News
BREAKING NEWS FROM THE SCHMOOZE
August 29, 2011
| Mingling with the movers and shakers at our Bisnow Capital Markets Summit on Wednesday, Hartman Income REIT EVP Dave Wheeler told us exclusively that the REIT has just firmed up its purchase (for an undisclosed amount) of the 101k SF Prestonwood Park Shopping Center, with plans to close on Sept. 16. | |
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| Dave, right with Avison Young Capital Markets Group principal Darrell Betts of Houston, says the property at 6505 West Park Blvd in Plano is about 68% occupied. Colleague Julian Kwok repped Hartman with Dave; CBRE's Chris Cozby and Chris Gerard repped the seller, Regency Centers. Dave and Darrell have history, as Darrell repped the seller in the Hartman purchase of the 88k SF 601 Sawyer in Houston earlier this year. Darrell also tells us that Avison Young opened a Dallas office with Brock Wilson (formerly of Grubb & Ellis) heading it up. | |
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| Goldman Sachs Commercial Mortgage CEO Roddy O'Neal says he continues to see volatility in the lending market with some spreads blowing out 100 bps. He says the CMBS world operates on a risk tolerance basis and the next 30 days will tell a lot. He anticipates about $4B to $5B in deals hitting the market in September. ?We'll see where the risk tolerance is for the people who buy our bonds…as our spreads got tighter and tighter, we never got to a place where we felt like we were competing with life companies,? he says. His advice to borrowers: be prepared to deal with some volatility. GSCM trades in the secondary market every day and can get you through that mine field, but be prepared to move as quickly as possible to shorten the closing time to minimize exposure to the market. (And pack SPF 85 Market sunscreen if it gets especially hot.) | |
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| Winstead shareholder Chris Nixon, who moderated the panel, says he has a glass half-full outlook on the CRE market despite the CMBS volatility that he sees impacting deals. He's seen buyers back out of deals because of the spread and ultimate interest rate differences from what they originally expected. Roddy says GSCM doesn't offer early rate locks because he doesn't want to put clients in that risk position right now. However, if a client chooses to take that risk, they will consider it, but strongly advise against it. | |
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| On the other hand, MetLife Real Estate Investments director John Hall says the life companies like to rate-lock. A month ago, CMBS was making some inroads into competing, but it's falling away with the uncertain economy, he says. The life companies are able to be selective, too. CRE lending offers a great return on the spread rather than other asset classes, so within the realm of investments, CRE lending is at the top, he says. MetLife did $8.3B last year with deals around $20M to $30M as a minimum on up to $375M. The faves:dominant retail centers, selective hotels, industrial, core office, and multifamily (when it can be scored). | |
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| Prudential Mortgage Capital Co managing director Paul Geyer also encourages locking rates. For one, there's going to be increased volatility because of Freddie Mac and Fannie Mae regarding what they're going to do with single-family loans and how it will impact multifamily, he says. Additionally, banks won't lend in the non-recourse arena; it has to be a new product or CMBS will take up the slack. For Prudential, Paul says about 80% of the loans made year-to-date were mostly grocery-anchored retail, industrial, and multifamily, with about 65% leverage on core office with little leasing risk over the next few years. | |
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| Walker & Dunlop SVP Vic Clark says there's been a ?little adjustment? in the last three weeks, but CMBS is still very healthy. Rates are going down and he's still quoting deals somewhere between 70% to 80% on most classes of multifamily. ?If you can borrow five to seven years with fixed-rate non-recourse 30-year money in the threes; I think you rate-lock that deal,? he says. Another word of caution: at some point not too far away, interest rates are going to skyrocket. When it happens, it will happen very fast, he says. | |
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| Salt River Capital's Holland Gary, Jacobs? David Aughinbaugh, and Fischer & Co's Chris Landers, who does both tenant rep and investment sales projects. Chris teases that there's exciting new business announcements coming in the next few weeks. David tells us he's working on some engineering projects with Hillwood at Alliance as well as a lot of residential with Pulte and Centex. | |
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| Cassidy Turley's Robert Powell, here with Highland Builder?s Kathy Boop, tells us that the firm just added five hot shot brokers last Monday from Cushman & Wakefield. Kathy says Highland is bidding on lots of projects and is in the midst of numerous tenant interiors and office finish-outs. | |
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| We snapped Beck?s Mike Webster, Peloton?s Jeff Wood, and Winstead?s Tobin Swope. Jeff tells us he's busily leasing up Tower 2600 for Champion Partners' Jeff Swopes (aka, Tobin?s dad—and a recent Bisnow event speaker). | |
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| City of Colleyville economic development director Marty Wieder, here with Bob Moore Construction director of biz development Jay Hedges, says several new businesses have found a home in the city including the new wood-fired Bistro & Vino Bar, which is being constructed with help from the city's new matching grant program. |
