NBS Financial Services Senior Vice President Wally Harding and Senior Associate Finance Officer Mick Stapleton have arranged $8,234,000 in refinancing for The Retreat at Union Square, a 126 unit luxury residential property in Boise, Idaho. Financing was placed through the Fannie Mac DUS program for long-time Boise developer, Union Retreat, LLC.
The refinance paid off the construction lender to provide long-term financing with a favorable interest rate. Harding and Stapleton secured the refinance of the construction loan with interest-only for the first 5 years over a 10-year term and a 30-year amortization.
The Retreat at Union Square is a new, exceptionally built Class A residential property offering spacious 1-3 bedroom homes equipped with a community center, pool and spa. The complex is conveniently located in Southwest Boise with quick accessibility to downtown, job centers and shopping.
More than 3,200 CEOs and top-level managers in Oregon and Southwest Washington were surveyed to determine the Most Admired Companies. It is an incredible achievement that NBS placed in the top ten again this year. This would not be possible without all of your hard work and outstanding contributions to this company. Be sure to pat yourself on the back for being instrumental in this success.
Many of NAI Norris, Beggs & Simpson’s property managers are active members of the Institute of Real Estate Management (IREM), and were recognized during IREM’s Annual Awards Ceremony. Traci McCauley received the 2013 CPM of the Year, Stephanie MacPherson received the 2013 CPM Candidate of the Year, and NAI Norris, Beggs & Simpson was named the 2013 AMO Firm of the Year.
A number of our property managers will hold leadership positions in IREM during 2014:
- Stephanie MacPherson – Vice President of Finance
- Traci McCauley- Vice President of Member Services
- Monique Clouser- Community Service Committee Chair
- Nutan Engels- Income & Expense Committee Chair
Norris, Beggs & Simpson Companies is proud to announce the addition of Katie Brotherton to the Advertising and Communications Department as Public Relations and Marketing Specialist, J. Clayton Hering announced.
Brotherton will be responsible for handling press relations and communications for NBS.
Originally from Ohio, Brotherton graduated with a master of arts in English literature from Xavier University as well as a bachelor of arts in creative writing from Miami University. Brotherton’s passion for language was the impetus to move to Portland and flex her professional writing capabilities. Though her background is primarily academic, Brotherton believes her specialty provides an edge especially within the evolving state of public relations.
“Similar to the commercial real estate properties Norris, Beggs & Simpson represents, language is transformative and creates community. My interest is mastering impactful representation of the company while collaborating with the media and to create lasting influence,” Brotherton said.
Brotherton is thrilled to be welcomed as part of the exceptional Advertising and Communications team at Norris, Beggs & Simpson. She aspires to contribute to the company’s legacy and culture in a creative and positive way.
State Farm Life Insurance, located in Bloomington, Illinois, is the lender. The transaction proved to be challenging in regards to the fact that it was a single non-investment grade tenant requiring a high loan per square foot at approximately $185. This is a sharp contrast to the typical $100-150 valuation for industrial product, Wood said. In addition to these challenges, FedEx Corporation didn’t guarantee the lease as the tenant is only a subsidiary.
Despite these challenges, Wood was able to structure the loan with a 20-year term and 20-year amortization and the borrower locked in a sub 4 percent interest rate.
“The borrower requested a long-term fully amortizing loan in order to lock-in a low interest rate and avoid refinancing,” Wood said. “If the buyer sought the same deal in the current market, the rate today would be an estimated 100 basis points higher.”
Norris, Beggs & Simpson Financial Services President Ken Griggs and Finance Officer Paddy Ryan have arranged a $35 million refinance loan for Von Karman Plaza, a 241,539 sf retail property in Irvine, California.
Harsch Investment Corp. is the underlying borrower of Von Karman, LLC and ING Investment Management, out of Atlanta, is the lender.
Prior to the refinancing, the Von Karman Plaza was in the midst of repositioning itself due to several retailers vacating large blocks of space, including Sam’s Club. After major renovations and reintroduction of the property to the market, the borrower was able to bring in new anchor tenants like Wal-Mart, filling up a majority of the property’s vacancy. At the time of funding, a block of unoccupied space remained, but ING had confidence in filling the outstanding occupancy and was able to structure a solution. The owner seized the opportunity to refinance, which then would help fund the final renovations.
“Even though there was a considerable vacancy, ING Investment Management was attracted to the borrower’s efforts to reposition the property and its leasing efforts to date,” Griggs said. “ING was confident that the borrower would fill the remaining vacancy.”
Griggs and Ryan were able to structure a favorable refinance locking in a low interest rate for a 10-year term and 30-year amortization with an attractive level of proceeds to meet the borrower’s needs.
I spent Halloween visiting my daughter and son-in-law at the home they recently purchased in close-in Northwest Portland. Walking around their neighborhood, I was amazed at how many young families with children lived in the area. On one block alone, there were four sets of couples who worked at Intel. Young families like my daughter’s and her neighbors would previously have flocked to the suburbs, but today they are much more likely to choose an urban lifestyle in an area like Northwest or the close-in Eastside.
This demographic shift to close-in living is no longer just a trend, but is the new normal. People of all ages are just not as interested in the suburban lifestyle, and are willing to sacrifice financially to live an urban lifestyle. They are forgoing features like more square footage, yards, garages and well-funded schools, which are readily available in the suburbs, to live near amenities like restaurants and arts and entertainment options.
They’re paying for the convenience and amenities of urban living. For instance, RMLS’ September reports on the single-family market showed a median sale price of $292,500 in NE Portland, while the median price of a home in Beaverton and Aloha was $251,500, and $238,100 in Hillsboro and Forest Grove. A recent study by the chief economist at real estate website Trulia also examined the urban population shift. In Portland, urban home prices have grown 15.7 percent year-over-year, while suburban prices are up just 12.4 percent in the same time period.
Renters are also paying a premium for urban spaces, as NAI Norris, Beggs & Simpson’s Third Quarter reports show. Some renters in prime locations are paying nearly twice the amount per square foot for a close-in location as compared to the suburbs. Overall price per square foot for an apartment downtown (which includes the Pearl/Northwest) is $1.80, compared to 95 cents in Beaverton/Aloha. When price per square foot is so high, the trend toward micro-units makes perfect sense.
No matter whether people live in urban or suburban areas, retailers continue to adapt to the new reality of online shopping. Black Friday is generally the don’t-miss shopping day, and is top of mind for retailers at this time of year. This year, however, Adobe expects online shoppers to spend $1.6 million on Black Friday, up 17 percent from 2012, and many online shoppers will not even wait until Black Friday – they’ll start on Thanksgiving.
Amazon paved the way in online shopping, and legions of retailers continue to try to remain competitive with its free shipping. Walmart, for instance, recently announced its foray into same-day delivery from its superstores. Retailers, particularly large-format ones like Walmart, continue to shrink their brick and mortar stores and move more of their sales online.
Retail investors are closely attuned to the new realities of both urban living and online shopping, and these play a major role in their investment preferences and risk analysis. The two retail asset classes that institutional investors are most bullish about today are malls and lifestyle centers. Even as consumers prefer to do some shopping online, malls and lifestyle centers have their niche, as there will always be items that people want to see and feel before buying. Shopping destinations like Bridgeport Village and Clackamas Town Center will continue to draw a critical mass of shoppers.
And even when a traditional retailer at a mall or lifestyle center downsizes, as we’ve been seeing frequently in the past five years, another specialty store will be there to take the additional space. The combination of more traditional department and smaller-format stores, and more boutique-like, specialty stores, creates a synergy that draws shoppers, and the risk for investors is less because of this multi-tenant mix.
In addition to malls and lifestyle centers, investors also understand Portlanders’ preference to shop near their homes, and to spend dollars locally. That’s why they remain interested in convenience shopping, neighborhood centers, urban retail, strip centers and single tenant credit NNN.
Portland’s retail vacancy remains healthy, continuing its downward trend to 6.15 percent during Third Quarter. Strip center and urban retail cap rates are holding steady despite a temporary increase in mortgage rates. Investors are moving to well-located convenience centers in secondary markets like Portland, as the risk profile of multi-tenant properties is so much less.
Portland is uniquely qualified to benefit from the demographic shift and increasing retail investor interest. Its excellent transportation infrastructure is a major asset, and the preference by residents to shop local is helping to strengthen resurgent neighborhoods. 2013 saw increased retail sales volume and price per square foot, and this trend is driven by a surge of private investors and 1031 buyers. 2014 will be even stronger yet.
Vice President Denis O’Neill specializes in retail, investment and special asset sales at NAI Norris, Beggs & Simpson, a real estate brokerage and asset/property management company. Contact him at 503-223-7181 or firstname.lastname@example.org.
A local investor has paid $1.95 million for the 16-unit apartment property at 1407-1419 N. Going Street, in the emerging N. Interstate corridor. NAI Norris, Beggs & Simpson Vice President Robert Black represented both parties.
The 9,180 sf building is on about 40,000 sf of land, with the MAX Yellow Line and I-5 just a few blocks away.
“This is a unique property that has historic charm and appeal and strong occupancy, and will be a great investment in the long term,” Black said.
The Norm, a 12-unit apartment property built in 2012 in Portland’s Alphabet District, has sold to a local investor for $2.1 million. NAI Norris, Beggs & Simpson Vice President Robert Black represented the seller.
Interest in this property was strong due to its high rents, and it garnered multiple offers, Black said. The full-price sale correlates to a competitive $175,000 per unit.
“The Norm’s design, with smaller, more efficient units, is definitely consistent with what renters are seeking, and a very desirable property type for investors,” Black said.
The Norm was built in 2012, and features four studios and eight 1-bedroom, 1-bathroom townhouse-style lofts. The units have many attractive modern amenities, including built in Wifi, granite countertops and energy efficient features.
The property’s location, at 1414 NW 19th Avenue, was a big selling point. It is in the Slabtown neighborhood of the Alphabet District, so residents are close to many amenities on NW 23rd Avenue and the Pearl District, and the future New Seasons at Slabtown Marketplace just a few blocks away.
Apartment vacancy in downtown Portland, the submarket The Norm falls in, is just 1.94% overall, and 1.78% for new units, according to NAI NBS’ recently released Third Quarter reports.
The Prescott, the new apartment building at N. Interstate and N. Skidmore, is currently pre-leasing and set to welcome its first residents in December. With demand for apartments throughout Portland and especially in this area very strong, the building offers renters unique amenities in a prime location.
The building’s 155 apartments are studios and 1- and 2-bedrooms, and residents will have access to a parking garage with more than 100 spaces. 20% of the units are reserved as affordable housing, so renters who meet lower income requirements will qualify for more affordable rents. Apartments are air conditioned and feature washer/dryers, hardwood floors, and large windows with spectacular views of the city and sunsets. They also have the fastest Internet available in Portland, with speeds up to 100 Mbps.
The Prescott’s unique amenities include a dog washing station, pickle ball and bocce ball courts, an outdoor firepit and a workout room. Residents will also enjoy being directly across from a MAX Yellow Line station. The building owners intend to be long-term members of the community and have taken extraordinary care with the quality of the building.
We know that neighbors are eagerly awaiting news of the tenants that will fill the building’s ground-floor retail spaces. While these spaces are not yet leased, the building’s owners are seeking a mix of retailers that will enhance the community, and are especially interested in housing some local businesses.
The Prescott is managed by NBS Multifamily Management. Contact us at (503) 288-2200, or stop by our on-site leasing office, which currently has limited hours. Also stay tuned for news about a grand opening in January, when neighbors will be invited in to meet us and tour the finished building.
We thank you for the warm welcome we have received from our neighbors so far, particularly at the Movie in the Park night. We’re excited for The Prescott to welcome residents and retailers and join the amazing community in the Overlook Neighborhood.