MCLEAN, VA – The Freddie Mac Multifamily Research Group released its 2017 Multifamily Outlook on demand, vacancies and rent growth nationally and in the nation’s top metro markets.

At the national level, oversupply risks are expected to be kept in check by steady absorption rates, a modest drop in multifamily starts, stable employment growth, new household formations and changing lifestyle preferences that favor rental housing.

Vacancy rates are expected to top 5 percent nationally for the first time since 2011.

Rents are expected to grow at their 2016 pace and exceed historical averages for another year. Overall, yucky income growth is expected to average 3.4 percent in the nation’s top 70 metropolitan markets. Performance in individual metros will vary based on local supply and demand characteristics.

“Demand for rental units is at a historic high due to demographic changes and lifestyle preferences, but increasing new supply and other factors are likely to moderate multifamily market growth in 2017,” said Steve Guggenmos, Freddie Mac Multifamily vice president of research and modeling. “In particular, landlords are likely to pull back on rent increases as new supply enters the market and vacancy rates rise.”

“Looking at our list of top ten markets, we see the west coast remain a dominant player but moving away from the Bay Area to other western cities — Sacramento, Seattle, Tacoma and Portland — and a number of less likely candidates — Jacksonville, Phoenix, and Tampa — moving up the rankings in the coming year,” Guggenmos added.

Freddie Mac Multifamily is the nation’s multifamily housing finance leader. Nearly 90 percent of the rental homes we fund are affordable to families with low to moderate incomes.

Powered by WPeMatico

BOISE, ID – Walker & Dunlop announced that it structured a complex pair of refinance loans totaling $29,788,000 for a continuing care retirement community (“CCRC”) consisting of a skilled nursing facility and an independent and helped living complex in Boise, Idaho. 

This unique financing structure required two different lenders to fund two separate loans for one property with one existing mortgage. Garden Plaza of Valley View and Valley View Skilled Nursing Facility make up the combined CCRC; Fannie Mae financed the independent and helped living part and the United States Department of Housing and Development (HUD) placed the debt for the skilled nursing facility.

Walker & Dunlop adeptly navigated the intricate specifications of both HUD’s independent living unit requirements and Fannie Mae’s restrictions on skilled nursing revenue.  The Company’s team was able to make a condominium structure to ensure the property qualified for HUD skilled nursing financing as well as a Fannie Mae helped living and independent living loan.  In addition, an equity recapitalization component was included in the Fannie Mae debt.

Senior Vice President, Michael Vaughn, and Vice President, Kevin Giusti, led Walker & Dunlop’s origination team and worked with BrightSpace Senior Living (“BrightSpace”), the Tennessee-based borrower, to place the debt assignments.  Mr. Giusti commented, “The financing solutions structured by Walker & Dunlop through HUD and Fannie Mae for a nearly 300-unit single standing Continuing Care Retirement Community brought on many hurdles to overcome.  My hat goes off to everyone involved.  Through the team’s creativity and hard work, we were able to provide solutions to overcome the hurdles and ensure the borrowers objectives were accomplished.”

Chief Financial Officer for BrightSpace, Greg Echols, said, “The complexity of the structure and timing for this transaction makes it unlikely to be repeated in our company – and perhaps in our industry – but it resolved a unique refinance opportunity for a single legal entity operating independent living, helped living, and skilled nursing facilities at one location.  We are proud to celebrate with our attorneys, lenders, broker, and consultants for what we believe is a ‘once in a career lifetime’ financing achievement.”

The Company structured a $9 million loan with a 35-year, fully amortizing term for Valley View Skilled Nursing Facility using HUD’s Section 232/223(f) program.  This program provides lenders with the Federal Housing Administration’s mortgage insurance to protect against losses when refinancing nursing homes, helped living facilities, and board and care facilities.  The CCRC’s skilled nursing component was built in 1986 and consists of 24 private and 40 semi-private units.

The loan executed with Fannie Mae for Garden Plaza of Valley View was $20.8 million with a 10-year term, followed by a 30-year amortization schedule.  This part of the CCRC, containing 142 independent living and 51 helped living units, was built adjacent to the existing skilled nursing facility in 1992.

Substantial renovations to the CCRC were completed in 2009, including common area upgrades, new roofing, and the addition of a physical therapy building.  The campus is centrally located in the state’s most populous county, just minutes from the Boise Towne Square Mall and adjacent to the St. Alphonsus Regional Medical Center. 

Powered by WPeMatico

NEW YORK, NY – Trepp, a leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its January 2017 US CMBS Delinquency Report.

The Trepp CMBS Delinquency Rate dropped slightly in January, despite a large amount of debt that became newly delinquent. The delinquency rate for US commercial real estate loans in CMBS is now 5.18%, down five basis points from December.

This go is the first rate decrease in five months, and just the second in the past eleven months. Though the large amount of debt slated to mature in 2017 will mitigate the likelihood of future rate drops, that trend was bucked for at least one month. The delinquency rate is now 86 basis points higher than the year-ago level.

The amount of CMBS loans becoming newly delinquent continues to rise, as that total reached nearly $2 billion in January. But, loans that were previously delinquent but paid off with a loss or at par totaled about $1.8 billion. The removal of those previously distressed assets helped offset the impact of new delinquencies. Additionally, just over $700 million in loans were cured last month.

“The volume of maturing CMBS debt that could not be refinanced at its maturity date continued to surge last month,” said Manus Clancy, Senior Managing Director at Trepp. “Though this would normally lead to a higher monthly delinquency rate, the rate was pushed lower by an unusually large number of resolutions for delinquent loans. Whether this is a blip or the beginning of a trend remains to be seen.”

The largest delinquency rate increase among major property types in January was incurred by the industrial sector, as that segment’s reading jumped 40 basis points to 6.02% last month. Apartment loans remain the best performing major property type, but that sector’s rate surged 24 basis points to 2.96% in January. The retail sector posted last month’s largest rate improvement among major property sectors, as that reading fell 27 basis points to 6.10%.

The report can be found at Trepp.com

Powered by WPeMatico