Mission Capital Secures $19M Refinancing for Hilton-Branded Hotel in Downtown Greenville

August 24, 2018

GREENVILLE, S.C. — Mission Capital Advisors has arranged a $19 million loan for the refinancing of the Home2 Suites by Hilton Greenville Downtown. The 117-room hotel is located at 350 N. Main St. in downtown Greenville. Beau Williams, Steven Buchwald and Justin Hunt of Mission Capital arranged the non-recourse loan on behalf of the borrower, Sycamore Investment Group, which used the funds to retire an existing construction loan. The extended-stay hotel opened in 2016 and features a Spin2Cycle fitness center, outdoor pool, outdoor patios with grills and fire pits and valet parking.

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Mission Capital Secures $19M Refinancing for Hilton-Branded Hotel in Downtown Greenville

August 24, 2018

GREENVILLE, S.C. — Mission Capital Advisors has arranged a $19 million loan for the refinancing of the Home2 Suites by Hilton Greenville Downtown. The 117-room hotel is located at 350 N. Main St. in downtown Greenville. Beau Williams, Steven Buchwald and Justin Hunt of Mission Capital arranged the non-recourse loan on behalf of the borrower, Sycamore Investment Group, which used the funds to retire an existing construction loan. The extended-stay hotel opened in 2016 and features a Spin2Cycle fitness center, outdoor pool, outdoor patios with grills and fire pits and valet parking.See more here:

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Sycamore Investment Group capitalizes on hotel’s success, inks refinancing at favorable terms

GREENVILLE, S.C. (Aug. 21, 2018) — Mission Capital Advisors announced that its Debt and Equity Finance Team has arranged $19 million of permanent, non-recourse financing for the Home2 Suites by Hilton Greenville Downtown, a 117-key, extended-stay hotel located at 350 North Main Street in downtown Greenville, South Carolina. The Mission Capital team of Beau Williams, Steven Buchwald, and Justin Hunt represented Sycamore Investment Group in arranging the non-recourse loan.

The 110,491-square-foot property is a premier, extended-stay hotel, with well-appointed studio and one-bedroom suites that include full kitchens and in-suite work stations. The property offers guests a wide range of amenities, including the Spin2Cycle fitness center; an outdoor pool; outdoor patios with grills and fire pits; and valet parking. Since opening in September 2016, the hotel has been one of the top-performing extended-stay/limited-service hotels in Greenville. Building on the hotel’s immediate success, ownership sought to retire the property’s construction loan and procure permanent financing.

“Although Home2Suites has ramped up its operations quickly, a lot of supply has come to the local market, so we had to demonstrate to lenders that the hotel would maintain its strong performance,” said Williams. “As an extended-stay hotel, the property differentiates itself from much of the competition, and the diversified clientele it attracts points to its continued success. We were able to leverage our lender relationships to create a competitive market for this deal resulting in very favorable terms to our client.”

The hotel is situated in a prime location in downtown Greenville near countless restaurants and retail options. It is also within five minutes of the Bon Secours Wellness Arena — which hosts hockey games and performing artists — and the TD Convention Center, one of the largest exhibit halls in the country.

“After creating one of the Greenville market’s most inviting and successful hospitality properties, Sycamore was able to capitalize on its success,” said Buchwald. “This non-recourse CMBS loan retires the construction financing, which was structured with recourse, and returns capital to the sponsor. This allows them to continue executing their business strategy and pursue other development opportunities.”

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.missioncap.com.

August 17, 2018

Oxford Capital Group has scored a $53 million loan from Marathon Asset Management to refinance construction debt on The Godfrey Hotel and Cabanas in Tampa, Fla., Commercial Observer can exclusively report.

The non-recourse, floating-rate loan carries a spread in the low 400s over LIBOR, sources said, and retires roughly $30 million in previous construction financing from CapitalSource. Additional capital will be provided to the sponsor upon meeting certain performance measures.

Mission Capital Advisors’ Jordan Ray, Ari Hirt, Alex Draganiuk and Justin Hunt secured the debt.

Mission Capital Arranges $53M Refinancing of Waterfront Hotel in Tampa

August 21,2018

TAMPA, FLA. — Mission Capital Advisors has arranged a $53 million loan for the refinancing of The Godfrey Hotel and Cabanas Tampa, a 276-room hotel located at 7700 W. Courtney Campbell Causeway in Tampa. The waterfront property was once owned by the New York Yankees and served as the team’s spring training home for several decades. Jordan Ray, Ari Hirt, Alex Draganiuk and Justin Hunt of Mission Capital arranged the non-recourse loan through Marathon Asset Management on behalf of the borrower, an affiliate of Oxford Capital Group. Oxford acquired the hotel in 2015 and transformed the property with the addition of 15 guestrooms, complete renovations of guestrooms and the lobby and the addition of the WTR Pool & Grill. WTR includes a pool, cabana club, bar and corporate event space overlooking Tampa Bay.

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Tampa Waterfront Hotel Secures $53M Floating-Rate Loan

August 24, 2018

TAMPA, FL–An iconic Tampa waterfront hotel that was once the spring training camp for Major League Baseball’s New York Yankees landed a $53-million non-recourse ramp loan that was structured by Mission Capital Advisors. It was secured by the Godfrey Hotel and Cabanas Tampa, a newly renovated, 276-key, waterfront hotel located at 7700 West Courtney Campbell Causeway.

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.

In 2015, Oxford acquired the hotel with plans for a comprehensive redevelopment that would include top-of-the-line amenities and the recently opened WTR Pool & Grill. The result was an upscale pool, cabana club, bar and corporate event space 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.”

Repositioning Program Created Added Value

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 and other top-of-the-line amenities.

“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.”

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.

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Owner of renovated waterfront hotel in Tampa borrows to repay construction loan

Oxford Capital Group the Godfrey Hotel & Cabanas Tampa also borrowed $53M to “return additional capital to the sponsor”

August 26, 2018

The owner of a renovated bayfront hotel in Tampa, the Godfrey Hotel & Cabanas Tampa, repaid a construction loan with a $53 million “ramp” loan.

Besides paying off the construction loan, proceeds of the ramp loan from also will be used “return additional capital to the sponsor,” Mission Capital Advisors said in a press release.

“Ramp loans are based in large part on projecting the property’s path to stability … a wrinkle of complexity that not all lenders can underwrite,” Ari Hirt of Mission Capital said in a prepared statement.

Hirt arranged the loan from Marathon together with Mission Capital’s Jordan Ray, Alex Draganiuk and Justin Hunt.

Several lenders competed for the deal, according to Hirt, before the property owner, Oxford Capital Group, LLC, closed the adjustable-rate $53 million ramp loan from Marathon Asset Management.

The Godfrey Hotel & Cabanas Tampa is a 276-key hotel a 7700 West Courtney Campbell Causeway in Tampa.

The property features the WTR Pool & Grill, a poolside dining and entertainment destination overlooking Tampa Bay.

Oxford acquired the hotel in 2015 and then repositioned it by adding the swimming pool, cabanas, and 15 guest rooms. The company also renovated existing guest rooms, with hardwood flooring and marble counter tops, and redid the lobby with the addition of a café and wine bar.

The waterfront property previously was the longtime spring-training home of Major League Baseball’s New York Yankees. – Mike Seemuth

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Mission Capital Advisors Arranges $28.5 Million in Construction Financing for 218-Key Hilton Property in Fort Lauderdale

19-floor building will include two Hilton hotels:

a 106-key Home 2 Suites and a 112-key Tru by Hilton

 

FORT LAUDERDALE, Fla. (Aug. 10, 2018) — Mission Capital Advisors today announced that its Debt and Equity Finance Team has arranged $28.5 million in non-recourse financing for the construction of a 218-key, Hilton-franchised hospitality property at 315 Northwest 1st Avenue in Fort Lauderdale, Florida. The Mission Capital team of Jordan Ray, Stephen Emery, Ari Hirt, Jamie Matheny and Lexington Henn represented a joint venture of Merrimac Ventures and Driftwood Acquisitions and Development in securing the loan from Bank OZK.

The 19-story property will feature two Hilton-branded offerings. The 106-key Home 2 Suites will be an all-suite facility, featuring an array of in-room and public amenities, including abundant conference and workspace areas and in-room kitchens. The 112-key Tru by Hilton will be designed for young professionals and travelers, and will feature a robust amenity package, including a fitness center, game room and lounge. The two hotels will have separate lobbies, and will each have access to the building’s 102 parking spaces and a 5,000-square-foot outdoor pool deck and bar.

“We’ve done a lot of construction financing for hotels this cycle, but we’ve rarely seen so much lender interest in a deal,” said Ray. “The sponsorship on this property has developed some of the market’s most successful hotels, and they decided to create two Hilton-branded hotels at this property to meet the distinct needs of different market segments. With this financing in hand, construction is already underway, and Fort Lauderdale visitors should be able to enjoy its strong location and amenities by 2020.”

The property is located in Fort Lauderdale’s trendy Flagler Village neighborhood, providing hotel visitors with access to a wide range of art galleries, restaurants and tourist attractions. The hotels will be easily accessible to the beach, Fort Lauderdale International Airport and I-95.

“This deal had a very complex capital stack, including a significant amount of EB-5 financing, but we were able to structure a very strong non-recourse loan for the sponsors,” said Hirt. “The market for construction financing has improved in recent months, and we received a tremendous amount of interest from foreign and regional banks, insurance companies and mortgage REITs. The execution was very strong, and we were able to move the deal in record time, going from term sheet to closing in less than 60 days.”

 

 

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.missioncap.com.

$29M Construction Financing for Fort Lauderdale Dual- Branded Hilton Development

August 14, 2018

Mission Capital Advisors arranged $28.5 million in non-recourse financing for the construction of a 218-key, Hilton-franchised hospitality property in Fort Lauderdale’s trendy Flagler Village neighborhood. A joint venture of Fort Lauderdale-based Merrimac Ventures and Driftwood Acquisitions and Development secured the loan from Bank OZK.

The 19-story property at 315 Northwest 1st Ave. will feature two Hilton-branded offerings. The 106-key Home 2 Suites will be an all-suite facility, featuring an array of in-room and public amenities, including conference and workspace areas and in-room kitchens. The 112-key Tru by Hilton will be designed for young professionals and travelers, and will feature an amenity package that includes a fitness center, game room and lounge.

The two hotels will have separate lobbies, and will each have access to the building’s 102 parking spaces and a 5,000-square-foot outdoor pool deck and bar.

Mission Capital’s Jordan Ray, Stephen Emery, Ari Hirt, Jamie Matheny and Lexington Henn represented the JV.

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JV Lands $29M Construction Loan for Fort Lauderdale Hilton

Mission Capital Advisors arranged the financing on behalf of Merrimac Ventures and Driftwood Acquisitions and Development, to begin building a dual-brand, 218-key project.

August 15, 2018

A joint venture between Merrimac Ventures and Driftwood Acquisitions and Development has secured $28.5 million for the construction of a new Hilton-franchised hotel in Fort Lauderdale, Fla. Mission Capital Advisors arranged the non-recourse loan through Bank OZK, on behalf of the partnership.

Located at 315 Northwest First Ave., the hotel will feature a total of 218 keys across two properties. The 106-key Home 2 Suites will be an all-suite asset, featuring amenities such as conference and work space, as well as in-room kitchens. The 112-key Tru by Hilton will be designed for young professionals and travelers, offering features such as a fitness center, lounge and game room. Both hotels will offer access to 102 parking spaces and a 5,000-square-foot outdoor pool deck and bar. The 19-story property will provide convenient access to Fort Lauderdale International Airport, Interstate 95 and nearby attractions such as beaches, restaurants, art galleries and tourist spots.

Mission Capital Advisors’ Debt and Equity Finance team of Principal Jordan Ray, Managing Directors Stephen Emery and Ari Hirt, Director Jamie Matheny and Vice President Lexington Henn, represented the borrower.

“We’ve done a lot of construction financing for hotels this cycle, but we’ve rarely seen so much lender interest in a deal,” said Ray, in a prepared statement. “The sponsorship on this property has developed some of the market’s most successful hotels, and they decided to create two Hilton-branded hotels at this property to meet the distinct needs of different market segments. With this financing in hand, construction is already underway, and Fort Lauderdale visitors should be able to enjoy its strong location and amenities by 2020.”

In April, Mission Capital Advisors represented a joint venture of The Schupp Cos. and LodgeWorks Partners in securing $47 million in refinancing for Hyatt Place Arlington Courthouse Plaza, a 168-key hotel in Virginia.

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Jordan Ray (Principal) On Mission Capital [VIDEO]

Mission Capital’s Principal, Jordan Ray, discusses an array of topics about Mission Capital. From the company origins, business philosophies, to what the future of the company has in store, this is a fascinating insider’s view about the company. Watch the first two chapters below.

If you’ve ever been curious about learning more about Mission Capital, watch these videos now.

To learn more about Jordan Ray, please visit his team page here.

Commercial real estate professionals were largely unsurprised by the Federal Reserve’s interest rate hike Wednesday, and many do not expect the move to have an immediate impact on the market. Should the Fed continue to bump short-term rates at a fast clip, however, it could adversely impact the industry and the overall economy.

June 13, 2018

“In general, these moves are a function of an improving economic environment whereby inflation is expected to rise. Higher rates will increase the cost of capital, but there is a record amount of fundraising seeking a home in CRE and so we do not anticipate higher short-term interest rates to diminish access to capital,” Cushman & Wakefield Economist and Americas Head of Forecasting Rebecca Rocket said in an email.

Following the monthly two-day Federal Open Market Committee meeting, Fed officials increased the benchmark federal-funds rate by a quarter-percentage point to a range of 1.75% to 2%. This marked the second move of the year, after the Fed bumped rates to a range of 1.5% to 1.75% in March.

Recently appointed Fed Chair Jerome Powell suggested two more rate hikes could be on the horizon as the Fed looks to temper a growing economy and keep the inflation rate at 2%. The labor market continues to boom with employers adding 223,000 jobs in May and unemployment reaching historic lows of 3.8% — a level the U.S. has only experienced twice in the past half-century.

“The decision you see today is another sign that the U.S. economy is in great shape,” Powell said during the press conference following the meeting, the Wall Street Journal reports. “Growth is strong. Labor markets are strong. Inflati on is close to target.”

Should the Fed maintain its pace of rate hikes, commercial real estate developers and borrowers could be adversely affected by higher lending costs and tighter access to construction financing, which could, in turn, stifle deal volume and further compress margins for investors. As it stands, another two bumps in short-term rates this year are not expected to stifle investor access to capital, but it will lead to higher borrowing costs.

The market foresees a 75% probability of a third move in September and a 50% chance of a fourth and final move in December, according to a Cushman & Wakefield survey. Bisnow asked six economists and real estate professionals in the debt and finance space about the impact of this move on the industry. Read their responses below.

Mission Capital Advisors Director of Debt and Equity Finance Group Jillian Mariutti

What was your reaction to this boost in rates?

FOMC said in March that it was likely to raise rates two more times this year, so — especially with the economy humming along so strongly — today’s announcement was not surprising, and didn’t seem to give the markets any shock. It is also now expected that there will be two more rate hikes this year, for a total of four (not three, as was expected in March).

Some economists predict the Fed will boost rates four times this year. How will these moves impact CRE lending activity and access to capital, if at all?

Thus far, the rate hikes have not made any major waves. However, we may see some borrowers in need of refinancing their properties try to lock in loans before further increases. It’s noteworthy that the FMOC median projections show the Fed funds rate climbing from 2.375% in 2018 to 3.375% in 2020. LIBOR generally lives at about 20 basis points above the Fed target rate, so we could see LIBOR north of 2.5% by the end of the year and more than 3.5% by 2020. This will obviously have a significant impact for CRE borrowers with floating-rate debt.

What does this move signal about the state of the U.S. economy and its continued recovery?

The rate hike is definitely an expression of the strength of the overall economy, which will hopefully have positive ripple effects across the industry. The factors that the Fed will look at in determining whether to make future rate hikes include sustained expansion of economic activity, the strength of the labor market and inflation near their 2% objective. With unemployment just below 4% — its lowest rate since 2000 — and other factors on track, everything points to the Fed hitting its expectation of four increases in 2018.

Where does the 10-year Treasury stand now in relation to the long-term average, and what does this rate hike signal for the industry moving forward?

The 10-year now stands at 2.98%, well below its long-term average.

Any parting thoughts?

Since LIBOR moves in lockstep with the Fed rate, more or less, if we do indeed have two additional rate hikes this year, that would continue to push LIBOR up and increase the cost of capital. As a result of that, we’re likely to see an increasing number of borrowers execute hedges to mitigate their interest-rate risk.

Ten-X Chief Economist Peter Muoio

What was your reaction to this boost in rates?

We were unsurprised. The Fed had signaled this increase and the strength of the economy suggested that there would be no hesitation to the increase.

Some economists predict the Fed will boost rates four times this year. How will these moves impact CRE lending activity and access to capital, if at all?

We believe that CRE investors have already factored this into their thinking. Capital remains available and we don’t foresee this diminishing. Higher financing costs and upward pressure on cap rates will likely exert downward pressure on pricing and perhaps make negotiations more prolonged.

What does this move signal about the state of the U.S. economy and its continued recovery?

The U.S. economy is strong, and the job market is healthy. Consumers are confident and spending, so the Fed continues to tighten as expected.

Where does the 10-year Treasury stand now in relation to the long-term average, and what does this rate hike signal for the industry moving forward?

The 10-year is still low by historical standards, it’s just up from the extreme lows of recent years. Clearly, increases in rates can have an impact on pricing and deal flow, but we are not at some choke point for the CRE capital markets.

Any parting thoughts?

Absent some external disruption to the economy, the Fed will continue to tighten.

Cushman & Wakefield Economist and Americas Head of Forecasting Rebecca Rocket

What was your reaction to this boost in rates?

This was a widely expected move, so the only cause for concern would been if the FOMC did not vote to raise the federal funds rate.

Some economists predict the Fed will boost rates four times this year. How will these moves impact CRE lending activity and access to capital, if at all?

We agree that the FOMC is likely to vote to raise rates at four meetings this year, but decisions will continue to be data-driven. We are halfway there. In general, these moves are a function of an improving economic environment whereby inflation is expected to rise. Higher rates will increase the cost of capital, but there is a record amount of fundraising seeking a home in CRE and so we do not anticipate higher short-term interest rates to diminish access to capital.

What does this move signal about the state of the U.S. economy and its continued recovery?

It signals that the economy is performing well and we are well beyond the point where the expansion is considered a “recovery.” Inflation is rising because the labor market is tight, and the U.S. and global economies are strong. It also signals that the FOMC anticipates continued growth and inflation, since it has been clear that it is willing to allow inflation to overshoot its target for short periods.

Where does the 10-year Treasury stand now in relation to the long-term average, and what does this rate hike signal for the industry moving forward?

The 10-year Treasury rate ended the day around 3%, which is 285 basis points below the historical average. A hike, while signaling that the economy is improving and inflation brewing, does not reflect the fact that capital is still relatively cheap compared to the past. Longer-term interest rates will continue to rise and commercial real estate will continue to benefit from continued economic and job growth. Jobs have been created at a 2 million year-over-year pace for a record 62 consecutive months now, which puts into perspective some of the tailwinds buttressing demand for commercial space.

JLL Ports, Airports and Global Infrastructure Managing Director, Economist and Chief Strategist Walter Kemmsies

What was your reaction to this boost in rates?

I was not surprised. [Every] cost-push factor is going up: commodity prices, labor, transportation rent/lease rates. The Fed is exactly on target.

Some economists predict the Fed will boost rates four times this year. How will these moves impact CRE lending activity and access to capital, if at all?

The impacts are already being felt in lending activity, not just in real estate but also infrastructure — the surge in municipal Bain’s issuance is substantial in the last few months.

What does this move signal about the state of the U.S. economy and its continued recovery?

[It] says demand growth remains in excess of supply growth [and signals the] need to moderate demand growth via rate increases.

Any parting thoughts?

Consumer balance sheets are still fragile. I am struggling a bit to see four holes this year. But [I] am in consensus on four hikes this year.

Colliers International USA Chief Economist Andrew Nelson

What was your reaction to this boost in rates?

With inflation running at multi-year highs simultaneous with unemployment at multi-decade lows, there should be little surprise that the Fed is moving more consistently now to cool the economy. Since starting to raise rates in December 2015, the Fed has hiked the Federal Funds Target Rate a total of seven times in 2.5 years, with a cumulative increase of 175 basis points.

With another two hikes likely this year and more to follow next year, we can expect these hikes to start taking their toll — eventually.

But context is important, as these hikes are rather measured compared with prior economic cycles. In the last expansion, for example, the Fed raised rates 17 times in the two years from mid-2004 through mid-2006, with a cumulative increase of 425 basis points. But even then, the economy still ran hot for another two years into 2008 as the impacts of rate hikes take time to work through the system.

So the recent rate hikes will have limited immediate impact on the economy and property markets. But expect the economy to start cooling next year as higher interest rates begin to slow corporate borrowing and consumer spending — just as the fiscal stimulus from the federal tax cuts and spending hikes begin to fade.

JLL Chief Economist Ryan Severino

What was your reaction to this boost in rates?

Completely as I expected. Not remotely a surprise.

Some economists predict the Fed will boost rates four times this year. How will these moves impact CRE lending activity and access to capital, if at all?

If we get two more hikes of 25 basis points this year, we will get closer to the point where interest rate increases have a more prominent impact on CRE and the economy. Individual rate hikes do not mean much, but the cumulative impact over time will.

What does this move signal about the state of the U.S. economy and its continued recovery?

The economy is performing well, especially relative to potential. Fiscal stimulus should have a robust positive impact over the next couple of quarters.

Where does the 10-year Treasury stand now in relation to the long-term average, and what does this rate hike signal for the industry moving forward?

Most of the upward movement in the 10-year had probably happened already unless the Fed raises their long-run target rate. I’d expect more movement upward at the short-end than the long-end, causing the yield curve to flatten further. That typically happens during tightening cycles.

Any parting thoughts?

For now, the interest rate environment remains positive for the economy and CRE, but as rate increases continue, they will eventually slow the economy and have an impact on the market.


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Construction Financing: “When To Go To Market”

Ari Hirt and Steve Buchwald of the Debt & Equity Finance Desk discuss “When To Go To Market,” a new video detailing the complexities of Construction Lending.

Highlights from When To Go To Market

  • When to approach lenders for construction financing?
  • Ideal time to approach lenders is three to six months.
  • Conditions to close: building permits, construction drawings, and buyout of major sub-contractors.
  • Risks of going out too early: lender deal fatigue, market change, and budget increases.
  • More construction financing in 2018 than 2017.

Mission Capital Structures a $23-Million JV Equity Investment for Largo’s Acquisition of Williamsburg Development Site

 

Buyer plans to develop a 105,000 square foot mixed-use property with luxury condos, office, retail and an automated parking garage

NEW YORK — Largo and Mission Capital Advisors announced that Mission Capital’s Debt and Equity Finance Group has structured a joint venture between Largo and First Atlantic Real Estate for the $25-million acquisition of 215 North 10th Street, an 18,000-square-foot corner development site in the North Williamsburg section of Brooklyn, New York. This North Williamsburg deal is the first investment that First Atlantic and Largo have partnered on and Largo’s ninth deal in Williamsburg. The Mission Capital team of Jordan Ray, Ari Hirt, Steven Buchwald and Jamie Matheny worked on structuring First Atlantic’s $23-million equity investment and has also been engaged to arrange the construction financing.

The JV has also purchased inclusionary air rights allowing for the development of a 105,000-square-foot, seven-story mixed-use property with approximately 31 luxury condominiums, 45,000 square feet of office, 7,000 square feet of retail and 85 parking spaces. Construction is expected to begin in the second quarter of this year.

“Largo is one of the most active developers in New York right now and really earned their stripes in Williamsburg early in this cycle, with this project being their ninth in the neighborhood. They know what product the market needs and can execute.” said Ray. “Raising JV equity for ground-up construction right now is challenging, but we are intimately familiar with the demand in the local market and were able to demonstrate that to First Atlantic. There really aren’t very many options for growing families to expand in north Brooklyn right now. There is a whole market of buyers who have lived locally and don’t want to leave the neighborhood because units that suit their needs don’t exist. Not only do they want to live in Williamsburg, but they want to work there as well, which has created a big demand for quality office space. Largo and First Atlantic saw a need and will fill it.”

 

About Largo

Largo is a private real estate development and investment firm founded by Nissim Ben-Nun and Nicholas Werner. Largo specializes in the acquisition, development, and operation of luxury multifamily and mixed-use real estate in New York City, and is currently heavily active in the Manhattan and Brooklyn markets.

Since its founding in 2009, Largo has successfully developed over 1.4 million square feet of luxury rental apartments, condominiums and mixed-use properties.

In addition, Largo provides construction management services for many of its projects through its construction management operation Largo Construction.

 

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 City, Florida, Texas, California, and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across debt, mezzanine, and JV equity placement; commercial and residential loan sales; and loan portfolio due diligence and valuation. Mission Capital Advisors is extremely active in arranging financing for office, industrial, multifamily, retail and self-storage properties across the country. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of financing and loan sale 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.missioncap.com.