NBS Financial's Hering, Jr. Arranges $25.5M for Sacramento-Area Apartments

NBS Financial Services Principal, Director of Portland Production Blake Hering, Jr. has arranged $25.5 million in acquisition financing for the Pinnacle at Galleria Apartments, a 236-unit apartment community in Roseville, California. Financing was provided by Freddie Mac through one of NBS Financial's joint venture relationships.

Buyer Oregon Pacific Investment & Development Company (OPID) paid about $166,000 per unit for the high-quality complex, and received several years of interest-only payments and a very attractive rate, Hering, Jr. said. Built in 2001, the Pinnacle is located in an appealing area outside of Sacramento, across from The Galleria, the region's premier mall, and next to The Fountains, an upscale lifestyle center.

The purchase of the Pinnacle at Galleria Apartments was the second part of a 1031 exchange, which exempts a transaction from capital gains taxes. OPID, a longtime client of Hering, Jr.'s, sold Parkside Center, a downtown Portland office building, in September. NAI Norris, Beggs & Simpson President Chris Johnson and Vice President MaryKay West represented OPID in the Parkside sale.

"This transaction is a great example of the array of commercial real estate services, including financing, brokerage and property management, provided by the Norris, Beggs & Simpson family of companies," Hering, Jr. said.

NBS Financial Secures $7.5M for West Seattle's Soundview Apartments

NBS Financial Services Principal Mike Wood and Associate Finance Officer Andrew Patterson have secured $7.5 million for the Soundview Apartments, an 85-unit apartment building with ground-floor retail in West Seattle.

The Soundview Apartments were built in 2001 and have a strong operating history; now fully leased, they have been more than 97 percent occupied for the past five years, Wood said. They are on California Avenue SW just a few blocks from the West Seattle Junction, the area's main shopping and dining hub.

The property's operating strength and excellent location made it attractive to life insurance company lenders, who make up the majority of NBS Financial's correspondent relationships.

"Life insurance companies will do forward rate locks, which many other types of lenders don't do, and our lender was able to lock in a very attractive rate for the borrower five months in advance of funding," Wood said.

The loan has a 7-year term with 30-year amortization.

NBS Financial's Harding Arranges $7.5M for Portland Owner-Occupied Industrial Building

NBS Financial Services Senior Vice President Todd Harding has arranged $7.5 million for the Morgan Distributing, Inc. Building, a 104,800 sf owner-occupied industrial building in Northeast Portland.

The building was constructed in 2010 at 18300 NE Portal Way to replace Morgan's previous facility in Oregon City, Harding said, and is very modern with a 32-foot clear height. The fixed-rate, fully-amortizing, 17-year non-recourse loan was provided by State Farm.

NBS Financial has an exclusive relationship with State Farm, and has closed over $130 million in loans with the life insurance company in the past five years.

Morgan Distributing is a 53-year old local, family-owned company. It has long been the Portland area's distributor of Anheuser Busch products, as well as many Oregon craft breweries and other alcoholic and non-alcoholic beverage brands.

NBS Financial Arranges $26.5M in Acquisition Financing for 344-Unit Austin Apartments

NBS Financial Services President Ken Griggs and Finance Officer Paddy Ryan have arranged $26.5 million in acquisition financing for the Remington Apartments, a 344-unit apartment community in Austin, Texas.

NBS Financial represented the buyer, Walter C. Bowen and BPM Real Estate Group LLC, a Portland-based owner and manager of apartments and assisted living. Funding was provided by Fannie Mae through a correspondent relationship of NBS Financial's.

The loan was fully leveraged with a 10-year term and 30-year amortization. The buyer had a tight acquisition timeline, and the loan closed in 48 days.

Remington Apartments is a Class A, garden-style apartment complex, built in 2007.

Seattle Commercial Real Estate Market Third Quarter Update

Seattle has the seventh-best commercial real estate market in the country, according to a recent report from the Urban Land Institute, and recently released Third Quarter reports were positive.

Amazon’s growth continues to garner national headlines for Seattle’s office market. After already leasing a considerable amount of space in 2012 and announcing the development of a million new sf of office space in three buildings downtown, Amazon also said it will buy its 1.8 million sf South Lake Union campus from Vulcan Real Estate for $1.16 billion. While Amazon has been responsible for much growth in the office market, CoStar, a source of commercial real estate information, reports that the area’s overall office vacancy was flat during Third Quarter at 10.8%.

The apartment market remains another bright spot, but vacancy was fairly flat at just under 5% in Third Quarter, according to Dupre + Scott Apartment Advisors. Rents have been rising moderately in recent months, and Dupre + Scott reports that managers plan to raise rents during the winter. Construction has been ramping up in recent years, so we’ll start to see more apartment deliveries in 2013.

The industrial market was fairly flat during Third Quarter, CoStar reported, with vacancy at 6.2% and a little more than 100,000 sf absorbed. First and Second Quarters were both very strong quarters for the industrial market, so year-to-date absorption stands at more than 3 million sf.

The retail market showed improvement during Third Quarter, with vacancy falling three percentage points to 5.5%, according to CoStar, and nearly half a million sf of absorption. Rental rates were down slightly, but are still up from a year ago.

Seattle’s commercial real estate market is expected to continue to improve in 2013. Contact your NBS Financial Services Finance Officer to discuss your next financing transaction.

NBS Financial Arranges $9M for Grocery-Anchored Shopping Center in Small Washington Town

NBS Financial Services Principal Mike Wood and Associate Finance Officer Andrew Patterson have arranged $9 million for Pioneer Village Shopping Center in Orting, a small town about 40 miles south of Seattle.

The 82,130 sf Pioneer Village Shopping Center was built in 2000. It is anchored by Safeway and is 92 percent occupied. The borrower was seeking a long-term, fully amortizing loan.

"This was a heavily shopped transaction, but NBS Financial was able to step up and deliver a very attractive rate and terms that beat the competition," Wood said.

With a population under 7,000, Orting is considered a tertiary market, which was initially a concern for some lenders, who prefer larger primary markets. Anchor tenant Safeway doesn't report sales, and its lease is up for renewal in less than ten years, which was also a concern since the borrower sought a longer term loan.

But NBS Financial was able to overcome these challenges with a relatively conservative loan-to-value and a rate in the low 4 percent range on a 20-year loan term with a 20-year amortization.

Portland Commercial Real Estate Market Saw Improvement in Third Quarter

Some good news was present in Third Quarter reports detailing Portland's office, retail, industrial and multifamily markets. The reports are available here.

Office vacancy fell in the Central Business District, suburbs and Vancouver. TriMet’s more than 50,000 sf lease at downtown’s Harrison Square was the largest office lease of the quarter, and the $38.7 million sale of Parkside Center, also in downtown, was the largest sale.

The industrial market improved from a slow first half, with vacancy falling to 13.58%, and 161,422 sf of positive absorption. North/Northeast, the largest industrial submarket, saw significant improvement, including a number of leases over 50,000 sf.

Retail vacancy was fairly flat at 6.82%, with slight positive absorption. Leasing activity picked up in 122nd/Gresham, as ReStore and the Hannah Agency leased a total of nearly 35,000 sf there. Downtown has also seen smaller leases for a number of new restaurants from well-known Portland chefs and restaurateurs.

Portland’s apartment market remains very strong, with vacancy remaining at 2.60, its seventh consecutive quarter under 3%. We are tracking more than 6,000 units either proposed or under construction in the metro area, and though we have seen a few of these projects come online, 2013 and 2014 will see many more deliveries.

2012 Umpqua Bank Challenge

NBS Financial sponsored the 2012 Umpqua Bank Challenge, held in Aloha (just outside of Portland) Aug. 26-28. Pictured above is President Ken Griggs (second from left), Finance Officer Paddy Ryan (fourth from left) and Associate Finance Officer Andrew Patterson (far right) with one of our signs.

Second Quarter Reports Show Some Positive Signs for Portland Commercial Real Estate Market

NBS Financial has released its Second Quarter 2012 quarterly reports for office, industrial, retail and multifamily commercial real estate, as well as its economic report.

 

Office vacancy rose slightly during Second Quarter, to 13.71 percent in central city, 22.76 percent in the suburbs, and 16.62 percent in Vancouver.

Retail vacancy rose slightly to 6.91 percent, with a significant increase in vacancy in Central City as the Yamhill Marketplace former Bally Total Fitness became available. Grocery stores, including Wal-Mart, continue to expand throughout the metro area.

Industrial vacancy fell slightly to 14.19 percent during Second Quarter, with a significant drop in vacancy in Vancouver due to Canfield Transfer’s 62,798 sf lease at Columbia Business Center, and some other sizable leases.

The multifamily market continued to improve, with vacancy down to 2.6 percent during Second Quarter and rental rates rising. Though the single-family housing market is finally seeing some sustained recovery, the apartment market will remain healthy, with strong demand for the roughly 6,000 units under construction in the metro area.

Full reports are available at http://www.nbsfinancial.com/research.html.

Henderson Arranges $26.3M for Two Washington State Office Properties

NBS Financial Services Finance Officer Jeff Henderson arranged $16 million for the PPE Building, a 93,509 sf office building in Tumwater, WA, and in a separate transaction arranged a $10.3 million loan for the I-5 Technology Center, a 98,856 sf office building in Federal Way.

“Most of the lenders we represent are looking to increase their investment in the Northwest," Henderson said. "Because of this increase in competition, they are taking the extra time to understand the nuances of certain opportunities in order to structure a deal and win the business.”

Deal Spotlight: NBS Financial Services Secures $14M for Spokane Apartments

Senior Vice President Wally Harding has arranged $14 million in refinancing for Adirondack Lodge, a 228-unit apartment community in Spokane, Washington. Funding was provided by Fannie Mae through Walker & Dunlop’s Jay Thomas, a Senior Vice President in the company’s Dallas office.

Adirondack Lodge is a Class A community in the highly desirable South Hill neighborhood of Spokane. It features a community lodge, fitness center and swimming pool, and is within walking distance of a variety of retail amenities, schools and public transportation.

NBS Financial and Walker & Dunlop have teamed up to provide financing for a number of other apartment communities in the greater Spokane area.

Deal Spotlight: Harding Arranges $4.7M in Refinancing for Wilsonville Industrial Property

Senior Vice President Wally Harding has arranged $4.7 million in refinancing for NTP Distribution, a 108,825 sf warehouse/distribution facility in Wilsonville, Oregon. Lender StanCorp Mortgage Investors provided a long-term, fixed-rate mortgage at a low rate.

NTP Distribution is an after-market provider of products, parts and accessories for dealers in the recreational vehicle (RV) and hitch and tow industries. The Wilsonville facility, at 27150 SW Kinsman Road, is its national corporate headquarters and a major distribution center.

Wilsonville, about 20 miles south of Portland, is a highly desirable growing location for industrial space users due to its close proximity to I-5, Harding said.

February Market Watch: Fed Keeping Rates Near Zero Until 2014

The Federal Open Market Committee announced after its meeting in late January that it plans to keep interest rates near zero until 2014. This was a somewhat surprising decision, considering that unemployment fell to 8.3% in January, the fifth consecutive month it has decreased, and the economy has seen other signs of improvement in recent months. The Fed remains cautious, and could change course if unemployment falls more significantly and the American economy begins growing at a faster pace. Out of 49 economists surveyed by the Wall Street Journal recently, the majority believed that rates should be raised sooner and were concerned that keeping rates low could spur inflation.

Despite the Fed’s lack of confidence in the economy, the commercial real estate finance market has been performing well. Life insurance company lenders, NBS Financial’s major correspondent relationships, are increasing allocations for 2012. The Mortgage Bankers Association (MBA) is expecting $230 billion in commercial and multifamily mortgage origination during 2012, a 17% increase from 2011, and up to $290 billion in 2015. Although the CMBS market is still nowhere near its pre-recession heights, it has seen improvement in recent months.

NBS Financial's Harding, Stapleton Secure $10M for Oregon City's Safeway-Anchored Hilltop Mall

NBS Financial Services Senior Vice President Todd Harding and Associate Finance Officer Mick Stapleton have arranged $10 million for the Safeway-anchored Hilltop Mall Shopping Center in Oregon City.

The Safeway, which opened in November and also has a fueling station, is the company’s first store in Oregon City in nearly 40 years. It sits on the former site of Danielson’s Fresh Marketplace, which closed in March 2010 and was demolished. Former Danielson’s owners Craig Danielson and Carol Suzuki own and operate the shopping center, which comprises about 180,000 sf and includes a movie theater, banks, restaurants and more.

Though it was sad to see the closure of Danielson’s, a community fixture for 35 years, Safeway is about 20,000 sf larger and employs more staff (about 150 people), Harding said.

“The new Safeway is a great addition to Oregon City, and the community is very excited about it,” Harding said, noting that the store’s opening was attended by Congressman Kurt Schrader, Clackamas County Sheriff Craig Roberts and many Safeway officials. The Safeway is also cited differently than Danielson’s which, along with a new road and other improvements, has given the shopping center a fresh look and feel.

Allstate, one of NBS Financial’s newest correspondent relationships, provided the loan. One challenge the NBS Financial team had to overcome was that some new space at the shopping center was vacant at the time they were seeking financing. But Allstate recognized that a strong, grocery-anchored shopping center would have no trouble gaining tenants.