Socal Multiunit Real Estate

THE GOVERNMENT HAS $72 BILLION FOR GREEN REAL ESTATE

By Jodi Summers

Experts have calculated that the Obama administration has put together more than 30 programs worth $72 billion that can be used to increase energy efficiency in commercial buildings and multifamily housing.

“The Obama Administration has tremendous, untapped opportunities to use legal tools already at its disposal to enhance the energy efficiency and sustainability of the nation’s multifamily and commercial buildings — all without seeking new funds or authority from Congress,” observes a report prepared by Van Ness Feldman. “All told, the programs identified in this report have the potential to directly provide or facilitate over $72 billion in funding or loan guarantees, and can leverage hundreds of billions of dollars in private investment through instruments such as mortgage insurance and regulation of the real estate lending market.”

Titled “Using Executive Authority to Achieve Greener Buildings: A Guide for Policymakers to Enhance Sustainability and Efficiency in Multifamily Housing and Commercial Buildings,” the legal analysis, suggests several ways the Obama administration can use existing programs to enhance building efficiency:

* Reforming appraisal and underwriting practices at Fannie Mae and Freddie Mac Greening federal banking regulations

* Promoting flexible FHA insurance products

* Integrating energy efficiency and sustainability criteria into competitive grants and funding formulas

* Strengthening minimum property standards for federal housing and economic development programs to reflect energy efficiency and sustainability standards

* Improving performance standards applicable to federal buildings and leases

* Refining guidance applicable to the energy efficient commercial buildings tax deduction and the national historic preservation tax credit

* Using SBA funding mechanisms to support small business energy efficiency investments

* Streamlining Title 17 loan guarantees to make them suitable for buildings

“As an early adopter of green buildings and the LEED green building certification system, the federal government has been a leader in bringing green buildings to cities and towns across America,” said Roger Platt, the USGBC’s senior vice president of Global Policy & Law declared. “This new report unveils an even larger opportunity for the Obama Administration to increase our nation’s energy efficiency, while creating thousands of jobs and saving taxpayers money.”

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http://www.usgbc.org/government

http://www.greenbiz.com/news/2010/04/30/obama-already-has-72b-tap-green-buildings-study-says

http://www.boulderindependentbusiness.org/wordpress/wp-content/uploads/2009/02/namaste_obama_0093.jpg

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COMMERCIAL REAL ESTATE LENDING SNAPSHOT

edited by Jodi Summers

Allow us to present a really interesting synopsis of current commercial loan trends from a variety of banks, from an article on CoStar.com. The information is from first quarter, but it gives an idea of the ebb and flow of the commercial loan marketplace. Banks are presented in alphabetical order…

* Citigroup — In March, new commercial real estate loan commitments increased more than tenfold to $1.4 billion, compared with $132.4 million in the previous month. Loan renewals increased to $112.1 million, from $25.8 million in February. Average total CRE loan and lease balances rose to $23.8 billion, up from $23.3 billion in February.

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* Comerica Inc. — Commercial real estate renewals increased in March from February 2010. The increase was concentrated in the Western states and Texas markets, partially offset by a decrease in the Florida market. Commercial real estate new commitments decreased.

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* Fifth Third Bancorp — Average CRE balances decreased by approximately 0.7% in March 2010 compared to February 2010. New CRE commitments originated in March 2010 were $288 million, compared to $102 million in February 2010. Renewal levels for existing accounts increased in March 2010 to $964 million versus February 2010 at $392 million. Payments and dispositions of troubled CRE outpaced the volume of renewals and new originations in March causing the overall balances to continue to decline. As commercial vacancy rates continue to increase, Fifth Third continues to monitor the CRE portfolios and continues to suspend lending on new non-owner occupied properties and on new homebuilder and developer projects in order to manage existing portfolio positions.

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* KeyCorp — There was no change in loan demand trends in the CRE segment during March. The CRE market outlook continues to be weak. KeyCorp continued to extend and modify existing credits given the lack of liquidity and refinancing options available in the CRE market. Renewal volume doubled from the February level to $560 million and is comparable to levels experienced in April and May 2009. Three-fourths of the renewal volume, totaling $420 million, was related to performing development projects for which refinancing options remain constrained. For CRE development projects, KeyCorp created a fixed-rate 3-5 year loan program to modify and extend qualifying loans for existing customers.

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* Marshall & Ilsley Corp. — Construction and development concentrations continued to decline in-line with its goal of reducing credit exposure in this sector. Average CRE balances are expected to continue contracting due to portfolio amortization.

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* Regions Financial Corp. — The focus in commercial real estate lending continued to be on renewing and restructuring real estate loans with existing clients versus active pursuit of new real estate loans. Renewal activity includes loan restructuring, remargining and repricing, based on the current credit quality of the sponsor, the performance of the project and the current market.

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* SunTrust Banks Inc. — Average Commercial Real Estate loans decreased $192 million, or 0.9%, compared to the February average. Total CRE renewals and originations in March increased $252 million, or 77.5%, compared to seasonally low February activity. The majority of originations were associated with large commercial or corporate businesses.

**

Thank you, http://www.costar.com/News/Article.aspx?id=359D8A406145159176A40807B924DC84

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NEW MULTIFAMILY REAL ESTATE LOANS TO EXCITE YOU

By Jodi Summers

Investors know, multifamily properties have been one of the most desirable real estate 

purchases throughout the downtown. GRMs are down, and properties now have an 

impressive amount of upside potential because of recent rent concessions. Problem

has been that the loan market being what it’s been has not made getting a loan easy.

Thankfully, that’s all starting to change.

A variety of multifamily small loan packages are coming to market. Globest.com 

suggests Chicago-based Aries Capital, through subsidiary Aries Multifamily; Alliant 

Capital in Anaheim, CA; and New York City-based Centerline Capital, through its 

agency lending group. All of these companies have opened small lending programs

during the past year. It is reported that the debt typically is up to $5 million, and is 

sometimes obtained through the agencies' small lending products. 

 Prudential Mortgage Capital Co. has a unique program that addresses debt for 

unstabilized properties. Known as the Agency Gateway program, it caters to 

apartment owners looking to refinance or buy assets that currently don't 

qualify for Fannie Mae or Freddie Mac financing. Apartment properties that 

would qualify include well-located, completed or renovated properties that have 

not yet reached stabilized occupancy levels. 

"The improving economy and upward growth in employment are positives for

Multifamily properties," observes Ted Hopkins, a PMCC principal and portfolio 

manager of Agency Gateway. "We feel it's time to get in there and help multifamily 

properties get stabilized." 

Ranging in size from $5 million to $25 million, the Agency Gateway loans run for 

terms of six to 24 months, until the property is stabilized. 

The deals are considered on a case-by-case basis and Hopkins not that the 

pricing is "very competitive. That is one factor that we rely on, plus the fact that

 we know multifamily product very well. Each loan is tailored to the individual property." 

**

http://www.globest.com/news/1659_1659/insider/184943-1.html

http://www.mortgageorb.com/e107_plugins/content/content_lt.php?content.5818

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State of the Commercial Loan Market

By Robert Schroell

The rough ride isn’t over the for the commercial loan market.

Community banks in particular will likely have a tough time in 2010. Hundreds of regional institutions have a significant chunk of their loan portfolios ― up to and exceeding a quarter in some places ― in commercial mortgages.

At the same time, commercial debt is coming due at a staggering rate. The market will need about $1 trillion to service more than $3 trillion in commercial mortgage debt, according to a recent forecast by Keefe, Bruyette & Woods, a well-known New York analyst.

That’s likely to make cash a disappearing commodity, primarily for the banking industry. In fact, experts at Keefe, Bruyette & Woods are urging banks to consider offering extensions to cash-strapped homeowners, many of whom have struggled to refinance their existing mortgages.

A significant slew of delinquencies in CMBS (commercial mortgage-backed securities) and bank loans is also expected to shape the course of 2010. It’s also almost difficult to imagine CMBS delinquencies getting any worse ― the rate skyrocketed an astounding 500 percent last year, jumping past 6 percent in December 2009 for the first time ever.

The governor of the Federal Reserve Board recently tried to rally optimism, noting that recovery should begin to take root as the year progresses. But those rosy projections didn’t include the commercial real estate market, which continues to flounder amid strained credit conditions and stagnant refinancing.

All in all, it’s a less than inspiring picture of what’s likely on the horizon.

“We estimate that the weighted average price decline for the commercial mortgage market is roughly 25%,” the experts at KBW state in their analysis. “This suggests that almost all the equity in the commercial sector has been wiped out.”

Fortunately… there’s pretty much no place else to go but up.

**

http://www.mortgageloanplace.com/commercial-mortgage.html

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GUEST POST - VA LOAN OPPORTUNITIES

GUEST POST - VA LOAN OPPORTUNITIES

by Jay Buerck

Veterans and their families in Southern California can take advantage of one of the country’s most affordable and flexible home loan programs. The Veterans Administration’s home loan program was created specifically for the needs of those who have served our country.

VA loans offer veterans an almost unmatched degree of flexibility. The VA guarantees loans from commercial institutions. That security gives lenders the ability to offer competitive rates and favorable loan terms for qualified borrowers.

VA loans come with myriad financial benefits. Borrowers can purchase a home without spending a penny on a down payment or monthly private mortgage insurance. The VA has loan limits that vary from state to state. Some borrowers can qualify for 100 percent financing. Currently, VA loan limits for San Diego County is $593,750. In Orange County, the loan limit is $737,500. USe a VA Loan Calculator to determine the loan limit for your home purchase.

The VA has multiple loan options. Veterans must first obtain a Certificate of Eligibility (COE) before moving forward with the application process. The COE ensures that a prospective borrower meets the program’s initial requirements.

Any military member who has served 181 days on active duty during peace time or 90 days during war time may be eligible, along with those who have served at least six years in the Reserves or National Guard. Spouses of service members killed in the line of duty may also be eligible.

Not everyone who meets the basic criteria will qualify for a loan. But veterans with poor credit can still qualify for a VA loan. So can those who have filed for bankruptcy or faced foreclosure.

Southern California veterans who currently have a conventional home loan can also benefit from a VA loan. Qualified borrowers can now refinance up to 100 percent of their home’s appraised value through a VA loan.

BE HAPPY! LOS ANGELES IS NOT ON THE LIST OF PLACES WHERE HOMEOWNERS HAVE THE MOST DEBT

By Jodi Summers

Sure, we’re all complaining about our decline in wealth, and the drop in real estate values. The bright side is if you’ve owned for any length of time, you’re still satisfied. In many parts of the Los Angeles area, real estate saw a 400% rise in a 10-year period – to have prices drop by a third is still 266% better than 12 years ago.

Other cities in California have a lot more to complain about, according to Forbes list of Where U.S. Homeowners are Most in Debt. Seven metro areas of the Forbes Top 10 made the list, including Modesto, Riverside, Yuba City, Merced, San Diego, Stockton and Vallejo.

In these cities, underwater mortgages–one on which more is owed than the home is worth–comprise an average 44% of outstanding mortgages, compared to the 29% nationwide average.

Modesto ranks as the worst city for homeowner debt. Household wealth has been reset to 2001 levels while housing prices have declined 57% since the peak in 2005, and 30% in the last year alone. This has dunked 81% of the last five years’ mortgages underwater.

Want to know more?

Check out the whole story @ http://www.forbes.com/2009/05/11/homes-equity-debt-lifestyle-real-estate-mortgage-underwater_slide_2.html?thisspeed=25000

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www.performermag.com/wcp.tourstop.0711.php

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REAL ESTATE DEVELOPERS IMPACT BY BERNIE MADOFF’S “PONZI SCHEME”

REAL ESTATE DEVELOPERS IMPACT BY BERNIE MADOFF’S “PONZI SCHEME”

by Jodi Summers

Several major East Coast Real Estate Developers have been named as victims in Bernard Madoff’s complex Ponzi scheme, which is rumored to have stripped investors of $50 billion in assets.

According to GlobeSt.com this list includes:

· Larry Silverstein, the World Trade Center developer;

· The Wilpons and Rechlers families;

· Brokers at Newmark Knight Frank and CB Richard Ellis–including Stephen Siegel, chairman of worldwide operations there,

· New Jersey developer Fred Daibes is rumored to have lost a significant amount of money;

· Mort Zuckerman, the chief executive of Boston Properties;

· Fred Wilpon, who owns the Mets and is head of Sterling Equities;

· Steven Simkin, a partner at the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison and chairman of the firm’s real estate department;

· A number of limited real estate partnerships in DC are also among the supposed victims.

· Other recognizable names on the list include John Malkovich, Sandy Koufax and Tim Teufel, - if these are the actor and baseball players, respectively, is unconfirmed, as is Larry King, the talk-show host, Frank Lautenberg, the Democratic senator from New Jersey, and Mark Green, a former public advocate of New York City.

Madoff was known to have focused on the rich and famous, sometimes requesting as much as a $20 million minimum.

A large number of the developers who invested with Madoff are reported to have pledged securities held by him for development projects. It has yet to be determined whether the actions of one person, will again impact bank lending criteria.

The complete client list of Madoff has been provided by the Wall Street Journal:

http://online.wsj.com/public/resources/documents/madoffclientlist020409.pdf

Info courtesy of:

http://www.globest.com/news/1341_1341/newyork/176748-1.html

https://ecf.nyeb.uscourts.gov/

http://designdepartment.wordpress.com/2006/09/07/

http://marketplace.publicradio.org/display/web/2006/10/27/down_in_debt/

http://www.observer.com/term/25509

http://gothamist.com/2007/09/07/revised_vision.php

http://blog.lib.umn.edu/mcgin017/blog/fall_2008/honors_intro_to_philosophy_fall_08/

2009 INVESTMENT PROPERTY SALES WILL BE BETTER THAN 2008

2009 INVESTMENT PROPERTY SALES WILL BE BETTER THAN 2008

Just as you might expect, property-investment sales are way down. The numbers are in for all of 2008 and sales fell 68% from the previous year’s volume. The decline was particularly steep in Q4.

The $54.5 billion of commercial property-transactions that closed or went under contract last year were down from $170.4 billion in 2007, while the number of transactions dropped 54% to 846, according to the Commercial Real Estate Direct Property Sales Database, which tracks individual property sales of at least $10 million.

The $7.28 billion worth of deals in the fourth quarter was down 70% from the $29.42 billion of deals during the same period in 2007. This year’s fourth-quarter volume also was down 46% from the previous quarter, which was down just 16% from the $16.3 billion in the second quarter.

Full-year sales volumes were down from 2007 in every property type, with sector declines ranging from a high of 83% for hotels - $3.8 billion - to a low of 60% for multifamily - $8.38 billion - which was helped largely by the availability of debt financing from Fannie Mae and Freddie Mac.

Pundits predict that 2009 sales volume will increase 15% due largely to offerings from distressed sellers, particularly those who used floating-rate debt for acquisitions in early 2007 and 2006.

A continued stalled economy that is expected to cut tenant demand across all property types. Robert Bach, Grubb + Ellis’ chief economist, has predicted that the U.S. economy will lose another 2 million jobs in 2009, about the same amount lost in 2008, and will “dampen demand for all product types, resulting in negative absorption and increased vacancy.”

Info courtesy of

http://www.loopnet.com/xnet/mainsite/news/news.aspx?DocID=5720&sourcecode=1lntd009

MORTGAGE INDUSTRY PROFIT STATISTICS

MORTGAGE INDUSTRY PROFIT STATISTICS

This info obviously takes a long time to calculate, which is why they give it to us so late in the year. But…when you find out, we bet you’ll be surprised to learn that mortgage companies lost an average of $560 on every loan they originated in 2007, compared with the $50 per loan they lost in 2006, continuing a downward trend that began in 2004, according to the Mortgage Bankers Association’s annual cost study.

While loan origination and ancillary fees grew on a per-loan basis, they did not keep pace with increases in production operating expenses, which grew 7 percent to $3,663 per loan, the study found.

MBA’s 2008 Cost Study is based on 2007 income and expenses associated with the origination and servicing of one- to four-unit residential mortgage loans by mortgage banking companies. The study is based on a sample of 180 mortgage banking companies who originate and service loans.

For the whole story please go to:

http://www.inman.com/news/2008/10/7/mortgage-industry-profits-tank-in-07

COMMERCIAL PROPERTY MARKET BELIEVED TO BE REACHING THE BOTTOM

COMMERCIAL�PROPERTY MARKET BELIEVED TO BE REACHING THE BOTTOM

Real Capital Analytics has calculated that July was one of the worst months for investment-property sales during the credit crisis. with year-to-date sales volume down 70% from the same period a year ago. At the end of June, volume was down just 62% from the year-ago period.

The office, industrial, multifamily and retail sectors all reported their lowest July volumes since 2002 and 2003 when real estate markets were rebounding from the last down cycle.
The New York research firm attributed much of the sales decline to wide gaps between bid and ask prices, noting. “The key unanswered question is whether sellers are ready to recognize changed market conditions and accept pricing that will bring investors back into the market.”
It further noted that the next few weeks should be particularly critical in determining this year’s final tallies because September is traditionally one of the strongest periods for new offerings. “If sellers unveil a new round of offerings, that could add to an already backlogged inventory,” Real Capital warned.