Wednesday, November 19, 2014

NBS Financial Completes $5.6M Refi in 32 Days

NBS Financial Services’ Mike Wood, Principal, Director of Seattle Production and Associate Finance Officer Austin Johnson have arranged $5.6 million in refinancing for Opus Seaway Commerce Center, a 99,222 sf manufacturing building. NBS Financial represented the lender, Jefferies LoanCore, LLC. Rainer Properties, LLC was the borrower.

Opus Seaway Commerce Center 
Built in 1996 by the national developer Opus, the Opus Seaway Commerce Center is a multi-tenant industrial building located at 2300 Merrill Creek Parkway in Everett, Washington. Rainer Properties purchased the property in 2011 and it has since become fully leased with its most recent tenant, Giddens Industries, scheduled to move in January 2015. Yet, the seemingly straightforward refinance was not without a challenge.

“We closed within 32 days,” explained Mike Wood. “This was due to the fact the borrower had an existing loan that was maturing October 31, 2014.”

With the building 100% occupied and a sufficient remaining term on the tenants’ leases, Wood and Johnson were able to structure a 5-year fixed rate term and 30-year amortization.

Thursday, September 18, 2014

Idyllic Times for CRE

Blake Hering, Jr.
The many considerations that affect valuation and pricing of commercial real estate have now aligned to create a near ideal environment for commercial real estate borrowers. It’s been a long time since so many broad-based economic factors have conspired so favorably. Indeed, it’s unusual to see such typically divergent factors team together:

Surge in Capital:
    • The market is overflowing with foreign and domestic capital, including both debt and equity from institutional and private sources.
    • Investors, both buyers and lenders, are flush with money.

      Historic Low Treasury Yields:
    • At the end of August 2014, U.S Treasury yields were below 2.35% - the lowest in over a year! As the index used to price commercial mortgages, we’re seeing simultaneous low interest rates.
    • So why are U.S Treasuries attractive now? The simple answer is geo-political risk. In essence, we’re experiencing the infancy, or arguably the adolescence, of a truly global economy. Concerns about overseas conflict in the Middle East and Russia as well as financial distress in Europe and South America are driving global investors to seek the relative safety of the world’s surest investment: U.S Treasuries.
    • This investment demand drives down yields, and by extension, commercial property mortgage rates. For example, well-positioned, modest leveraged, quality real estate have been getting longer-term fixed rates in the mid 3% range.
    • Normally, low Treasury yields are a symptom of a tanking economy. Yet, the U.S economy is experiencing widespread recovery.

      Solid Economic Recovery Supports Commercial Real Estate Fundamentals:
    • A strong economic recovery now translates to robust commercial real estate fundamentals. Supply and demand has substantially regained balance across all property types.
    • Real GDP growth was revised up to 4.2% in Second Quarter 2014.
    • Consumer confidence is on the rise and employment gains, though modest, have remained consistent.
    • Perhaps most surprising is the fact that we’re simultaneously experiencing both a bull market in equities (rising stocks) and historic lows in Treasury yields (bonds).
    • Though the course to recovery has been choppy, the likelihood of another collapse is less probable.
 How Lenders Evaluate the Market

Of course, the various property types perform differently in the market. Since my job is to help commercial property owners obtain financing, I can provide insight into how lenders evaluate the different property types as ranked by their current market strength: apartments, industrial, retail and office.

The apartment market continues to exhibit substantial surges in renters, rental growth and subsequent proliferation of new units. The bulk of this activity is fueled by millennials and baby boomers competing over the same product. Both major demographics are vying for similar lifestyles of greater efficiency, though motivations may be different. In consideration to these social and economic factors, lenders will underwrite and price apartments most aggressively. In the Portland metro area there is a bit of concern about the volume of new construction, especially since it’s concentrated largely at the same demographic with higher-end urban infill locations. Yet the apartment boom has been sorely needed as judged by the city’s consistent low vacancy rates.

The next hottest property type is bulk industrial, which is generally a straightforward assessment. If the property is clean, well-located and maintained, then it’s both leasable and desirable as collateral for a loan. Industrial rents don’t fluctuate too dramatically, and landlords face less onerous re-tenanting costs on turnover. As such, lenders favor industrial and will continue to seek this property type in Portland.

As for retail properties, credit is generally the attraction for lenders, but in terms of performance, the market is bifurcated. The market has fared well at the two ends of the spectrum with both luxury retail and value discounters swimming in profit while the middle market treads for survival. Lenders will often underwrite, size the loan and price the rate based on these evaluations. Portland is considered an ‘under retailed’ market, so more supply could be absorbed.

From a lending standpoint, office properties are categorized as either urban or suburban. This may be a common distinction, but is representative of a range in risk for lenders. In general, urban office properties are less risky. After all, downtown Portland remains a hot commodity with low vacancies, rising rents and high demands. On the contrary, suburban office properties are more risky depending upon their location. Location is critical, and value is based on proximity to transportation and employment centers. During the market downturn, too many tenants downsized, leaving landlords with big re-tenanting costs with zero to little prospective replacement options. Today, lenders prefer suburban business parks with rents that are at current market rate or lower, and with a diversified rent roll. Even then, lenders exercise caution with a typical max loan of 65% or less (versus standard 70 to maybe 75%) of perceived value.
Though each property type is assessed differently by lenders, the overall conditions are pretty fantastic. Again, the main tenets supporting this idyllic environment are all working together. With a surge in capital, low U.S Treasury yields and low interest rates, and a steady economic recovery fueling strong commercial real estate fundamentals, commercial real estate borrowers can enjoy this panacea… for now.

Principal, Director of Portland Production Blake Hering, Jr. specializes in arranging financing for commercial properties at Norris, Beggs & Simpson Financial Services, a commercial mortgage banking company. Contact him at 503-223-7181 or bhering@nbsfinancial.com

Wednesday, September 3, 2014

NBS Financial Arranges $7.4M in Acquisition Financing

NBS Financial Services’ Principal Mike Wood and Associate Finance Officer Austin Johnson have secured $7.4 million in acquisition financing for the Market Square Building, a 45,247 square foot historic property in downtown Seattle, Washington. NBS Financial represented both the lender as well as the borrower, 1415 Western, LLC.

NBS Financial was able to deliver a quick closing date within 35 days of application. However, the fast turnaround was not without its share of obstacles. The building will incur significant tenant rollover within the next three years. In addition, the financing was at a high price per square foot with an aggressive cap rate. The deal required a lender familiar with the local market.

“This is a quintessential Seattle building,” Mike Wood explained. “The lender was confident in potential rental growth when the tenants’ leases expired.”

Market Square was built in 1908 at 1415 Western Avenue in the heart of the Waterfront district. Only two blocks from Pike Place Market, the creative office building has undergone extensive renovations in recent years. 
Market Square

Thursday, August 21, 2014

NBS Financial Secures $26.7M for State Leased Office Building

NBS Financial Services Associate Vice President Jeff Henderson and Associate Finance Officer Zack Goodwin have arranged $26.7 million in permanent financing for Town Center East III, a 5-story 157,625 sf building in Tumwater, WA. NBS Financial represented both the lender as well as the borrower.

The office property was built in 2006 as part of a greater campus occupied by the State of Washington. Although a small portion of vacancy remains in the building, the lender was comfortable that it will be 100% leased within the next 18 months.

Located at 243 Israel Road in Southeast Tumwater, Town Center East III is approximately 5 miles from the state’s capital, Olympia.
  Additional terms were not disclosed.
Town Center East III

Monday, August 4, 2014

NBS Financial Secures $20.75M

NBS Financial Services’ Principal Mike Wood and Associate Finance Officer Austin Johnson have arranged $20.75 million in financing for the Esterline building, a 216,183 sf Class A manufacturing property in Everett, Washington. NBS Financial represented State Farm Insurance Co., a lender based in Bloomington, Illinois. Capstone PF, LLC was the borrower.

The successful transaction was not without its challenges. Foremost, the borrower was seeking a long-term, fully amortizing loan for a non-investment grade tenant. The deal was also a high loan per square foot at approximately $95. Additionally, the lender’s collateral was on an unsubordinated ground lease with Snohomish County, which is a typical deterrent for many lenders.
The Esterline Building

“A single tenant deal obviously carries more risk, but any initial hesitation by the lender was overcome by the strong sponsorship and the institutional grade quality of the building,” explained Wood.

Built in 2009, the Esterline building is LEED certified and features 50,000 sf of ground-floor office space, six loading docks and 26-foot clear heights. The property is 100% occupied by the manufacturer, Korry's Electronics, a subsidiary of Esterline. The Esterline building serves as their headquarters.

“The lender was not only comfortable, but confident in the Esterline building’s enduring stability in the market. It was an attractive investment,” said Wood.

Wood was able to structure the loan with a 20-year term and 20-year amortization and the borrower locked an interest rate in the 4 percent range. 

Wednesday, July 16, 2014

NBS Financial Arranges $41.7M for First Spec Office Building in PDX Post-Recession

NBS Financial Services President Ken Griggs and Finance Officer Paddy Ryan have secured $41.74 million in permanent construction financing for Pearl West, Portland’s first speculative office building post-recession. NBS Financial represented the lender, Washington Capital Advisors, a pension fund advisor for labor unions. Walter C. Bowen of BPM Real Estate Group is the developer, and BDC/NW Irving, LLC is the borrower.

Washington Capital Advisors’ involvement was imperative for the nine-story, 154,011 sf office building in becoming a reality.

Pearl West
“Funding was provided through various union labor pension funds represented by Washington Capital Advisors,” Ken Griggs remarked. “Washington Capital Advisors recognized Pearl West as a secure investment that will protect and grow union pensions. Another positive for this project is the creation of local union jobs for the city.”

With fundamentals of a tightened office market underscoring a strong need for immediate new development, the proposal for Pearl West was announced in January 2014. Though Pearl West is the first new office project to break ground post-recession, competition is certain. Over the past 12 months, Portland’s healthy economy has attracted many industries, especially creative businesses which are projected to bulk up the majority of the local job market over the next decade. Accommodating this surge in growth was limited by little to no new construction in the Central Business District (CBD). Thus traditional office buildings have been forced to incentivize their space to remain competitive and deter tenants’ flight to the suburbs. Central city office vacancy has only tightened with NAI Norris, Beggs & Simpson reporting a robust 8.15% for the Pearl District during Second Quarter.

The Class A office building, featuring ground floor retail and cutting-edge amenities, is slated to complete by early 2016. The half-block building corners Irving Street, which is reserved for pedestrian-only traffic and serves as an arterial vein into the heart of the Pearl District and Downtown Portland. Pearl West has already secured two lead tenants and its lease appeal is gaining momentum well before its ground breaking ceremony on July 18.

Thursday, July 10, 2014

Fourth & Pike Building Receives $29.5M

NBS Financial Services Associate Vice President Jeff Henderson and Associate Finance Officer Zack Goodwin have secured $29.5 million in permanent financing for the Fourth & Pike Building, a 132,326 gross sf office building located in the heart of Seattle’s central business district. NBS Financial represented both the lender, Redwood Commercial Mortgage Corporation, as well as the borrower, Mayfield Management Company.

    Jeff Henderson     Zack Goodwin    
The Fourth & Pike building was purchased in 2008, and after undergoing major renovations, is now 95% occupied. 

“Mayfield Management Company’s high quality repositioning efforts and prime location garnered considerable interest,” Henderson said, “and Redwood Commercial Mortgage Corporation proved to be the best fit for the borrower’s goal."
Fourth & Pike Building

Thursday, July 3, 2014

NBS Financial Promotes in PDX and Seattle

NBS Financial Services is pleased to announce the promotions of Matt Illias and Austin Johnson with their advanced titles as Associate Finance Officers.

With a strong background in banking, Matt joined NBS Financial Services in 2013. During his tenure, Matt’s exceptional skills in research and analytics have been integral to the team’s achievements.


Austin was a welcome addition to NBS Financial Services in 2013 as well, with extensive experience in commercial real estate. Austin’s successful contributions have been a reflection of his remarkable attention to detail and resolve to excellence.



Tuesday, May 13, 2014

NBS Financial Completes $8.5M Refi

NBS Financial ServicesMike Wood, Principal and Financial Analyst Austin Johnson have arranged $8.5 million in refinancing for Kirkland Waterfront Market, a 23,957 sf mixed-use building in Kirkland, Washington. NBS Financial represented Homestreet Bank, a lender based in Seattle.

Located a block from scenic Lake Washington at 130 South Lake Street, Kirkland Waterfront Market features both ground level retail and 2nd floor office space. With the property 30% owner occupied, and the fact that the borrower needed a full leverage loan at a very high loan per square foot, it was a challenge to get lenders on board. There was additional risk in the fact that the collateral was part of a condo structure.

Despite these obstacles, Wood and Johnson were able to successfully structure a 10-year fixed rate term and 30-year amortization.

“Kirkland Waterfront Market was not a typical investment for our lenders because of its mixed use space and the condo structure,” Wood remarked. “But as a local lender, Homestreet Bank understood the irreplaceable location and the strength of the market. We were able to provide full proceeds with pre-payment flexibility at a competitive rate.”
Kirkland Waterfront Market

Wednesday, April 23, 2014

NBS Financial Secures $21.25M for a Series of Residential Properties in Salem

Vista Pointe Luxury Apartments
NBS Financial Services Principal and Director of Portland Production Blake Hering,Jr. and Financial Analyst Matt Illias have arranged $4.1 million in refinancing for Vista Pointe Luxury Apartments, marking the third transaction in a series of residential properties for a local borrower in Salem, OR. NBS Financial will also service the loan for the lender, life insurance company Genworth Financial.

The string of transactions started in 2013 with NBS Financial securing $14 million for Gateway Village Apartments, which was followed up in 2014 by $3.15 million for newly constructed Reed Townhomes. The latest $4.1 million refinance for Vista Pointe Luxury Apartments completed the set of deals that total $21.25 million and over 400-units of residential properties within a one-mile radius.

“The projects all vary in size and amenities for a range of renters and price points. The borrower was able to take advantage of extremely attractive interest rates with all three refinances,” Hering said. “This last loan closed in just 37 days, which was quite remarkable in today’s often ‘process-heavy’ environment.”

Terms spanned from modest to full leverage for the three projects, but all the loans consisted of low fixed rates with 30-year amortization schedules. 

Tuesday, April 15, 2014

NBS Financial Arranges $8.48M in Financing for Baxter Auto Parts

Baxter Auto Parts
NBS Financial Services President Ken Griggs and Finance Officer Paddy Ryan have arranged $8.48 million in permanent financing for a portfolio of seven retail properties totaling 87,819 sf owned by Baxter Auto Parts.

Rooted in the Northwest since 1936, family owned business Baxter Auto Parts sought local support in funding their portfolio. Financing was placed through a Portland-based credit union and a cash-out loan. It was a simple and low-cost process, and as a repeat borrower from NBS Financial, Baxter Auto Parts had resolute confidence in their ability. Terms included an approximate 70% loan-to-value on a five-year term with a 25-year amortization schedule.

“This deal truly represented the strong capabilities of our local partners,” Griggs said. “The loan provided flexibility to Baxter Auto Parts with working capital and it increased their business banking capacity because their real estate was no longer leveraged by their bank.”

With 35 stores spanning the Pacific Northwest and Northern California, Baxter Auto Parts is a prevalent name in the auto parts industry. 

University District Building Secures $9M Refi

NBS Financial Services President Ken Griggs and Finance Officer Paddy Ryan have secured $9 million in refinancing for the 79,513 sf University District Building in Seattle, WA. Though the loan originated in Portland, Griggs and Ryan also collaborated with NBS Financial Services’ Mike Wood, Principal and Director of Seattle Production.  NBS Financial represented the lender, Riversource Investments.

University District Building in Seattle
Located in the heart of the ‘U District’ and significantly occupied by the University of Washington, the five-story building shares in the charm of its eclectic neighborhood full of shopping, restaurants and historic architecture. Its strong community presence made its option to refinance all the more attractive to Riversource Investments.

“This building garners a lot of confidence because of its prime location and affiliation,” Griggs said. “It was a straightforward cash-out refinance which allowed the University District Building owners to reinvest in other opportunities.”

NBS Financial was able to structure the loan with a ten year term and 25-year amortization and the borrower locked in a sub 5 percent interest rate.

NBS Financial Completes $5.6 Refi

NBS Financial ServicesMike Wood, Principal, Director of Seattle Production and Financial Analyst Austin Johnson have arranged $5.6 million in nonrecourse refinancing for Nelson Johnson 201, a 87,600 sf Class-A warehouse distribution center. CMFG Life Insurance Company, located in Madison, Wisconsin was the lender.

Nelson Johnson 201
Nelson Johnson Development, an experienced local developer, constructed this project in 2008 and had 75% of the project leased upon its completion. Placing permanent debt after construction proved to be challenging due to the weak leasing market during the Great Recession and existing remaining vacancy. However, reaching stabilization in August 2013, NBS Financial was able to go to market and CMFG Life Insurance Company sought the attractive mortgage opportunity with a competitive quote.

 “In order to refinance, Nelson Johnson 201 needed a lender who understood the strength of the Eastside Industrial market and that its former leasing challenges stemmed from weathering the recession,” Wood said. “CMFG Life Insurance Company was the perfect fit.”

With the building 100% occupied and a sufficient remaining term on the tenants’ leases, Wood and Johnson were able to structure a 10-year fixed rate term and 25-year amortization.

Tuesday, March 4, 2014

NBS Financial Promotes in Portland

Mick Stapleton
NBS Financial Services awarded advanced titles at the company’s annual Awards Banquet February 1. In Portland, Mick Stapleton was named Finance Officer. Mick Stapleton began his career with NBS Financial Services in 2006, and works closely with our highly qualified loan origination staff in attaining the borrowing and investment needs of our clients, which include major life companies, conduits, REITs and pension funds.

NBS Financial Promotes in Seattle

NBS Financial Services awarded advanced titles at the company’s annual Awards Banquet February 1. Jeff Henderson was named Associate Vice President and Zack Goodwin was named Associate Finance Officer.
Jeff Henderson joined NBS Financial Services in 2009. He brings a strong commercial real estate background to NBS Financial’s growing Seattle office, where he originates loans on all types of commercial properties around the Pacific Northwest.
Zack Goodwin joined NBS Financial Services in 2013. He helps satisfy the capital needs of our clients through exclusive relationships with life insurance companies, conduits and various other lenders.

Zack Goodwin
Jeff Henderson

Tuesday, February 18, 2014

NAI NBS Announces Top Producers of 2013

From Left to Right: Jennifer Medak, Sean Turley, Robert Black, Ken Griggs, Becky Yarger, John Medak, Denis O'Neill
Norris, Beggs & Simpson Companies announced its top producers of 2013 at the commercial real estate firm’s annual awards banquet February 1.
Rounding out Norris, Beggs & Simpson’s Top 5 Producers, multifamily investment sales broker Robert Black was named #1 in the brokerage division for the second consecutive year. Office brokers and siblings Jennifer Medak and John Medak tied for #2. Downtown office broker Sean Turley came in 4th, followed by industrial broker Denis O’Neill.
Becky Yarger, who manages an impressive portfolio of several downtown office buildings, was NAI NBS’ Property Manager of the Year, and Ken Griggs was NBS Financial Services’ Finance Officer of the Year. Ken Griggs was also the top producer in the entire company.
The event also highlighted production across the company in 2013. NAI Norris, Beggs & Simpson’s brokers completed 762 deals worth over $276.7 million, sold 920,000 sf and 344 acres, and leased 3 million sf. Its property managers managed 10.5 million sf, 147 acres and 850 residential units all valued at $1.5 billion. NBS Financial Services originated 60 loans worth over $447 million, and the loan servicing department serviced approximately 400 loans valued at $1.8 billion.

Thursday, January 23, 2014

NBS Financial Arranges $43.57M in Financing for Cedar Hills Crossing



NBS Financial ServicesTodd Harding, Senior Vice President and Mick Stapleton, Senior Associate Finance Officer have arranged $43.57 million in permanent financing for Cedar Hills Crossing, a 464,234 sf retail property sprawling 37.07 acres in Beaverton. Harding and Stapleton represented both the lender, Nationwide Insurance, as well as the borrower.

Center Developments OR, LLC is a local borrower based in Vancouver, Washington and originally built Cedar Hills Crossing in the 1960s. The mega retail center underwent remodeling in 2005 and boasts several major retailers including Ross Dress for Less, Best Buy, Powell’s Books, New Seasons and Winco.


“Cedar Hills is unique in that it offers two different grocers, Winco and New Seasons,” Harding said. “But that’s a testament to it being a fantastic mall in a great location.”


Ideally located just 2 miles from Nike in the heart of Beaverton, Cedar Hills Crossing is the go-to shopping destination of the area. Center Developments OR, LLC was able to lock interest rates early with Nationwide for the loan’s 10-year term.

Thursday, January 2, 2014

NBS Financial & Newmark Realty Capital Secure $9M for 19th & Mercer Apartments

NBS Financial ServicesMike Wood, Principal, Director of Seattle Production and Newmark Realty Capital’s Mike Taylor, Principal co-brokered $9 million for the 19th& Mercer Apartments, a new 50-unit apartment building in Seattle. The loan was originated by Wood and Taylor working in conjunction for both the lender, State Farm Insurance Company and the borrower, 19th & Mercer Partners, LLC.

19th and Mercer Apartments features ground-floor retail including a restaurant, bakery and ice-cream shop. The building also showcases contemporary architecture using cedar and steel, two hallmark resources of the region. It’s uniquely Pacific Northwest design and exceptional location in Capitol Hill, Seattle made it an idyllic investment for State Farm.


“State Farm Insurance Company was able to do a forward rate lock, which many other types of lenders don’t do,” Wood said, “”The borrower was able to secure a very attractive rate in advance of funding. The loan structure also allowed them to draw additional loan proceeds upon the property’s stabilization and lease-up.”

The creative structure of the initial funding was through a certificate of occupancy, but there was no pre-leasing requirement. The loan has a 10-year term with 30-year amortization.


NBS Financial Secures $10.75M for Acacia Springs

Norris,Beggs & Simpson Financial Services President Ken Griggs and Finance Officer Paddy Ryan have arranged $10.75 million for  Acacia Springs, a 161-unit assisted living facility in Las Vegas, Nevada.
Griggs and Ryan represented the borrower, Walter Bowen, of BDC Las Vegas, LLC. As a veteran client of Norris, Beggs & Simpson Financial, Bowen has been successfully developing, owning, operating and managing senior properties for over 30 years.
 “Acacia Springs was an underperforming asset before Bowen purchased it,” Griggs said. “With Bowen’s expertise and experience, he was able to stabilize the property and make it an attractive investment.”
Financing was placed through a union labor pension fund as a non-recourse, cash-out loan. Terms included an approximate 65% loan-to-value on a five-year term with a 25-year amortization schedule.