’s Jordan Ray discusses life-cycle of a transaction. Jordan is a principal on the Debt & Equity Finance desk at Mission Capital.

ABOUT JORDAN RAY
Jordan Ray is the Principal of The Debt & Equity Finance Group at Mission, which he founded in 2009. Jordan has been honored with such industry awards as the 2016 Real Estate Finance and Investment Magazine – Mortgage Broker of the Year Award, the 2013 and 2012 Observer Top 20 under 35 and the 2017 NYU Schack Institute Financing Deal of the Year. Jordan sits on the board and co founded EquityMultiple – an online marketplace real estate finance company – in 2015. Jordan is also actively involved in UK/European real estate financing.

CONTACT JORDAN RAY:

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LEARN ABOUT THE DEBT & EQUITY FINANCE DESK HERE:

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VISIT MISSION CAPITAL’S WEBSITE:

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While Mission Capital / Mission Global was attending the MBA conference in Washington, D.C., we were able to tour the historic C&O Canal in Georgetown which abuts the beautiful Rosewood Hotel Georgetown. It is in the process of being intricately restored. It was saved from becoming a two lane highway in 1961 after a long campaign by preservationists….like NYs High Line or Dallas’ Katy Trail 50 years later.

Capital advisor secures non-recourse loan for local developer’s residential, commercial and parking project

AUSTIN, Texas – Mission Capital Advisors announced that its Debt and Equity Finance Group has arranged $29.4 million in non-recourse financing for the construction of 1600 S 1st Street, an 86,700-square-foot, mixed-use condo and commercial development in the Bouldin neighborhood of Austin, Texas. The Mission Capital team of Jason Parker, Steven Buchwald and Jamie Matheny represented developer PSW Real Estate, LLC in arranging the senior loan from a local debt fund.

Situated in the heart of South Austin, the four-story property will feature 59 innovative residential condominiums, approximately 22,800 square feet of ground-floor commercial space and a 321-space underground parking garage. The 59 residences include six studio units, 26 one-bedroom units, 24 two-bedroom units and three three-bedroom units. The property will also feature a wide range of amenities, including a private resident roof deck and a second-floor resident courtyard.

“Austin’s recent growth has been well-documented, and the area around this property has seen its population increase by a staggering 27 percent since 2010,” said Parker. “While It is somewhat challenging to get construction financing for ground-up condos at this stage of the cycle, we were able to achieve our client’s goals by stressing the unmatched demand in this location and the strength of the sponsor’s business plan. We ultimately closed favorable financing with a local debt fund, which provided a non-recourse loan.”

The property’s location in the heart of South Austin positions it just one mile south of the Austin central business district, providing easy access to a myriad of restaurants, retail, and entertainment options. With the neighborhood’s recent population and job growth, this section of Austin suffers from a scarcity of residential, commercial and parking space, and this new development should help meet the local community’s demand for space.

“PSW is known in this region as a savvy developer that is plugged into the market dynamics in every submarket, and they realized they could capitalize on the area’s growth and provide much-needed product to local residents and businesses,” said Buchwald. “With their track record of success and knowledge of the local market, we were able to generate numerous bids, ultimately closing this strong deal with a local debt fund.”

Austin-based PSW is a nationally acclaimed real estate developer and homebuilder that designs and builds urban living environments for people who care about quality and their impact on the world around them. PSW is active in Austin, San Antonio, Dallas, Seattle, and Denver. Utilizing a discerning eye for creating value, PSW thoughtfully produces homes and communities that naturally integrate into their surrounding neighborhoods. With a vision for how the world will be living and working in the future, PSW creates homes that offer proximity to work, school and other important resources while implementing energy efficient construction methods and materials. These key elements promote urban density and conservation, reduce waste, and engender social connectivity.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York, Florida, Texas, California and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

Our friends, family and colleagues in Florida barely avoided the destruction of Hurricane Michael. Sadly, plenty of folks were not as fortunate. Hundreds of thousands are still without water and power, and many areas continue to be cut off by washed out roads. With that, we are asking for help. A link to donate is in our bio. Your money will go to a local charity with a minimum overhead (compared to Red Cross, for example). Please send help now.

Donate here: https://awf-reg.brtapp.com/HurricaneMichaelReliefDonations

Cross Collateralization of Two Properties Situated Across the Street from Each Other Exemplifies Firm’s Ability to Complete Unique Deals

WINSTON-SALEM, N.C. — Mission Capital Advisors announced that its Debt and Equity Finance Group has arranged $19.25 in non-recourse, floating-rate financing for the acquisition of a portfolio of extended-stay hotels in Winston-Salem, North Carolina.

The Mission Capital team of Beau Williams, Steven Buchwald, and Lexington Henn represented the sponsor, a partnership of Milestone Companies and Woodmont Lodging, in arranging acquisition financing for the two properties that comprise the portfolio – a 91-key Home2 Suites by Hilton and a 95-key SpringHill Suites by Marriott. The properties are located at 1010 Marriott Crossing Way and 1015 Marriott Crossing Way, respectively.

“Despite the fact that the Home2 Suites just recently opened and had limited operating history, we were able to create significant competition among our network of lenders, who were attracted to the strength of the sponsor and the projected debt yield,” said Williams. “The hotels’ close proximity to one another will enable the sponsor to limit operating expenses, while the two properties will benefit from being part of the Marriott and Hilton reservations systems. With these factors at play, we received strong interest from capital providers and closed a very strong deal for the borrower.”

The hotels are situated just off of I-40, seven miles from downtown Winston-Salem and Wake Forest University, and under 30 miles from the Piedmont Triad International Airport. The SpringHill Suites Winston-Salem, which opened in 2009, underwent substantial property improvements in 2017, including a full renovation of its guestrooms, lobby, furniture and fixtures, and a build-out of its ground-floor breakfast area.

Completed in February 2018, the Home2 Suites Winston-Salem is among the newest hotels from Hilton Worldwide, the second-largest hospitality company in the world. As a result, it will require few capital expenditures, while providing significant upside during its ramp up. The financing is the second loan that Mission Capital has secured on a Home2 Suites branded property this year. In August, the firm arranged a $19 million CMBS loan for the refinance of the Home2 Suites by Hilton in downtown Greenville, South Carolina.

“If the performance of the Home2 Suites in Greeneville and other locales is any indication of the success that the brand will experience in Winston-Salem, we anticipate a quick stabilization and high NOI margin. The resultant additional cash flow will be added to the already-robust net operating income that’s currently being generated by SpringHill Suites,” Williams said.

The portfolio will be managed by Milestone Hospitality Management, LLC, which is controlled by the principals of Milestone, a fully integrated hospitality investment and development firm headquartered in Baltimore, Maryland. Milestone’s executive leadership team has invested in, managed, and developed over 90 hotels across 25 states over the course of their respective careers. Asset management services will be provided by Woodmont Lodging, which has vast experience across the lodging industry.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York, Florida, Texas, California and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

Developer retires construction loan, inks creative interim financing at attractive rate

TAMPA, Fla.Mission Capital Advisors announced that its Debt and Equity Finance team has structured a creative $53-million non-recourse ramp loan for The Godfrey Hotel and Cabanas Tampa, a newly renovated, 276-key, waterfront hotel located at 7700 West Courtney Campbell Causeway in Tampa, Florida.

The Mission Capital team of Jordan Ray, Ari Hirt, Alex Draganiuk and Justin Hunt represented an affiliate of Oxford Capital Group in securing the loan from Marathon Asset Management. The financing will be used to repay the property’s construction loan and return additional capital to the sponsor.

The waterfront property is a Tampa icon that was once owned by the New York Yankees, and served as the club’s Spring Training home for several decades. In 2015, Oxford acquired the hotel with plans for a comprehensive redevelopment that would include creating Tampa’s premier lifestyle hospitality property, replete with top-of-the-line amenities and the recently opened WTR Pool & Grill. An upscale pool, cabana club, bar and corporate event space, WTR provides guests with an unmatched experience of luxury in a modern tropical setting, featuring handcrafted cocktails, exquisite dining and entertainment in a poolside area overlooking Tampa Bay.

“Oxford bought this property with the vision to create a unique hotel that has the best poolside venue in the Tampa market,” said Ray. “Just a month after the WTR Pool & Grill opened, there is a lot of action at the hotel and the pool, and we were able to repay the construction financing and replace it with a ramp loan with earn-outs at very attractive terms.”

In addition to the pool and cabanas, Oxford’s comprehensive repositioning campaign included the addition of 15 guest rooms; complete renovations of existing guestrooms, with hardwood flooring, marble countertops and other top-of-the-line amenities; and a complete renovation of the lobby, including the addition of a café and wine bar.

“Ramp loans are based in large part on projecting the property’s path to stability, and that adds a wrinkle of complexity that not all lenders can underwrite,” said Hirt. “However, Oxford’s long standing track record, as well as the incredible product they’ve created at the property, gave capital providers extreme confidence in the sponsor’s business plan. We produced a healthy market with several lenders vying for the deal, and we ultimately closed this floating-rate loan with very strong proceeds.”

Added Hirt: “The loan we ultimately closed is structured with an immediate return on equity as well as an additional earn-out once certain benchmarks are reached, which will bring the total proceeds to the full $53 million.”

Oxford Capital Group, LLC is a national hospitality focused real estate investment, development and management firm. Oxford Hotels and Resorts, LLC is its wholly owned hotel operating and branding affiliate. Oxford, its affiliates, and principals have been involved in approximately $3 billion of real estate and private equity investments, including approximately 13,000 hotel rooms and over 2,000 senior housing units. Among the firm’s most impressive recent developments is Essex on the Park in Chicago, which includes the expansion and comprehensive redevelopment of the historic Essex Inn on Michigan Avenue in Chicago and the ground-up construction of an adjacent 479-unit luxury apartment building. The property, whose $170-million construction loan was also arranged by Mission Capital, is slated to open in spring of 2019. For information, visit www.oxford-capital.com or www.ohrllc.com.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York, Florida, Texas, California and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

We consider Howard Marks (with his team of course) one of the smartest guys in the room.  He is the “five tool” customer: a lender to, borrower from, JV investor in, asset buyer from and seller of assets to, many of our clients.

[From the Wall Street Journal, Published October 8th 2018]
Mastering the Market Cycle’ Review: The Dangers of Optimism

Read the entire article at https://goo.gl/1wyvGL

Amid so much purportedly expert investment advice, it is worth asking who the experts themselves listen to. One answer, undoubtedly, is Howard Marks, among the world’s most successful investment managers as well as an intellectual leader of the profession. His client memos are widely distributed among investment professionals. “When I see memos from Howard Marks in my mail,” Warren Buffett has said, “they’re the first thing I open and read. I always learn something.”

When Emerging Market contagion reaches the shores of Sardinia and Amalfi, it could be a sign that summer is over!!

https://www.wsj.com/articles/you-should-worry-more-about-italys-bond-market-1538672646

[From the Wall Street Journal – October 4, 2018]
You Should Worry More About Italy’s Bond Market
By James Mackintosh
Oct. 4, 2018 1:04 p.m. ET

There are lots of reasons why contagion has been contained, but none are entirely satisfactory

The Italian bond market has a whiff of panic about it, while the rest of Europe has remained remarkably calm. This makes little sense, and is unlikely to last.

The basic logic runs like this. The rise in Italian yields relative to those of safe Germany is a sign that investors think Italy is more likely to default on its bonds, more likely to leave the euro and repay in devalued lira, or both. Fair enough: The populists now governing in Rome are unpredictable, and Italy’s government-debt pile is large.

Yet, it is obvious to everyone that if the third-biggest economy in the eurozone were to default on €2.3 trillion ($2.64 trillion) of debt or leave the currency area, it would at the very least blow up the rest of the Southern European countries. The bond yields of Spain, Portugal and Greece would soar, even if somehow they were able to remain within the euro.

“Italy is not Greece” is usually invoked as reassurance. In fact, the situation in Italy is a whole lot worse than Greece, because the solution applied to Athens—a default within the eurozone and capital controls—couldn’t plausibly be applied to Italy’s much more important economy and much larger debts.

This should mean that higher risk to Italy is also a higher risk to other countries that would face trouble, not to mention the many large European banks with significant Italian exposure.

So why has contagion been contained? There are lots of answers, none entirely satisfactory.
First is the idea that everything is fine because Italy isn’t in a full-blown crisis. While Italian government-bond yields have jumped, pushing up the spread over German yields that is the standard risk gauge, they aren’t high enough to make Italy’s debt unsustainable by themselves. Put another way, investors think everything will be fixed after a bit of pressure on the government in the form of higher yields.

“It’s fairly consensual that it will be resolved with another round of market pressure,” says Gilles Moëc, chief developed Europe economist at Bank of America Merrill Lynch.

But this is a dangerous game. If the market pushes up borrowing costs too much, Italy would be unable to service its debt with politically plausible tax levels. At that point, the spiral would become self-fulfilling, as investors fled and credit ratings were downgraded, and yields rose even more. Serious contagion would be all but assured. Don’t forget how suddenly Italian bond yields spiked in 2011 and again in 2012.

Harvinder Sian, a bond strategist at Citigroup, thinks a 10-year yield of 3.5%-4% is now the tipping point, after which yields jump toward the 7% reached at the height of the last euro crisis. Italy isn’t quite there, but on Tuesday its 10-year yield briefly reached 3.46%, the highest in four years.

A second explanation is that the lack of contagion is due to the quirks of supply and demand in Europe. Investors in European bonds are desperate for yield, and while they now worry about Italy, they have simply switched to other countries offering a decent pickup over German yields, such as Spain. At the same time, the threat of billions of euros of extra Italian bond issuance to finance its planned larger budget deficit next year means a higher yield is needed to attract buyers.

If eurozone governments were regarded as equally risky, any significant gap in yields would be pounced on by speculators. But arbitrage is difficult when there is such an obvious danger of a sudden jump in Italian yields, and outright buyers are deterred both by the risks and by worries that clients may be upset to find themselves heavily exposed to Italy.

One exception is UBS Wealth Management, which has piled into short-dated Italian bonds recently for the extra yield, arguing that Italy won’t default in the next two years.

Chief Investment Officer Mark Haefele says rather than infect other eurozone government bonds, Italian contagion shows up in the fall in the euro—perhaps linked to the idea that the European Central Bank will step in to buy more bonds of countries such as Spain that have restructured their economies and followed European debt rules.

This leads to a third possible explanation, involving even more intervention. A catastrophic Italian default or euro exit might finally push the rest of the eurozone to integrate properly, something that has proved politically toxic in Germany. “Italy could be the final straw that forces Europe closer together,” Mr. Haefele says.

True risk-sharing across the eurozone—in effect a united states of Europe—would make Spanish bonds only as risky as German bonds, justifying the absence of contagion. But it is hard to believe that divided European leaders worried about a populist backlash could take such a step, let alone bring German voters with them.

The market can stay irrational for a long time, and Italian politics is even more unpredictable than usual. My best guess is that a compromise will calm everything down for a while. But the danger of an Italian falling-out with Brussels prompting a self-fulfilling market crisis is real. At that point, contagion would be inevitable.

God forbid, the Coffee Shop is closing, and it is becoming a Chase Bank branch. Chase is a great bank but with so much retail vacancy throughout New York City, isn’t there a solution to have a new Chase somewhere nearby and keep Coffee Shop where it is? NYC’s culture is taking a big hit losing an establishment like the Coffee Shop. What’s of greater benefit? One more ATM? Or a unique, only-in-New York-kind-of-restaurant? We think the answer is obvious.

YouTube video

Mission Capital’s Jordan Ray discusses our joint venture with UK-based firm, Brotherton. Jordan is a principal on the Debt & Equity Finance desk at Mission Capital.

Jordan Ray is the Principal of The Debt & Equity Finance Group at Mission, which he founded in 2009. Jordan has been honored with such industry awards as the 2016 Real Estate Finance and Investment Magazine – Mortgage Broker of the Year Award, the 2013 and 2012 Observer Top 20 under 35 and the 2017 NYU Schack Institute Financing Deal of the Year. Jordan sits on the board and co founded EquityMultiple – an online marketplace real estate finance company – in 2015. Jordan is also actively involved in UK/European real estate financing.

ABOUT BROTHERTON:
Mission Brotherton is an alliance between Mission Capital and Brotherton Real Estate. Combining Mission’s institutional reach with Brotherton’s deep knowledge of the UK and European markets, allows us to provide real estate capital solutions to our clients, globally.

Mission Brotherton

ABOUT JORDAN RAY:

Team

LEARN ABOUT THE DEBT & EQUITY FINANCE DESK HERE:

Debt Equity

VISIT MISSION CAPITAL’S WEBSITE:

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