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

After improving each month during the second half of 2017, the Trepp CMBS Delinquency Rate continued that trend to start 2018. The delinquency reading fell six basis points to 4.83% in January, marking the seventh straight month in which the rate has decreased. The rate has consistently dropped in recent months thanks to most of the bubble-year loans from 2006 and 2007 meeting resolution after maturity.

“Though it may be a new year,” said Manus Clancy, Senior Managing Director at Trepp, “January’s delinquency rate went in the same direction as it did in the previous six months. Fewer loans from the bubble years – mainly 2006 and 2007 – are defaulting, and those that did default are being resolved at a healthy pace. Further rate drops can be anticipated as the first half of 2018 progresses.” 

Delinquency readings for three of the five major property types decreased last month. January’s largest drop belonged to the office sector as its rate plunged 56 basis points to 5.84%. The multifamily delinquency rate – already the lowest among major property sectors – fell another 28 basis points to 2.08% last month. The largest increase of the month was noticed in the lodging sector, as hotel delinquencies increased 69 basis points to 4.51%.

Nearly $1.35 billion in CMBS loans turned newly delinquent in January, a substantial increase from the roughly $800 million that became delinquent in December. The volume of loans cured last month only totaled $290 million, while the volume of previously delinquent CMBS debt that was resolved with a loss or at par came in at $800 million. Although there were more new delinquencies in January than loans that were cured and resolved, a large swath of newly issued loans were added to the calculation and accounted for the difference.

For additional details, such as delinquency status and historical comparisons, download the January 2018 US CMBS Delinquency Report at Trepp.com

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SALT LAKE CITY, UT – Global real estate investment company Kennedy Wilson has bought two wholly owned multifamily properties off market in Salt Lake City, Utah: Santa Fe Apartments, a 492-unit community in Cottonwood Heights for $79.5 million; and Creekview Apartments, an 88-unit community in Midvale for $13.0 million. The properties join KW’s multifamily portfolio focused on institutional quality garden-style apartment communities located near rapidly growing markets in the western United States.

KW invested $21.5 million of equity, including closing costs, in Santa Fe and secured a 10-year fixed-rate loan of $59.1 million at 3.9%. KW invested $4.8 million of equity, including closing costs, and secured an $8.6 million interest-only loan at L+1.6% for Creekview. The equity investments for both acquisitions use proceeds generated through a reverse 1031 exchange.

“With its dynamic economic climate, well-run state government and highly educated workforce, Salt Lake City consistently emerges as a compelling market for real estate investment,” said Shem Streeter, Managing Director at KW. “We continue to see strong interest from millennials and many other groups of renters in easily accessible suburban locations based on relative affordability and proximity to both high paying employers and outdoor recreation.”

Located just one mile apart, Santa Fe and Creekview both benefit from immediate access to the I-215 freeway, proximity to high-end grocers Whole Foods and Trader Joe’s, and simple access to neighboring retail centers with tenants including Walmart, Target and Bed, Bath & Beyond. Salt Lake City is widely considered the capital of industrial banking in the United States, home to prominent companies including Morgan Stanley, Goldman Sachs, Ally Bank and Target Bank. The region is also a part of the growing technology community referred to as “Silicon Slopes,” a combination of information technology, software development, hardware manufacturing and research firms.

Positioned on nearly 23 acres, Santa Fe offers both market rate and affordable units within one and two-bedroom layouts at an average 790 square feet. Creekview’s entirely market-rate offerings include both one and two-bedroom layouts at an average 850 square feet. Beginning immediately, KW plans to initiate its value-add asset management plot, including investing $5.3 million across both properties in interior unit renovations, upgrades to the fitness center, sport court, leasing center and other common area enhancements.

Santa Fe and Creekview add to KW’s growing multifamily presence in the Salt Lake City area, which now totals 1,396 multifamily units with a trailing 12-months NOI of $14 million, including Foothill Place and the Sandpiper Apartments.

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PLAINSBORO, NJ – Carmel Partners, a leading real estate investment manager and multifamily specialist, announced it has bought Hunters Glen, an 896-unit garden apartment complex, well-located in the community of Plainsboro, New Jersey. The acquisition represents Carmel’s first investment in New Jersey and a continuation of its East Coast expansion. Terms of the transaction were not told.

Hunters Glen, built in 1978, is a multifamily residential apartment property located at 1109 Hunters Glen Drive. The complex, situated in a park-like setting with mature trees, consists of 61 two-tale wood frame buildings covering a 52.7-acre site in Plainsboro Township. The property offers a mix of well-sized one-bedroom, two-bedroom/one-bath and two-bedroom/two-bath units. It is located three miles from Route 1, the main employment corridor within the area, five miles from Princeton University, and within a few miles of a major medical center. Plainsboro, in central New Jersey, is equidistant from both New York City and Philadelphia.

Carmel plans to reposition the property, updating interiors, renovating the exterior and improving amenities, which include three resort-style pools, recently installed grills, and access to adjacent public ball fields and courts, playgrounds, walking trails and a golf course.

Trey Hilberg, Senior Vice President and Head of Investments for Carmel Partners, said, “We are excited to make Hunters Glen our debut investment in New Jersey. We were able to buy a well-built property in a supply-constrained area at a discount to replacement cost, and we can now proceed to add value through renovations, upgrades, marketing and an experienced property management team. We look forward to making Hunters Glen the residence of choice for people attracted to this vibrant community.”

The property was marketed by HFF. The HFF investment advisory team representing the seller included senior managing director Jose Cruz, managing director Kevin O’Hearn and senior directors Michael Oliver and Stephen Simonelli.

“Hunters Glen provides wonderful upside through unit renovations and upgrading of the amenities. That, combined with a lack of significant future development in the submarket and access to the major highways, made this investment very attractive to investors,” stated Mr. Cruz.

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