NEW YORK, NY – Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its February 2018 US CMBS Delinquency Report.

The Trepp CMBS Delinquency Rate dropped again in February, marking the eighth consecutive month in which the rate has improved. The delinquency reading for US commercial real estate loans in CMBS fell 32 basis points to 4.51% last month. The delinquency rate has decreased by 124 basis points in the eight months since June 2017, and is now just 36 basis points higher than the post-crisis low observed in February 2016.

“As we predicted over the summer, the delinquency rate has receded nicely over the last eight months,” said Trepp Senior Managing Director, Manus Clancy. “This is a function of CRE lenders and borrowers having resolved loans from the Wall of Maturities at a quicker clip than anyone would have expected five years ago. While higher interest rates and volatility could make the path a small bumpy at times, we believe more drops in the delinquency rate are coming.” 

Just less than $600 million in CMBS loans became delinquent in February, which place 13 basis points of pressure on the reading. More than $800 million in debt was cured last month, while the volume of previously delinquent CMBS debt that was resolved with a loss or at par clocked in at $700 million. Those resolutions reduced the February delinquency rate by 20 and 17 basis points, respectively.

Delinquency rates for all but one of the five major property types fell last month, the largest of which came from the lodging sector. Hotel delinquencies sunk 128 basis points to 3.23% in February. The office delinquency reading dipped 38 basis points to 5.46% last month. The only rate increase was observed in the multifamily sector, as that reading climbed 32 basis points to 2.40%. Even with the higher delinquency reading, the apartment segment is still the best performing major property type.

For additional details, such as historical comparisons and analysis, download the US CMBS Delinquency Report.

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ORLANDO, FL – TruAmerica Multifamily has expanded its rapidly growing Florida apartment portfolio with the off-market acquisition of the 368-unit Astor Park in Winter Springs, FL for $50 million.

Astor Park is the seventh investment in Florida for TruAmerica since entering the market nine months ago.  TruAmerica’s Florida portfolio now totals more than 2,600 units, making the Sunshine State the third largest investment market for TruAmerica, one of the largest apartment owners in the United States with 33,000 units under management.

“Robust multifamily fundamentals in Florida, especially in the greater Orlando metro where we have five assets, are very strong and job growth continues to lead the country,” said TruAmerica Managing Director Matthew Ferrari who heads the firm’s East Coast office.   “While we will continue to build upon on our portfolio here, we are seeing similar demand drivers in select southeast markets in Georgia and the Carolinas where we are pursuing other value add opportunities.”

Located at 4545 Willa Creek Drive, Astor Park was built over two phases between 1987 and 1999.  The property features a mix of one-, two- and three-bedroom units, the majority remaining in their classic condition making a right value add opportunity for TruAmerica, according to Ferrari.

TruAmerica will immediately start a $4 million capital improvement program to upgrade the property exterior, common areas and unit interiors.   Plotted upgrades to the interiors include new stainless appliances, stone countertops, new cabinet faces, upgraded lighting and plumbing fixtures, vinyl plank flooring, and tile backsplashes.   Exterior and common area improvements will include all new landscaping throughout, exterior paint, fitness center upgrades, and pool furnishings.

“Our cost basis, combined with our ability to take advantage of scale in the market, will allow us to make a more luxurious living environment on par with the competitive set, and still keep rents affordable for working families,” added Ferrari.

TruAmerica Multifamily is a vertically-integrated, value-add multifamily investment firm based in Los Angeles. Founded in July 2013 as a joint venture between Robert Hart and The Guardian Life Insurance Company of America, TruAmerica manages a $7.0 billion portfolio of approximately 33,000 units across prime locations.

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NEW YORK, NY – In its latest business venture, BEB Capital has bought a 29-unit multifamily building at 238 East 106th Street in the East Harlem section of Manhattan, says Lee Brodsky, CEO. The property was bought from 106th Street Realty Development Corp. for $14.25 million, with tax-deferred proceeds from BEB Capital’s recent sale of the Corinthian Parking Garage at 330 East 38th Street in Manhattan. 

BEB Capital, a privately-held real estate and investment firm based in Port Washington, New York, is refocusing its business plot on the East Harlem community and other New York City neighborhoods. The firm bought the Corinthian Garage for $10.275 million in 2009, sold it for $16 million last fall, and used Section 1031 of the IRS code to reinvest the gains in the East Harlem property. 

“The Corinthian sale was a pivotal event in our business strategy,” says Mr. Brodsky. “Making use of the 1031 rules enabled us to leverage our success at the Corinthian by building our presence in East Harlem, one of Manhattan’s most vibrant, up-and-coming neighborhoods. We are committed to using our entrepreneurial creativity to develop this emerging market. East Harlem is a fantastic place to invest, and the future extension of the Second Avenue subway line makes the area’s prospects even brighter.”

Mr. Brodsky notes that the company is in the plotting stages for a second East Harlem development.  

BEB Capital participates in nearly all facets of real estate, including the investment, development, operations, and management of commercial and residential properties in New York, particularly on Long Island and in Queens, and along the Eastern Seaboard. 

Mr. Brodsky says BEB Capital is putting new emphasis on institutional grade investments while diminishing the role of parking garages in its portfolio to instead focus on multifamily property. “Our company has grown dramatically in recent years, and having further honed our core competencies and intergenerational experience, we are now strategically developing critical mass in East Harlem’s multifamily inventory, building a core market there and helping the neighborhood achieve its very high potential,” adds the CEO. 

The newly bought property at 238 East 106th Street, conveniently situated between Second and Third avenues, was constructed in 2016. The 18,860 square-foot, eight-tale building consists of 29 free-market rentals and nine parking spaces. It offers a range of amenities, including a virtual doorman with video intercom and central laundry, and every unit features a terrace. 

Meridian Capital Group, one of the country’s most active brokerages represented the seller, buyer and obtained the financing for this transaction. Meridian Managing Director Abie Kassin and Vice President David Benharouch represented the seller and procured the buyer. Meridian Senior Associate Bryan Kallenberg and Managing Director Brian Flax negotiated $8.5 million in acquisition financing for the buy.

BEB Capital (previously BEB Real Estate), was officially launched in October of 2016 by the Brodsky family, known for its long history in real estate development, and headed by patriarch and serial entrepreneur, Bert E. Brodsky. Now serving as the entity overseeing all aspects of the family business, BEB Capital reflects not only the real estate business the Brodsky family has built over the past five decades, but also its financial investments in several other corporate sectors, including healthcare, technology, and hospitality.

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