Commercial Real Estate Loans & Investment Sales

Apartment Development Heats Up on U.S. Coasts

Article by Michael Corkery via the RealEstate Journal

Many multifamily real-estate investment trusts have been ramping up their development pipelines, but increasingly are building in only a handful of U.S. cities along the coasts.

About 96% of the new apartments being built by REITs at the end of the fourth quarter were concentrated along the East and West coasts. That compares with about 87% in the fourth quarter of 2004.

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For more information on Apartment Loans from Pacific Security Capital, visit http//www.pacificsecuritycapital.com or call 1-800-844-6085.

An Investor Asks: Where Is The Condo Market Headed?

Article by June Fletcher Via RealEstate Journal

Question: What information do you have about the state of the condo market and the expected trends in the next few years? This would be very helpful to me as a real-estate investor.

-- Douglas Menelly, Kew Gardens, N.Y.

Douglas: The condo market is a lot like Elton John. It cycles in and out of fashion, and about as often and as spectacularly.

And for now, condos are at center stage, springing up in places you wouldn't expect, like Omaha, Neb., and Charlotte, N.C.

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To learn more about apartment loans from Pacific Security Capital and its preferred client program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085.

Apartment Vacancy Rate Continues to Decline

Article by Michael Corkery Via RealEsate Journal

The nation's apartment market continues to climb out of a four-year slump, posting another quarter of declining vacancies and rising rents.

The vacancy rate for the top 67 metropolitan apartment markets in the U.S. fell to an average of 6.4% in the second quarter, from 6.6% in the first quarter, according to new statistics from REIS Inc., a New York-based real-estate research firm. Average rents also increased slightly.

It's good news for apartment owners, who have weathered years of sagging rents and mounting vacancies. Since 2001, the apartment market has been hurt by weak job growth and the flood of Americans taking advantage of low interest rates to buy homes instead of renting apartments.

Researchers say there's now a healthier balance of supply and demand. The number of apartments occupied by tenants rose by 10,103 units in the second quarter, after an increase of 3,584 in the first quarter.

A major factor driving these numbers is condo conversions. Developers are rushing to turn rental apartments into condominiums, thus reducing the rental supply. Fewer new apartment buildings are being built because most new construction is giving rise to condos.

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For more information on Apartment Loans and Condo Financing, please contact Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085.

Pacific Security Capital Senior Director Reveals Next Big Thing in Apartment Loans & Condo Development

Los Angeles, CA, September 22, 2005 –www.pacificsecuritycapital.com - Pacific Security Capital (“PSC”), a leading commercial real estate investment bank and provider of commercial real estate loans, announced today that Senior Director, Steve Otos, will be participating in a panel on Condo Development at the Apartments 2005 conference, September 27, Westin Century Plaza, Los Angeles.

Otos will join leading condo industry experts in a discussion on “The Next Best Thing: What's Driving the Boom in Condo Development & Conversions.”

“There has been a great boom in condo activity over the past few years,” said Steve Otos, Senior Director of Pacific Security Capital, “however, many lenders are now concerned about the future stability of the condo market.”

Pacific Security Capital believes that these concerns emanate from lenders who have been least active and have less knowledge about the asset class.

“The bottom line is that good projects from good sponsors will always receive interest from the capital markets,” said Otos.

According to Otos, projects that encompass the following will be successful in finding financing, even with the caution currently being expressed by some in the commercial real estate lending community:

•    Sponsors with Successful Track Records
•    Adequate Sponsor Equity Contribution
•    Fully Entitled Projects
•    Market Feasibility
•    Strong Track Record in Marketing
•    High percentage of pre-sales

Otos will share the latest trends in apartment loans/condo financing and his thoughts on key drivers of the condo boom during the panel session at Apartments 2005.

Panel:        “The Next Big Thing: What’s Driving the Boom in Condo Development &   Conversions”
Date:        Tuesday, September 27, 2005
Time:        3.25 pm – 4.15 pm
Location:    Westin Century Plaza, Los Angeles, CA

To attend Apartments 2005, register online at http://www.realestateoutlook.com/registration2.htm

To learn more about apartment loans from Pacific Security Capital or its preferred borrower program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085.
                                                                                    
About Pacific Security Capital
Pacific Security Capital is a leading commercial real estate investment banking firm providing commercial real estate loans, structured finance, investment sales and advisory services. The combination of direct lending, advisory, intermediary, corporate and professional services, syndication, investment sales and development services consistently allow PSC to rank among the leaders in the industry. PSC is headquartered in Beaverton, Oregon with other offices in major markets in North America and Europe. More information about the company can be found at www.PacificSecurityCapital.com

For more information about Apartment Loans from Pacific Security Capital, please visit www.pacificsecuritycapital.com or call 1-800-844-6085.

Steve Otos to Participate in Condo Panel at Apartments 2005

Pacific Security Capital, Senior Director, Steve Otos, will participate in the Condo Panel at the upcoming Apartments 2005 conference. 

"The New Big Thing: What's Driving the Boom in Condon Development & Conversions"
Tuesday, September 27, 2005
3.25 pm - 4.15 pm
The Westin Century Plaza, Los Angeles, CA

Register for Apartments 2005 at http://www.realestateoutlook.com/registration2.htm

For more information about Apartment Loans from Pacific Security Capital, please visit www.pacificsecuritycapital.com or call 1-800-844-6085.

Commercial Real Estate Lender Evaluates Whether the Condo Craze Over or is Just Heating Up

Pacific Security Capital, a leading Commercial Real Estate Investment Bank, has noticed that over the past few years condo activity has been hot, however many lenders are now concerned about the future stability of the condo market.

Beaverton, OR, August 8, 2005 -- http://www.pacificsecuritycapital.com -- Pacific Security Capital (“PSC”), a leading commercial real estate investment bank, headquartered in Beaverton, Oregon, has noticed that over the last two years there has been so much condo activity that many commercial real estate lenders are starting to express concern over the future stability of condo markets.

Mike Myatt, executive managing director with Pacific Security Capital explains that “some lenders have recently found themselves over allocated in condominiums as a result of the recent activity and have therefore become wary of all but the best opportunities.”

Myatt adds, “While the best opportunities (typically in Florida, Southern California and select destination markets) are still attractive, developers in smaller markets are finding condos much more difficult to finance in recent months. Additionally some of the recent trends in the commercial real estate market do suggest some legitimacy surrounding concerns being voiced by underwriters. The single greatest concern is the extremely high prices being paid by condo converters for existing multi-family projects. When a sponsor purchases apartments at a price that won't allow the property to operate as a stabilized for rent property any negative change in market conditions could see conversion speculators being underwater in their properties.”

Warning signs aside, the reality is that many of the commercial real estate lenders expressing concern over the current state of affairs in the condo market are the lenders that have been the least active and have less knowledge about the asset class. Lenders familiar with the condo market are not as concerned about the opinions of their peers, but rather with the fundamentals of the projects and sponsors they underwrite.

Projects that demonstrate that they underwrite according to the following guidelines should be able to find financing even with the caution currently being expressed by some in the commercial real estate lending community:

1.    Sponsor Suitability: Sponsors that have a successful track record of developing other condo projects will be looked upon more favorably than those who are building their first project. Having net worth and liquidity in reasonable proportion to the project size always helps as well.

2.    Capital Structure: Projects that have a sufficient sponsor equity contribution will receive more interest than those projects looking to move aggressively up the leverage curve.

3.    Entitlements: Projects that are fully entitled and permit ready will attract more interest than early stage projects.

4.    Market Feasibility: How many units are you building vs. how many competitive units are currently available for sale. How many competitive units are coming online during the time period that your project is being built and how many units does the market absorb each year? What are your per square foot sales prices, how do they compare to the market, and is your location, construction quality and amenity package in line with that of comparably priced projects?

5.    Marketing: Who is going to sell your units and do they have a strong track record of selling condos within the market you are building in?

6.    Presales: What type of presales have you been able to generate? The higher the percentage of presales, the more are lender interest you will attract.

The bottom line is that good projects from good sponsors will always receive interest from the capital markets.

About Pacific Security Capital
Pacific Security Capital is a leading commercial real estate investment bank providing commercial real estate loans, structured finance, investment sales and advisory services. The combination of direct lending, advisory, intermediary, corporate and professional services, syndication and acquisition services consistently allow PSC to rank among the leaders in the industry. PSC is headquartered in Beaverton, Oregon with other offices in major markets in North American and Europe. More information about the company can be found at www.PacificSecurityCapital.com

For information about Pacific Security Capital apartment loans contact us at 1-800-844-6085

Executives See Improving Conditions, Says NMHC Survey

Article by Sule Aygoren Carranza Via Multi-Housing Forum (subscription)

The latest quarterly survey of apartment market conditions from the National Multi Housing Council reveals that fundamentals are picking up in almost every US market. The April study showed that quarter-over-quarter improvements for the third quarter in a row and just the fourth time in the survey’s six-year history, according to the Washington, DC-based organization. Full article >

For information about apartment  loans, contact Pacific Security Capital at 1-800-844-6085.