Commercial RE Funding and REIT News [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Commercial Real Estate and Real Estate Investment Trusts [REITs]

HFF Secures $172M M-F Development Loan. “Holliday Fenoglio Fowler L.P. has arranged for $172.5 million in financing for the development of three multi-family properties. The construction/mini-permanent loan is for three properties that are scheduled to consist of over 1,100 units in Maryland, 15 miles from Washington, D.C… The loans were arranged by HHF on behalf of Archstone. Archstone will borrow the funds on a 60-month loan from TIAA-CREF, a financial services company.” (Commercial Property News, Sept. 8) 

Apartment Reits Seen At A Crossroads. “Up until now, apartment REITs have been reaping the benefits of the battered homeownership market as more renters have been staying put in their apartments instead of buying homes. Also, steady access to cheap debt from Fannie Mae (FNM) and Freddie Mac (FRE) has [helped]… However, surging gas and commodity prices, widening spreads on Fannie Mae/Freddie Mac debt and rising unemployment are… making it tougher for [apartment REITs] to raise rents or access cash for new developments in order to grow… Rising foreclosures and falling home prices could start to make home buying attractive again — which would hurt apartment rents and occupancy levels even more.” (Investment News, Sept. 8) 

Property Paradox: Falling Property Values May Signal Bull Market for REITs. “Lehman Brothers (LEH) and others [are] writing down the values of [commercial property] portfolios recently acquired in leveraged buyouts. Macklowe Properties and others [are] selling properties at reduced prices to reduce leverage… Transaction based indexes already down… [Yet] historically, when commercial property values have begun to fall, REITs have been poised for the start of a long bull market. NCREIF Property Index: Declining commercial property values started in Q4’90 [and] didn’t recover their 1990 peak until Q2’95… Meanwhile… equity REIT returns… [troughed] in October 1990. And then... equity REITs embarked on a seven year bull market… during which total returns averaged more than 20%/year.” (REIT.com, Sept. 5) 

HFF Arranges $90M Loan for New Archstone M-F Project in Boston. “Development of Archstone Avenir, a 241-unit luxury apartment community in Downtown Boston, is moving forward with help from a $90 million construction loan arranged by the Boston and Dallas offices of Holliday Fenoglio Fowler L.P. The 36-month construction loan was secured through NEBF Investments (National Electrical Benefit Fund), a union pension fund advisor and real estate investment program... The fund, created by the International Brotherhood of Electrical Workers and National Electrical Contractors Association, has nearly $12 billion in net assets, making it the third largest Taft-Hartley pension fund in the U.S.” (CPN, Sept. 5) 

European ProLogis Fund Secures $383M Refi. “ProLogis European Properties Fund II, a private equity fund established by distribution facilities provider ProLogis (PLD), has attained a five-year secured term loan facility valued at €264M, or approximately $383M, for the purpose of refinancing 34 properties in Central Europe… The portfolio of distribution facilities encompasses an aggregate 7.5 million square feet of recently constructed space in Poland, the Czech Republic, Slovakian and Hungary.” (CPN, Sept. 5) 

Houston Economy Shows Early Signs of Slowdown. Texas: “Despite the continued strength of the region's market, experts at the third annual RealShare Houston said slowdowns reflecting the national economy are beginning to be felt locally… Ed Page, principal with Page Partners, and Stewart Robinson, senior director of Hines, said leasing velocity is good on the retail and office sides, but both sectors are off from their peak of 18 months to two years ago. Michael Boyd, principal with Boyd Commercial LLC, echoed the same trend on the industrial side.” (Globe St., Sept. 5)

AvalonBay Forms $950M Apartment Fund. “AvalonBay Communities Inc. (AVB) has created a new fund that will focus on the acquisition and operation of apartment properties in high barrier-to-entry markets in the Northeast, Mid-Atlantic, Midwest, and on the West Coast.  A private discretionary investment vehicle, AvalonBay Value Added Fund II L.P. has a total $333M in equity commitments--$183M from four institutional investors and $150M from AvalonBay--resulting in leveraged buying power of as much as $950M.” (CPN, Sept. 4)

                                                         

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.