The city’s affordable housing finance unit is planning for the first time to issue bonds that will be packaged as commercial mortgage backed securities. This inaugural group of loans pegged at $550 million will be secured by the market-rate residential high-rise 8 Spruce Street, known as New York by Gehry, located in Lower Manhattan.
The Housing Development Corporation, which generally focuses on financing affordable housing for the city, will issue the bonds, which will then be packaged and divided into different risk levels and sold into the CMBS market. Wells Fargo will be the loan servicer.
Sources within the city agency said there were special circumstances that made the CMBS structure useful here, and it was not expected to become a common practice. This bond deal is similar to two the state’s New York Liberty Development Corporation structured to finance 1 Bryant Park and 7 World Trade Center, but this is the first for the city.
Nonetheless, insiders said it showed an inventive use of market tools.
“It demonstrates HDC’s willingness to get creative on structuring in order to diversify how HDC-financed projects are capitalized,” Ben Thypin, director of market analysis with data firm Real Capital Analytics, said.
Fresh off the acquisition of a 45 percent stake in Boston Properties’ 601 Lexington Avenue, the sovereign fund that manages Norway’s substantial oil wealth is making a play for Blackstone Group’s 1095 Sixth Avenue, according to a source familiar with the talks. A deal for the tower, expected to fetch up to $2.25 billion, would be the biggest office tower sale in New York since the GM Building traded hands in 2008.
Norges Bank Investment Management is gunning to buy the 42-story, 1.2 million-square-foot tower, which is located between 41st and 42nd streets and overlooks Bryant Park, a source with knowledge of its moves told The Real Deal. It’s also interested in buying into two Boston Properties’ assets in Boston: a 37-story office tower at 100 Federal Street and a 31-story office tower in the Atlantic Wharf complex.
The $5.6 trillion fund, which is associated with nearly $14 billion in total property acquisitions over the last decade, was given a mandate in 2010 to invest up to 5 percent of its assets in real estate outside Norway, according to Real Capital Analytics.
Blackstone acquired 1095 Sixth in 2007, as part of its $39 billion purchase of Sam Zell’s Equity Office Properties Trust. The building, which is 99 percent leased, is anchored by insurance giant MetLife, and Verizon Communications recently reestablished its headquarters there. Whole Foods is also taking about 32,000 square feet at the building.
Besides its investment in 601 Lexington, Norges’ recent Manhattan investments include a $684 million stake in Boston Properties’ 7 Times Square and an investment in 470 Park Avenue South, Real Capital data show. If Norges manages to acquire the tower, the move would be in line with some of these recent deals, according to Ben Thypin, Real Capital’s director of market analysis.
Read More: http://therealdeal.com/blog/2014/09/17/norwegian-fund-pushing-to-buy-blackstones-2-2b-1095-sixth-source/#sthash.ydRuXLEk.dpuf
It’s been a good year so far for the real estate business in Queens. In fact, the borough is on track to break a record in 2014, according to Adrian Mercado, Massey Knakal’s head of research. “Queens is on pace for $3 billion of sales activity,” Mercado said, which would be the borough’s biggest dollar amount ever. The previous record was set in 2006, when transactions topped $2.6 billion. In 2013, the total dollar amount traded in the borough was $2.4 billion. Ben Thypin, director of market analysis at Real Capital Analytics, which provided the information for the attached map of the top 15 largest transactions, said that the “seemingly unstoppable run-up in pricing in Manhattan and Brooklyn” is fueling investment activity in the borough. -
Read More: http://therealdeal.com/blog/2014/09/04/the-top-15-commercial-sales-in-queens-this-year/#sthash.I7bF4GeG.dpuf
The investment-banking giant Eastdil Secured and the financial brokerage firm Meridian Capital Group were the two most active intermediaries in the origination of loans of $100 million or more in New York City last year, an exclusive analysis by The Real Deal found.
. . .
Unlike property brokerage that is very closely tracked and larger deals are regularly publicly reported in articles or through databases like Real Capital Analytics and CoStar Group, loan brokerage remains largely unreported.
It was not clear why mortgage brokers publicize their deals less frequently than sales brokers. Insiders proposed several theories.
Ben Thypin, director of market analysis at Real Capital Analytics, said it may be caused by the fundamentally different relationship between a seller, a sales broker and a buyer, and between a borrower, a mortgage broker and a lender.
In a sales transaction there is typically a limited pool of potential buyers, but in a mortgage transaction, there are generally many potential lenders. In addition, a mortgage brokerage might do dozens of deals in a single year with a lender for one reason or another, and it is not beneficial for either the broker or the lender to publicize that relationship; therefore leaving it open to competition from others, Thypin said.
Read More: http://therealdeal.com/blog/2014/03/14/eastdil-meridian-top-list-of-large-loan-brokerages/
With commercial market data now more readily available than ever, a broker can no longer bank on being the first person (or the only person) with information. Enter the era of the market report.
“Information used to be one of a broker’s main tools,” said Peter Von Der Ahe, a vice president with Marcus & Millichap. “Now part of the service a broker provides” is deciphering the onslaught of data.
Along those lines, in the past two years, commercial brokerages — including Colliers International, Avison Young, Massey Knakal and Cassidy Turley — have all begun hosting quarterly breakfasts to tout their data.
. . .
What’s more, despite all of these new reports, there are still major holes when it comes to key data points.
For example, “a report that needs to exist is an industrial report for the outer boroughs,” said Ben Thypin, director of market analysis at Real Capital Analytics. However, the dominant industrial firms often sell buildings through word of mouth and may not need the publicity a report provides, he said.
Read More: http://therealdeal.com/issues_articles/the-market-report-era/
New York’s real estate professionals are generally an optimistic crowd, but when you ask them about buying loans or properties controlled by special servicers, they turn cool.
In fact, a handful of Manhattan investment sales brokers and company principals say they have given up hunting for opportunities involving special servicers for their clients. Some say their impression is that special servicers rarely sell and, therefore, are not worth approaching.
Others gripe that buying loans from these servicers is so difficult that it’s not worth the trouble.
“What is clear to me is that there are two huge trends among the servicers,” said Ben Thypin, director of market analysis at RCA. “First, they are extremely averse to foreclosure and taking possession of collateral. The second big trend is that servicers are much more likely to liquidate a troubled loan than restructure it.”
Thypin said that if these trends continue, “The most likely outcome for the 75 assets still in trouble are likely to be a short sale, note sale or sale and loan assumption.”
Read More: http://therealdeal.com/issues_articles/an-insiders-game/
After years of financial turmoil at Savoy Park, an 1,800-unit Harlem apartment complex, Vantage Properties and Area Property Partners finally unloaded the troubled development for more than $210 million last month.
The sale allows the two firms to pay off the outstanding balance on the senior mortgage that’s been looming over them for years.
While Vantage and Area are still fighting foreclosure suits on several properties in New York City, the mega-sale came just three weeks after the partnership managed to sell off a portfolio of eight distressed Harlem and Washington Heights buildings for $65 million, far less than the original purchase price of $87.7 million.
Analysts say the sale of Savoy Park to the New York Affordable Housing Preservation fund — created by Citigroup and L+M Development — is likely to help Vantage CEO Neil Rubler overcome his firm’s considerable struggles and reposition the company in a market where multifamily properties are showing strong investor interest.
“In general, people in this industry have very short memories,” said Ben Thypin, director of market analysis at research firm Real Capital Analytics.
Read More: http://therealdeal.com/issues_articles/a-new-vantage-point/
SL Green, the largest commercial office landlord in New York City, said it agreed to buy 304 Park Avenue South for $135 million, or $628 a square foot, from a partnership led by David Berley, chairman of Walter & Samuels Inc.
SL Green said the 215,000 square foot office and retail complex, located on the corner of 23rd Street across from the landlord’s One Madison Avenue tower, will be acquired with 50 percent cash and 50 percent “operating partnership units.”
IMG Models, the world’s largest modeling agency, is the lead tenant, occupying 95 percent of the building, while the retail space is occupied by H&R Block, Time Warner Entertainment and Bed & Body Works.
Andrew Mathias, president of SL Green, said that the company has been monitoring the Midtown South submarket carefully for deals, but noted that the tightening vacancy rates and substantial leasing activity in the area have generally driven cap rates “below our target investment thresholds,” in the announcement released Thursday.
“The transaction reinforces what everybody knows, Midtown South is the hottest market in the country,” said Ben Thypin, director of market analysis from Real Capital Analytics. “By being able to offer the seller a tax-efficient transaction, SL Green was able to source an off-market deal that met their investment criteria, which is rarity in a market as hot [as this].”
Read More: http://therealdeal.com/blog/2012/05/31/sl-green-grabs-midtown-south-office-building-for-135m/
The deal represents the latest in a series of acquisitions over the past two years, as the New York hotel market continues to recover from the crash.
Ben Thypin, director of market analysis at Real Capital Analytics, said he expects to see additional interest from investors.
“There’s only so many high-end hotels [like Park Central] near Central Park out there,” Thypin said. “Hotels like this are going to continue to see a lot of interest both from investors and travelers.”
Read More: http://therealdeal.com/blog/2012/01/03/park-central-hotel-sells-for-396-2m/
Prediction: “In 2011, we expect hotel deal volume to increase by 90 to 130 percent over last year’s levels… the increase in transaction volume [is due to] the dramatic recovery in revenue per available room, or revpar, continued improvement in the debt markets, investors’ intention to sell assets before the 2007-2012 loan terms expire, and currency movements.”
Soothsayer: Arthur Adler, CEO-Americas for Jones Lang LaSalle Hotels.
Verdict: Thumbs sideways, but pointing slightly up. Hotels traded at an even quicker pace than Adler anticipated, according to Real Capital Analytics’ Ben Carlos Thypin. “[Real Capital] tracked over $3 billion in hotel deal volume in Manhattan in 2011 and the finalized total may be higher. While JLL’s prediction ended up being a little conservative, their rationale for predicting such a dramatic increase was right on the money,” Thypin told The Real Deal.
Read More: http://therealdeal.com/blog/2012/01/03/who-got-it-right-and-who-got-it-wrong-in-predicting-the-2011-market/
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.