Wednesday, April 29, 2009

Griggs, Ryan Secure $1.8M for Salem Health & Rehab Center

NBS Financial Services' Ken Griggs and Paddy Ryan have secured $1.8 million in financing for the Evergreen Windsor Health & Rehabilitation Center in Salem, OR. The 20,720 sf senior living facility has 100 beds, is 20,720 sf and provides both short- and long-term care.

Griggs is an Executive Vice President and Ryan is an Associate Finance Officer in NBS Financial's Portland office. View their profiles here.

Monday, April 13, 2009

Hering, Jr. Garners $25M in Funding for Three Apartment Complexes

NBS Financial Services Executive Vice President Blake Hering, Jr. has secured $25 million in financing for three apartment communities in the Portland metropolitan area since the beginning of the year.

Lender State Farm Life Insurance Company provided $10.5 million for the 235-unit Squire’s Court Apartments in Clackamas, $10 million for the 240-unit Riverwood Heights Apartments in Tigard, and $4.5 million for the 124-unit Cedar Square Apartments in Cedar Hills.

State Farm is one of several active sources for NBS Financial Services.

“In a glacially slow-moving commercial debt market, this is a positive sign that some lenders have remained active and competitive for high quality assets with well-positioned ownership,” Hering, Jr. said.

Monday, April 6, 2009

Market Watch: April 2009

During late March, the supply of US Treasuries dramatically increased as $98 billion in five and seven year term notes were issued.

Shortly after the supply increase, the Fed began buying up treasuries in an attempt to control interest rates from skyrocketing. In recent days, approximately $15 billion has already been spent at treasury auctions for 3, 7, and 10 year notes. Showing some positive feedback, treasury rates trended downward toward the end of the month. In this historic low-rate environment, the Fed’s purchase of treasury notes is a key component to keeping inflation under control.

A toxic asset purchase plan was introduced in March to aid financial institutions with getting non-performing assets off their books to stave off future "mark to market" write-downs. According to the plan, the Treasury could spend up to $1 trillion removing these "toxic assets" from the company’s balance sheet. Government money would be coupled with private investment, sharing in the risk/reward as these loans mature. The market found comfort in the Fed’s plan as the Dow finished the month up almost 20% from recent lows.

In addition, there have been conversations regarding the modification of "mark to market" accounting rules. This could counteract the Fed’s asset purchase plan by making it more attractive for bankers to hold onto non-performing loans, however, it may also relieve financial institutions from taking future write-downs on their already heavily discounted portfolios.

Commercial mortgage rates have come in slightly for the month, thanks to sharp treasury declines, as US treasuries are used as a ‘benchmark’ for commercial mortgage pricing. Lenders continue to be conservative but are active in today’s market. We are currently closing 5, 7, & 10-year fixed-rate loans with correspondent life insurance company lenders as well as other sources including Fannie Mae & Freddie Mac.

March 2009 Treasury Highlights:
• March 10 Year Treasury High: 3.02% on March 1st
• March 10 Year Treasury Low: 2.54% on March 18th
• March 10 Year Treasury Month-End: 2.66%

Issues Affecting Commercial Mortgage Rates:
• Steep declines in US Treasury Rates even as Government increases supply
• Swap spreads holding steady after Treasury decline, keeping Interest Rates near all time lows
• Fannie Mae & Freddie Mac extremely competitive on Multi-Family financing with Rates for a 10 Year Fixed Rate Loan well under 6%
• Local banks feeling pressure as Fed’s issue "stress tests" on their real estate portfolios
• Stringent underwriting has Lenders trending rent and expense projections based on the economic outlook insuring against future portfolio defaults

NBS Releases First Quarter Reports for Portland Metropolitan Area

NBS has released First Quarter 2009 market reports. These reports cover the office, industrial, retail and multifamily product types, as well as a general overview of the economy. They can be found on our Web site here.