August 1, 2012

The Wednesday Wrap: Aug. 1, 2012

Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Below are five stories that caught our eyes in recent days.

Hartman Simons Commercial Real Estate blog• “Multifamily Strength Enticing Banks Back into CRE Lending” by Mark Heschmeyer of CoStar.

More banks are moving back into commercial real estate lending, according to comments from bank executives in their second-quarter earnings conference calls, and the white-hot multifamily sector is generally serving as their jumping-off point.

However, their interest in other sectors appears to be growing. “We're not going into [the commercial real estate] market with just a bet that we're just doing multifamily,” said Kirk W. Walters, senior executive vice president and CFO of People's United Financial Inc. “Certainly multifamily will be in the mix, it will be one of the things we'll be doing, but we'll be doing all types of commercial real estate.”

Heschmeyer also writes banks are looking to finance more new construction rather than just existing properties.

• “Seniors Housing Investors Focus on Smaller Deals in 2012” by Jennifer V. Hughes for National Real Estate Investor.

After last year’s blockbuster deals in the seniors housing industry, experts are saying the sector will see smaller transactions in 2012.

There are still plenty of good opportunities in the market, just at a more modest level, Bob Kramer, president of the National Investment Center for Seniors Housing and Care Industry (NIC), told Hughes.

This year is showing far less activity in portfolio sales and much more activity in the buying of single and smaller properties, said Matthew Whitlock, senior vice president and managing director with CBRE’s Senior Housing Services Group. Whitlock expects the trend to continue until there is more property development in the market.

But as occupancy rates continue to rise, investors are drawn to senior housing. It has been one of the strongest sectors during the recession because of its need-based nature, said Chuck Harry of NIC.

 • “Social Security to Close 5 Field Offices” by Sean Reilly of Federal Times.

As part of a continued effort by federal government agencies to rein in spending by reducing real estate space, the Social Security Administration (SSA) has announced it will close five field offices by the end of September.

The five are in Biloxi, Miss.; Ketchikan, Alaska; Louisville, Ky.; Washington, D.C.; and Clinton, Iowa. Eight other field offices have closed since January.

The offices are being consolidated and workers are not losing jobs, SSA spokesman Mark Hinkle told Reilly. Those opposed to the closings say they could leave citizens without direct access to benefits information and service representatives.

“CMBS Delinquencies Increase for the Fifth Consecutive Month” by Jacqueline Hlavenka of Globe St.

The CMBS delinquency rate has risen for the fifth straight month, according to the latest monthly report by Trepp LLC.

The CMBS delinquency rate rose to 10.34 percent in July, up from 10.16 percent in June. The recent climb in the delinquency rate began in February, as 2007 loans that were not refinanced reached their balloon dates in the first part of 2012.

The loans are not getting resolved as quickly as Trepp had anticipated, but the firm still says the delinquency rate will level off in the next couple of months.

“Apple Got Special Treatment for Grand Central Lease, Audit Says” by Freeman Klopott of Bloomberg.

Apple Inc. was given inside information by the Metropolitan Transportation Authority (MTA) that helped it win a lease for a store in Grand Central Terminal, according to an audit by New York Comptroller Thomas DiNapoli.

The audit was performed as a follow-up to a 2010 audit that found the MTA real-estate division didn’t always use a competitive process to market rental properties. The most recent audit said that MTA gave Apple an unfair advantage by negotiating the lease with Apple for more than a year before asking for proposals from companies to fill a space that was occupied by a restaurant. Before asking for proposals, Apple had already entered a buyout pact with the restaurant.

MTA Chairman Joseph Lhota said that DiNapoli’s opinion was “worthless” and insisted the deal with Apple was completely lawful. 

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