Blogs

  • BuildingsNY 2019: Discover the ultimate resources in property management 1 month ago

    SiteCompli is committed to providing you with superior tools and resources for more efficient and productive property management. We want to keep you informed about new tech innovations as well as any regulatory changes that may be occurring in the industry – and that’s exactly what we’ll be doing at BuildingsNY 2019.

    The 2019 NYC Violations & Building Operations Guide is back with crucial updates

    What’s new?

    • New requirements for 5-year gas piping systems inspections
    • The latest FDNY & HPD regulations now in effect
    • This year’s facade updates and more

    Tuesday, April 2 at 10AM

     SiteCompli experts will review the latest NYC agency changes and how to prevent outsized fines

    What you won’t want to miss:

    • How to save money and time in the face of new regulations
    • How to stay informed and prepare for new required inspections (including gas piping, bedbugs, construction requirements and more)

    Tuesday, April 2 at 2PM

    We’ll be running demos of our newest software suite, InCheck, built to automate routine compliance and increase your bottom line

    What you can do with InCheck:

    • Take action on issues immediately with Workflows deployed to your team based on situations such as violations, unexpected necessary maintenance, or government regulations
    • Monitor each step of your inspections to make it easy for your team to track and complete
    • Create or enhance your already established Standard Operation Process by scheduling automatic recurring Tasks and Workflows

    Tuesday, April 2 – Wednesday, April 3 All day at booth #331

    So join us at the Javits Center on April 2-3 at Booth #331! Our in-house experts will be giving demonstrations and ready to answer any questions you may have. We’re looking forward to seeing you there.

    Register Here

    The post BuildingsNY 2019: Discover the ultimate resources in property management appeared first on SiteCompli.

  • NEWS UPDATE: U.S. SBA Officially Adopts $500,000 Appraisal Threshold 1 month ago

    The agency’s action brings its appraisal threshold in line with federal bank regulators.

    The U.S. Small Business Administration just announced an important change to its 7(a) and 504 loan program appraisal requirements, effective March 26, 2019. This development brings the …

    The post NEWS UPDATE: U.S. SBA Officially Adopts $500,000 Appraisal Threshold appeared first on EDRnet.

  • 4 Potential Facade Updates You Must Know 1 month ago
    Take a closer look at where facade laws are headed so you can stay compliant. Bill Morris over at Habitat wrote this article to inform us about it.

    In December 2015, hundreds of bricks worked loose from the facade of the 35-story condominium at 340 East 64th Street and crashed to the street. Mercifully, no one was injured or killed. A consultant working on the building at the time blamed the collapse on several factors, including “an original construction defect.”

    Brian Sullivan, a principal at Sullivan Engineering, sits on a DOB advisory committee that proposes changes to FISP regulations. The committee’s attention is now focused on Cycle 9, which begins in February 2020.

    Here are some of the proposed changes:

    Probes to verify and document wall anchors in cavity wall facades might be required in the 9th cycle and every 10 years thereafter.

    • The building at 340 East 64th Street has cavity walls, meaning there’s space between the structural walls and the brick skin, and the two are held together by metal anchors. “The idea of the probes is to make sure that there are sufficient anchors to prevent another facade collapse,” Sullivan says, “and to make sure the anchors are appropriately spaced and in good condition.”

    The number of required close-up inspections might increase.

    • One of the proposed revisions is to have hands-on inspections (by workers on scaffolds or rappelling ropes) performed at intervals of 60 feet or lesson all facades above a public egress. “That change will affect only larger buildings and buildings with public egress in the rear yard,” Sullivan says.

    Qualified Exterior Wall Inspectors might be required to have at least three years of relevant experience.

    • Currently, these professionals approved by the DOB to submit FISP reports are required to have just one year of relevant experience. “That’s a big jump and a big improvement, I think,” Sullivan says. “There are a lot of professionals who practice in multiple disciplines but are not specialists in FISP rules and facade conditions.”

    A time frame to resolve unsafe conditions might be required, with a maximum of five years.

    • “They want a date when you’re going to resolve unsafe conditions,” Sullivan says. “The building owner signs the document agreeing to that date. This way, sidewalk sheds won’t stay up up for 10 years.”
    Click here to read the full article

    The post 4 Potential Facade Updates You Must Know appeared first on SiteCompli.

  • Preventive Upgrades to Properties Increased Nearly 25 Percent in 2018, BuildFax Hurricane Recovery Report Reveals 1 month ago

    Hurricane-related insured losses have skyrocketed over the past two years. Heading into 2019’s hurricane season, carriers face the challenging task of responding swiftly to claims, while also controlling loss creep, mitigating fraud, and managing property risk and exposure. It’s a tall order, but the right advanced data services can support these initiatives. Carriers who leverage key hurricane recovery insights can elevate the efficiency of their underwriting and claims functions. The first installment of the BuildFax Natural Disaster report analyzed the recovery period following severe hurricanes over the past two years in the U.S. and their impacts on insurance carriers and their customers.

    Hurricane Recovery Shines Light on the True Window for Large-Scope Repair Work

    The average recovery following a hurricane is 10.7 months, according to our analysis of construction data following the 11 biggest hurricanes between 2000 and 2018. This is shorter than the recovery following Hurricane Irma and Hurricane Harvey timelines, but a few months longer than projected timelines for Florence and Michael. Although the rebuilding period after a hurricane can be nebulous, with more insight into expected recovery timelines, carriers are empowered to be proactive with customers. They can also flag properties in affected regions that haven’t experienced substantial maintenance work performed in a timely manner.

    Repair Activity is Increasingly Variable as the Nature of Storms Change

    No two hurricanes are the same – a combination of differences in the affected environment and the nature of the storm lead to variability in repairs.

    BuildFax findings confirmed:

    • Roof repairs made up 55.43 percent of maintenance work following Irma in Florida.
    • 57 percent of repairs following North Carolina’s Hurricane Florence were to secondary structures, including accessory dwelling units.
    • Flooding was the most common repair after Hurricane Harvey in Houston.

    See full analysis here.

    Hurricane Preparedness Activity is Increasing in Recent Years

    Hurricane preparedness construction, which can include roof clips, impact-resistant windows, flood retrofitting, storm shutters and more, understandably increased in 2017 and 2018. Florida accounted for 87.08 percent of all storm shutter installations across the U.S. last year. Based on year-over-year estimates, however, North Carolina saw the largest uptick in storm shutter construction at 212.86 percent. Insight into preparedness activity gives insurers a good idea of which properties have a higher likelihood of withstanding future events and which may be riskier heading into the next hurricane season.

    For more insights into trends in recent hurricane recovery patterns and how insurers can mitigate their risk, download the U.S. Hurricane Natural Disaster Report

    The post Preventive Upgrades to Properties Increased Nearly 25 Percent in 2018, BuildFax Hurricane Recovery Report Reveals appeared first on BuildFax Property Condition.

  • City-Level Housing Activity Counters National Downward Trends, BuildFax February Housing Health Report Reveals 2 months ago

    The February BuildFax Housing Health Report (BHHR), which delivers a comprehensive view of macro- and microeconomic trends affecting the U.S. housing market, revealed gaps between national and city-level trends. The February report confirmed the housing market slowdown persists amidst repeat declines in key housing indicators. However, on the metro-level, some cities are still experiencing steady increases in housing activity.

    New and Existing Housing Supply

    On a national level, single-family housing authorizations, maintenance and remodel volumes were down for the fourth consecutive month. It’s important to monitor decreases in single-family housing authorizations, which are correlated to historical recessions; as well as maintenance and remodel activity, an indicator of the health of the existing housing stock. Spend experienced increases across both maintenance and remodels, which may be a product of recent spikes in U.S. construction labor costs.

    New Housing Supply Activity, February 2019

    • Single-family housing authorizations decreased 5.75 percent year over year.
    • Single-family housing authorizations decreased 4.24 percent month over month.

    Existing Housing Supply Activity, February 2019

    • Existing housing maintenance volume decreased 5.53 percent year over year.
    • Existing housing remodel volume decreased 10.07 percent year over year.

    In-Depth: A Metro-Level View of Housing Activity

    BuildFax analyzed new construction and maintenance activity across the 10 largest metro areas, where a majority saw at least one indicator decrease year over year. New construction, which encompasses single- and multi-family housing authorizations, provides a lens into whether a city’s housing market will experience increased investment. Meanwhile, maintenance activity reveals how the health of the existing housing stock is faring. This is particularly notable for insurance carriers, as increased maintenance activity is correlated with increased risk on their book of business.

    See the full analysis here.

    Four Major Cities See Notably Varied Activity

    Of the 10 metro areas analyzed, just four saw increases in new construction and maintenance activity: Chicago, New York City, Washington D.C. and Dallas. Chicago experienced the greatest growth in both indicators. Maintenance activity at the city-level increased 19.51 percent year over year, while new construction rose 60.15 percent.

    For more insight on the health of the U.S. housing market and the broader economy, download the February 2019 report.

    The post City-Level Housing Activity Counters National Downward Trends, BuildFax February Housing Health Report Reveals appeared first on BuildFax Property Condition.

  • WithersRavenel Highlights Employee Selected for EDR’s New Mentor Program 2 months ago

    NOTE TO READERS: The following article was published by WithersRavenel, a full-service civil & environmental engineering firm in North Carolina. EDR selected one of their environmental scientists for our new Developing Leaders mentor program.

     WOOLRIDGE EXCITED ABOUT EDR MENTORSHIP

    The post WithersRavenel Highlights Employee Selected for EDR’s New Mentor Program appeared first on EDRnet.

  • Commercial Real Estate: Real Estate Investors Eyeing San Diego 2 months ago

    San Diego Growth Rate of 15 Percent in 2018

    San Diego Business Journal
    By Ray Huard
    Sunday, February 17, 2019

    San Diego will be one of the 10 hot spots in the nation in 2019 for commercial real estate investment, …

    The post Commercial Real Estate: Real Estate Investors Eyeing San Diego appeared first on EDRnet.

  • MBA of NY Q&A with PRISM Speaker Brian Bailey, Fed Reserve Atlanta 2 months ago

    “The larger banks are very disciplined in their commercial real estate lending, but when you get beyond that segment, there’s a significant competitive force that’s being applied to banks from the non-banks.”

    Last week I attended a terrific …

    The post MBA of NY Q&A with PRISM Speaker Brian Bailey, Fed Reserve Atlanta appeared first on EDRnet.

  • 8 Trends Real Estate Investors Should Be Watching 2 months ago

    U.S. News & World Report
    By Rebecca Lake
    December 28, 2018

    Historically, real estate has outperformed the stock market, acting as a stabilizer for investors when volatility takes hold. These eight real estate trends are the ones to watch in …

    The post 8 Trends Real Estate Investors Should Be Watching appeared first on EDRnet.

  • Announcing Details of the 2019 Annual PRISM Conference & Awards Program Set for May in Nashville 2 months ago

    CBRE’s Spencer Levy Leads a Speaker Line Up of Industry Forecasters, Strategists & Thought Leaders in Property Risk Management

    On May 7-9th, leading minds and stakeholders in real estate lending and property due diligence will come together in …

    The post Announcing Details of the 2019 Annual PRISM Conference & Awards Program Set for May in Nashville appeared first on EDRnet.

  • BuildFax expands its underwriting solutions to include additional property attributes 2 months ago

    All too often, carriers do not have the full picture on a property to inform critical underwriting decisions. Additionally, after a property is underwritten, the profile of the property may never be updated again despite risk altering changes. To provide carriers with greater insight into property risk, BuildFax is pleased to announce it has expanded its underwriting insights product to include: pool safety features, fire protection upgrades and security systems.

    Large upticks in construction over the past few years have led to even more property-impacting changes to the U.S. housing stock. In these instances, it’s increasingly important to confirm whether structure updates have led to changes to the risk on a carrier’s book. BuildFax’s existing underwriting product suite enables carriers to validate data, accelerating quote to bind, optimizing inspection dollars and substantiating eligibility requirements with insights into new construction, remodels, roof age and more. BuildFax’s newest underwriting insights allow for an even deeper understanding of property-impacting modifications. Some of the most crucial changes involve those that directly impact a structure’s risk: the addition of a pool, pool safety features, fire protection upgrades, and security systems.

    Ensure your customers are getting the coverage they need with additional underwriting insights:

    • Pool Features: The presence of a pool increases a property’s risk level, not to mention sometimes outright violates a carrier’s underwriting guidelines. With access to BuildFax’s new pool attributes, carriers can verify the presence or addition of a pool, pool house, pool deck, pool alarms or pool enclosure at scale. Not only do these insights directly support the underwriting team, but they also allow carriers to price risk competitively and drive accurate loss ratios.
    • Fire and Security Features: Similarly, BuildFax helps carriers identify property characteristics that reduce risk. Among the number of fire prevention and security features BuildFax can recognize are installations or presence of: fire alarms, fire sprinklers, carbon dioxide alarm, security gate, and burglary alarm. These features also allow carriers to confirm whether properties fit within certain underwriting guidelines, but also make it easier for underwriting teams to apply relevant credits and provide validated loss ratios.
    • Repair Validation: In the face of increasing natural disasters and associated perils, BuildFax supports underwriting and claims functions with reports that confirm whether a property’s past repairs most likely resulted from a paid claim. Our reports can even provide more granular detail that highlights the repairs likely resulted from fire, storm or water damage. In addition to its benefits for underwriting teams, BuildFax’s intelligence into property changes also allows the claims department to verify potential instances of claims fraud where an insured submits the same claim after moving from one carrier to another.

    One carrier that recently leveraged BuildFax data to elevate their business efficiencies found BuildFax insights saved around 30 percent in additional research time developing relevant underwriting and claims strategies.

    To learn more about how BuildFax’s enhanced product suite can support your underwriting function, contact us today.

    The post BuildFax expands its underwriting solutions to include additional property attributes appeared first on BuildFax Property Condition.

  • U.S. SBA Returns from Shutdown with a New SOP 50 10 5, Effective April 1st 3 months ago

    Minor Revisions to Environmental Policies and Procedures

    Just three weeks after the federal shutdown ended, the U.S. Small Business Administration issued a new SOP 50 10 5. Version (K) will supersede the current version J when it becomes effective on …

    The post U.S. SBA Returns from Shutdown with a New SOP 50 10 5, Effective April 1st appeared first on EDRnet.

  • Key Economic Indicators Suggest Unease Among Homebuyers, BuildFax January Housing Health Report Investigates 3 months ago

    Today, BuildFax published its Housing Health Report (BHHR), which delivers a macro view of the economic trends affecting the U.S. housing market. The January report showed decreases for the third consecutive in year-over-year housing activity. The continuation of year-over-year housing declines are notable given the high correlation between decreases in single-family housing authorizations and historical recessions.

    New and Existing Housing Supply

    New Housing Supply Activity, January 2019

    • Single-family housing authorizations decreased 3.48 percent year over year.
    • There was a slight uptick in activity between December and January with a 1.23 percent increase month over month.

    Meanwhile, maintenance and remodel activity were also down year over year. As key indicators of economic health, maintenance and remodels are particularly important to watch as the U.S. housing stock ages.

    Existing Housing Supply Activity, January 2019

    • Existing housing maintenance volume decreased 6.47 percent year over year.
    • Existing housing remodel volume decreased 10.85 percent year over year.

    A State-Level View of Housing Activity

    Maintenance activity has a high correlation to consumer confidence. Trends show that homeowners are more reluctant to embark on substantial construction projects if they are uneasy about the state of the economy. Additionally, when maintenance activity is on the decline, property insurance carriers see adverse effects, primarily from increased frequency of claims.

    “Consistent property maintenance across existing U.S. structures is important for sustaining the health of the housing stock,” said BuildFax VP of Customer Operations Sefton Patton. “BuildFax studies conducted in conjunction with insurance carriers have found regular home maintenance lowers property risk over time and decreases the frequency and severity of claims. With consistent decreases in maintenance, it’s increasingly important that carriers closely monitor their books.”

    See the full analysis here.

    Spotlight: Demolition Activity

    Similar to how maintenance activity reflects consumer confidence, demolition activity often leads to reinvestment in a region. Only three states experienced increases in demolition activity last year – California, Florida and Michigan. California and Florida frequently top the list of states that see increased demolition activity. Michigan is a new contender with a 258.81 percent increase in demolitions between 2017 and 2018. Detroit’s growing demolitions program is one of the largest in the U.S. and a driver of the uptick in activity.

    For more insight on the health of the U.S. housing market, economic trends and whether a recession is on the horizon, download the January 2019 report.

    The post Key Economic Indicators Suggest Unease Among Homebuyers, BuildFax January Housing Health Report Investigates appeared first on BuildFax Property Condition.

  • Hedge funds increasingly need validated data for modern investment strategies 3 months ago

    Real estate investors have identified a strong duality within the industry. U.S. real estate has the potential to be one of the most valuable assets on the market, however, as far as tech-savvy investing goes, it’s also a particularly antiquated market. Our very own Chris Schaum spoke to this contrast at BattleFin, a conference that connects data providers to investment professionals who are looking to integrate unique or powerful data sets into their decision-making process.

    Schaum argued the real estate market will see one of the greatest opportunities for investing in the next couple years. It’s especially important now, compared to years prior, for active investors to understand the U.S. real estate industry on a micro and macro-scale.

    Leverage property-level data to determine the true value of an asset

    On a granular level, the white-hot housing market that’s seen considerable growth since 2013 is now starting to cool. BuildFax has even seen a dip for two consecutive months in the pace of new construction and existing housing maintenance across the U.S.

    With these large-scale trends affecting the housing stock, it’s important for real estate investors to understand the underlying value of their assets. Leveraging external tools for home price estimation is not enough. Instead, investors should focus their energies integrating external data sets that delve into a structure’s true risks, for instance, roof age, major systems, and property addition. This not only provides investors with a clear picture of a structure’s value, but it allows them to evaluate properties at scale, driving insights into an entire book of business.

    Economic health sees impact from the housing sector

    The impact of these recent housing trends isn’t relegated to real estate investment professionals. The macroeconomic effects of shifting housing activity also are also likely to impact hedge funds and investment professionals in other industries. Certain housing metrics, on a nationalized basis, provide deep insight into the U.S.’s economic health.

    Remodeling is one of the leading indicators of consumer confidence – consumers don’t embark on large home projects if they fear instability in the market. Identifying this quantifiable hesitance in the market enables investors to make trading decisions accordingly. Additionally, recent BuildFax research shows single-family housing authorizations are one of the leading indicators of historical recessions between 1961 and 2008. While a recession is not on the horizon, these estimates allow investors to glean deeper understanding into trends that may move markets.

    It is particularly useful to look at the effects of remodeling and single-family housing authorizations in parallel. Single-family housing authorizations are indeed a telling indicator of a future recession, however, a shift in recent years sees increased remodeling activity compared to new construction. This suggests remodeling may play an even bigger role in identifying the early stages of the next recession.

    With BuildFax’s verified, timely data at their fingertips, hedge funds have the context they need to confidently invest in a shifting market, regardless of government shutdown-driven delays to new construction reporting. BuildFax’s database of over 23 billion data points takes the guesswork out of property history and condition data and provides high quality insights into one of the largest asset classes, valued at more than $70 trillion globally.

    For more information on how BuildFax property history and condition insights can help elevate your investment strategy, contact us today.

    The post Hedge funds increasingly need validated data for modern investment strategies appeared first on BuildFax Property Condition.

  • Is Abandoned Construction An Early Signal For Economic Change? 2 years ago

     

    Could examining abandonment trends over the course of an economic downturn uncover a possible connection to the housing crisis, or even reveal a new leading indicator? And what about the rise in construction we are seeing now – is there a recurrence of abandoned projects in the current economy (or on the horizon)? These construction records just might have some pretty interesting stories to tell. (Spoiler alert: they do!)

    This paper details:

    • Abandoned construction as a leading indicator and today’s outlook
    • Possible hidden risks these trends expose
    • Commercial sector analysis for lodging-resort, healthcare, and retail

    To read the complete study, click here, or click the button below.

     

     

     

     

    The post Is Abandoned Construction An Early Signal For Economic Change? appeared first on BuildFax Property Condition.

  • Workspace Spotlight: SiteCompli 2 years ago

    SiteCompli’s office is featured in SquareFoot’s Workspace Spotlight.

    Taking up almost 11,000 square feet in the Flatiron District, SiteCompli’s contemporary office is a genuine reflection of who they are as employees and as a company.

    The post Workspace Spotlight: SiteCompli appeared first on SiteCompli.

  • 5 Largest CMBS Loans to Turn Delinquent in April 2 years ago

    In what's become a prevailing trend over the past year, the Trepp CMBS Delinquency Rate was pushed higher again in April thanks to a large amount of loans that reached their balloon date and failed to pay off. After hitting a post-crisis low in February 2016, the rate has moved steadily higher in the months following. The delinquency rate for US commercial real estate loans in CMBS is now 5.52%, an increase of 15 basis points from March.

    Almost $2.5 billion in loans became newly delinquent in April. Given the slew of maturing debt that has not been refinanced over the past few months, perhaps it’s fitting that the five largest loans to turn delinquent last month all missed their balloon date.

    1. Two Herald Square

    Backed by a 354,298 square-foot, mixed-use property in the heart of Midtown Manhattan, the $200 million Two Herald Square loan was the largest note to become newly delinquent in April.

    The loan was transferred to special servicing in March for an imminent maturity default, as it was due to mature in April but did not pay off. Corresponding financials for Two Herald Square began to head south last year, as DSCR (NCF) fell from 1.42x at the end of 2015 to 0.26x at the end of 2016. According to special servicer commentary, the decline in cash flow is attributed to H&M vacating their 32,201 square-foot space in January 2016. Last month’s servicer commentary states that the “[b]orrower has requested a short term extension and is also pursuing bridge financing.”

    Two Herald Square currently makes up 16.79% of the collateral behind WBCMT 2007-C32, a deal which features about 40.6% of its collateral marked as delinquent.

     

    2. JP Morgan Portfolio

    Second on our list is the $198.5 million JP Morgan Portfolio. The loan is backed by three properties: a 723,922 square-foot office in Downtown Phoenix, a 428,629 square-foot office in Downtown Houston, and a 1,905-space parking garage down the street from the Phoenix office. Both offices are solely occupied by JP Morgan.

    Per servicer commentary, the borrower intended to pay the loan off by maturity. Unfortunately, the borrower was not unable to land refinancing before the April balloon date, so the loan was sent to special servicing. Aggregate portfolio occupancy has clocked in at 100% every year in the loan’s life. DSCR (NCF) fell from 1.34x in 2013 to 1.21x in 2014, which then dipped to 1.15x by the end of 2016. To be sure, there are instances where borrowers reach their maturity date and simply need a short window to complete a refinancing. That could be the case with this loan and accordingly, this may play out with minimal problems for the CMBS bondholders.

    The portfolio comprises 21.29% of GECMC 2007-C1. As of last month, just less than 58% of that deal’s collateral is delinquent.

     

    3. Save Mart Portfolio

    The third-largest loan to turn newly delinquent in April was the $160.6 million Save Mart Portfolio. The portfolio is backed by 31 Save Mart grocery stores located across northern California, primarily in the San Francisco, San Jose, and Sacramento markets.

    The loan’s balloon payment was due last month, but refinancing could not be finalized before then. As a result, the portfolio was transferred to special servicing and became non-performing beyond maturity. Similar to the JP Morgan Portfolio, the aggregate occupancy for this loan has remained at 100% since securitization. DSCR (NCF) has dipped slightly from 1.03x in 2010 to 0.96x at the end of 2016. Watchlist commentary from earlier this year stated that “the main driver for the underperformance is related to income,” as it has decreased 39% from its underwritten level to year-end 2016.

    Backing 11.25% of the collateral behind JPMCC 2007-LD11, the Save Mart Portfolio is the second-largest note remaining in that deal. Only 12.89% of the collateral for that deal is currently delinquent.

     

    4. Mall of Acadiana

    The 305,149 square-foot Mall of Acadiana (though it’s now called Acadiana Mall) serves as collateral for the fourth-largest CMBS loan that became newly delinquent last month.

    Located in Lafayette, Louisiana, the mall backs a $124.7 million loan that is collateralized by such tenants as Carmike Cinema, Barnes & Noble, and Old Navy. The mall is anchored by Sears, JCPenney, and Dillard’s, but those retailers are not part of the loan collateral. Like all the other loans on this list, the Mall of Acadiana loan was transferred to special servicing for a maturity default and became non-performing beyond maturity in April. As of March 2017, the loan collateral was 97% occupied. At year-end 2016, the loan posted a 1.38x DSCR (NCF). Special servicer commentary reflects that the borrower presented the special servicer “with a modification proposal, which is being reviewed.”

    The loan is the largest remaining piece of collateral behind BACM 2007-2, a deal which has more than half of its balance backed by delinquent loans.

     

    5. Koger Center

    Our last loan on the list is the $115 million note behind the Koger Center in Tallahassee, Florida. The subject property is an 849,765 square-foot government office that features the State of Florida as the lead tenant.

    We first flagged this loan down at the beginning of 2017. Since 2012, the State of Florida has been pushing for legislation that would require the State to vacate its space at the subject property. It has not yet succeeded in its attempts, though the servicer notes that the State will likely continue to file this legislation. Per April commentary, the special servicer and the borrower “are engaged in discussions for a possible modification of loan terms.” Through the first nine months of 2016, the property was 92% occupied and DSCR (NCF) was 1.50x. The loan was transferred to special servicing in January 2017.

    The Koger Center note currently makes up 21.65% of the balance for CSMC 2007-C1. More than 85.04% of that deal’s collateral is classified as delinquent.

     

    For more information on newly delinquent loans and the current rate of CMBS delinquencies, send us a note at info@trepp.com.

  • BuildFax A Finalist for Benzinga Global Fintech Awards 2 years ago

     

    BuildFax is thrilled to be a finalist in the 2017 Benzinga Global Fintech Awards for Best Digital Mortgage or Real Estate Platform, Tool, or App.

     

    We are nominated alongside the most innovative companies that are changing the way people interact with finance. You can check out the full list of finalists here.

     

    We’ll be in NYC for the awards ceremony on May 11th. Want to join us? You can get your tickets at www.BZAwards.com.

     

    We hope to see you there!

    The post BuildFax A Finalist for Benzinga Global Fintech Awards appeared first on BuildFax Property Condition.

  • Heightened NYC Apartment Supply Puts the Squeeze on Multifamily REITs 2 years ago

    I don't want to sound like Captain Obvious, but a lot of people want to live in New York City. NYC neighborhoods are getting redeveloped left and right as potential residents continue to flock to apartments in all corners of the five boroughs. However, REITs that specialize in the multifamily sector, particularly those with an exposure to high-end apartments in New York City, continue to struggle in the face of new construction.

    Equity Residential, which owns 40 properties with 10,007 units in the city, is one of the REITs that is feeling the heat. The firm noted that rents at their NYC units remained under pressure as 15,000 new units are expected to be delivered city-wide this year, and another 17,000 are on the books for next year. The city's high-end apartment stock is also getting whacked by the lack of newly created high-paying jobs.

    Equity Residential's stock price has felt the pain resulting from heightened construction. While the firm's stock is up 2% in 2017 YTD - a figure inline with a broader REIT index - it's down 7% over the last year. In contrast, the broader REIT index is up 2% during that period.

    In spite of the squeeze, demand for Equity Residential units in NYC remains healthy. This is evidenced by the company's stable 95.9% occupancy rate for the city, down just 0.3% from a year ago. The firm's NYC units rent for a monthly average of $3,668, but concessions have averaged $575/unit during the first quarter of 2017.

    In a conference call with analysts this week, Equity Residential's senior executives noted that rents for units which turned over during the first quarter declined by 6.2%. Overall, lease rates were down 1% during that same period. However, the caveat is that the first quarter is usually a slow one, so the data aren't too damning. As the company moves into the busy time of year, it expects rental rates to stabilize.

    Apartment Investment and Management Co., or Aimco, owns 18 properties with roughly 1,000 units in the greater New York City area. While rents at those units have actually increased over the past year, their net operating income was flat during the latest period because of a spike in expenses. The firm's stock price is also down 3.9% on the year. Its NYC-area properties account for 4% of the company's overall NOI.

    AvalonBay Communities Inc., which owns 2,636 units in the city, saw monthly rents decline marginally to $3,801/unit in Q1 2017. Those rents are up 2.1% over the past year, but New York City accounts for just less than 5% of the firm's overall portfolio, which is heavily concentrated in California. (Rents in certain areas of Southern California are up 5% year-over-year.) It also owns 3,300 units in the Seattle market, where rents have jumped by more than 6%. AvalonBay's stock is up 7.3% so far this year, and 4.8% over the past 12 months.

    The good news is that any new development plans for NYC apartments have been stifled thanks to escalating construction costs, high land valuations, and the reluctance of lenders to provide construction loans with more than 65% leverage. So as units in the construction pipeline get completed and absorbed, sailing ought to smooth out for NYC landlords.

  • New Conduit Issue to Price After Busy Week in Broader Markets 2 years ago

    Global equities rallied early last week after poll results confirmed that Centrist newcomer Emmanuel Macron and far-right contender Marine Le Pen were the top two candidates to advance to the final round of the French presidential elections. This has been one of the most widely followed and consequential French elections in recent memory, and voters will have to make a choice between two vastly different political directions for the future of France. 

    First quarter earnings reports, which generally beat expectations, dominated headlines throughout the week and further helped boost the major indexes. The NASDAQ composite rode on this momentum and hit the 6,000-mark for the first time on Tuesday. In terms of notable corporate earnings from the past week, General Motors tallied a 34% increase in Q1 profits, while Amazon, Microsoft, and Alphabet (Google) posted favorable results due to strong growth in their cloud-based services. However, the markets took a downward turn on Friday as a disappointing GDP number (0.7% annualized growth for Q1) and consumer data (0.3% growth) weighed on stocks and pointed to a rather slow start for the US economy in 2017.

    In the secondary CMBS market, over $670 million was out for bid last week. Most of the volume came from Thursday’s session where legacy, seasoned 2.0/3.0 conduit paper, and a block-sized super senior trade all made their way to the bid list. For the week, cash spreads widened modestly at the bottom of the credit stack, while CMBX underwent some considerable tightening in tandem with the equity rally. CMBX 6/7/8/9/10 AAA spreads narrowed by two to six basis points, while BBB- spreads inched in between 26 and 30 basis points. A new conduit transaction and $465 million single-borrower deal were in the queue for pricing last week.

    For yet another round-up of retail-related news, Kit and Ace indicated on Wedncesday that it will close all 40 US store locations, as well as its operations in Australia and the UK. The Canadian apparel brand will shutter those locations in an effort to focus on its global e-commerce platform and its Canadian-based showrooms. On top of additional closure lists released for Sears Auto and Kmart Pharmacy locations last week, women’s retailer Bebe officially announced that it will liquidate all 175 of its physical stores by the end of May in pursuit of alternative lines of business.

    An interesting article from GlobeSt citing PGIM Real Estate Finance discussed how Dodd-Frank risk retention provisions could provide greater opportunities for well-funded CMBS lenders and B-piece buyers. The piece mentioned that regulatory mandates could make CMBS a more attractive capital source for borrowers, requiring higher leverage and yield targets in the process. Ultimately, PGIM believes that the rules could potentially lead to improved credit quality and better risk-adjusted returns for B-piece buyers without the consequence of increased borrowing costs.

    As we mentioned in a TreppTalk blog last week, a recently-introduced, bipartisan House bill could ease the classification for high-volatility commercial real estate (HVCRE) under the Basel III framework. This classification would make it easier for banks to take part in financing for acquisition, development, and construction projects (or ADC loans).

    Trading and CMBX Spreads

    CMBS Swap Spreads

    Legacy LCF Price and Swap Spread Movement

     

    Top Credit Stories from the Week

    - Trading Alert: Resolution for Maryland Office Loan Comes with Large Loss (WBCMT 2005

    - Trading Alert: Capital One Inks Large Lease; Positive SIgn for Delinquent Legacy Loan (WBCMT 2007-C31)

    - Alabama-Based Bank to Vacate Birmingham Office (LBUBS 2008-C1)

    - Trading Alert: Insurance Firm Acquires REO Virginia Office: 2006 Loan Recovery Could Disappoint (MSC 2006-HQ8)

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