NBS Companies Announce Top Producers of 2014

From Left to Right, Front Row: Jennifer Medak, Ken Griggs, John Medak, Traci McCauley;
Back Row: Robert Black, Scott MacLean, Sean Turley 

Norris, Beggs & Simpson Companies announced its top producers of 2014 at the commercial real estate firm’s annual Awards Banquet on January 24.

Rounding out NAI Norris, Beggs & Simpson’s Top 5 Producers, Senior Vice Presidents Jennifer Medak and John Medak, who specialize in office sales and leasing, earned top honors as #1, and were also the company’s leading dealmakers for the year, which is measured by the number of transactions closed. Multifamily investment sales broker and Senior Vice President Robert Black was named #3, having been the Top Producer for the past two consecutive years. Senior Vice President Scott MacLean, an expert in the leasing and sales of industrial/flex properties, ranked 4^th and downtown office broker and Senior Vice President Sean Turley came in 5^th.

Vice President and Certified Property Manager Traci McCauley, who manages an impressive portfolio of several industrial properties, was NAI NBS’ Property Manager of the Year. She previously won this honor in 2007 and 2008.

President Ken Griggs was NBS Financial Services’ Finance Officer of the Year, as well as the overall top producer in the entire company.

The event also highlighted production across the company in 2014. NAI Norris, Beggs & Simpson’s brokers completed 755 deals worth over $413.3 million, sold 3.2 million sf and 182 acres, and leased 4.2 million sf. Its property managers managed 12 million sf, 147 acres and 1,334 residential units all valued at $1.8 billion. NBS Financial Services originated 75 loans worth over $560 million, and the loan servicing department serviced approximately 382 loans valued at $1.8 billion.

As a Partner in the company, Ken Griggs has been in the real estate investment industry since 1984. He joined NBS Financial Services in 1993. In 2014, he closed 28 loans grossing more than $249 million. This includes the $41.74 permanent construction financing for Pearl West, Portland’s first speculative office building post-recession.

John Medak began his career at NAI Norris, Beggs & Simpson in 1998 after working for CB Richard Ellis in the Bay Area. He then teamed up with his sister, Jennifer Medak, who joined the firm in 1999 after an established career with Colliers International. Together, they’ve been honored as Top Producers multiple years and in 2014 they grossed approximately $86 million in total deal consideration. They completed Umpqua Bank’s 70,000 sf lease renewal, Interface Engineering’s sublet at First and Main and also represented the landlord for over 100,000 sf at Nimbus Corporate Center.

Robert Black has been a member of NAI Norris, Beggs & Simpson’s Capital Asset Group since 1999. He was Top Producer in 2012 and 2013. In 2014, he brokered the sale of the historic 52,379 sf Sovereign Hotel as well as the $1.64 million dollar sale of the Overland Warehouse Company building. It was a very successful year as he grossed approximately $18 million in total deal consideration.

Scott MacLean joined NAI Norris, Beggs & Simpson in 1996 and has since represented many large industrial tenants. In 2014, he grossed approximately $118 million in total deal consideration which included his Rite Aid Lease renewal for 500,000 sf and his $3.6 million dollar sale of NW 16^th & Overton.

Sean Turley joined NAI Norris, Beggs & Simpson in 1999 and has been a frequent Top 5 Producer. He was recognized as the company’s Top Producer in 2010. In 2014,  he brokered the 90,000 sf lease renewal of ADP Plaza and the 10,000 sf lease for Gordon & Rees Law Firm at Bank of America Financial. 

Traci McCauley joined NAI Norris, Beggs & Simpson in 2000. She is a Certified Property Manager (CPM) and a Certified Green Broker, as well as a licensed broker in Oregon and Washington.  As a three-peat Property Manager of the Year, she oversees approximately 2 million sf of industrial properties.

NBS Financial Delivers $11.3M Refi

NBS Financial Services’ Senior Vice President Wally Harding and Finance Officer Mick Stapleton have arranged $11.3 million in refinancing for Northpointe Office Plaza, a 108,432 sf office building. NBS Financial represented the lender, Genworth Life Insurance, as well as the borrower, Northpointe Office Building, LLC.

Northpointe Office Plaza 

Built in 1995, Northpointe Office Plaza is located at 605 E Holland Avenue, just north of downtown Spokane and part of the growing Wandermere suburb. It is fully leased with both traditional office and medical users. Over the past few years, Wandermere has become a major attraction for new office and retail development.

“The borrower had an existing loan maturing soon,” explained Wally. “Northpointe Office Plaza is a typically sought after mortgage investment for many of our lenders, especially newer properties in very good locations. As Genworth’s leading national producer for 2014, we were able to deliver the refinancing with quick turnaround.”

With the building 100% occupied and a sufficient remaining term on the tenants’ leases, Harding and Stapleton were able to structure a 20-year term and 20-year amortization.

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.

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. 

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

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