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The volume of CMBS conduit loans liquidated in February retreated sharply, falling 43% from January’s reading. In fact, the February reading was the lowest total since November 2010, according to Trepp LLC.

At $893 million, liquidations were about 32% less than the 12-month moving average of $1.31 billion per month. Since the beginning of 2010, the special servicers have been liquidating at an average rate of about $1.08 billion per month.

In February, liquidations came from 93 loans. This compares to 168 loans that were liquidated in January. The 12-month moving average is 151 loans per month.

The average loan size for liquidated loans was $9.6 million in February. Over the last 12 months, the average size of liquidated loans has been $8.7 million.

The losses from the February liquidations were about $228 million–representing an average loss severity of 25.55%. This was down by more than 14 points from January’s 39.54% reading. February represented the lowest level since March 2011.

The February loss severity reading is well below the average loss severity of 42.92% over the last 26 months, and also below the 12 month rolling average of 42.27%.

Separately, the percentage of CMBS loans paying off on their balloon date posted their second highest reading since December 2008, according to Trepp.

In February, 61.6% of loans reaching their balloon date paid off. Only September 2011 had a better reading since the credit crisis began. That month the payoff level was 64.4%. February marks only the fourth time since late 2008 that the percentage cracked 50%. The 61.6% payoff number was almost 21 points higher than the January reading.

A big part of the surge was due to one class of 2007 loan paying off. The $500 million 9 West 57th Street loan was refinanced in February. That loan by itself represented 27% of the loans coming due.

Real Money: Cornerstone Beats Goal, Raises $546 Million for Property Acquisitions

steve — Thu, 15 Mar 2012 02:16:09 +0000

Additional Money Raisings from: Vornado Realty, Select Income REIT, RAIT Financial, Public Storage, Kimco, KBS and others

By Mark Heschmeyer

March 14, 2012

Cornerstone Real Estate Advisers in Hartford, CT, had a final closing of Cornerstone Real Estate Fund VIII (CREF VIII) with $546 million in capital raised, significantly more than its original $400 million target.

CREF VIII will target property types and markets that Cornerstone expects to have above average growth potential as the U.S. economic recovery evolves, with a focus on markets with high concentrations of employment in the technology, energy and health sectors.
A diverse pool of more than two dozen domestic and international institutional investors invested in the Fund, which has already completed five acquisitions, with two more pending.

“We’re targeting investments in markets that we believe will be the fastest-growing in terms of job recovery. It’s a strategy we executed successfully coming out of the last major downturn, and our overall track record has engendered confidence among investors,” said Thomas G. Dudeck, the fund’s portfolio manager and also Cornerstone’s chief of investment strategy.

Additional Fundraising, Note Buys

American Capital Agency Corp.

in Bethesda, MD, is looking to raised more $2 billion through the sale of common shares. It expects to use the net proceeds to acquire additional agency mortgaged-backed securities,

Public Storage

in Glendale, CA, raised $425 million from the sale of 5.75% cumulative preferred shares. The company expects to use the net proceeds, together with cash on hand, to redeem our 6.625% Cumulative Preferred Shares, Series M.

Kimco Realty Corp.

in New Hyde Park, NY, in raising $400 through the sale of 6% cumulative redeemable preferred stock. The company intends to use the net proceeds to reduce outstanding debt.

Vornado Realty Trust

in Paramus, NJ, completed a $325 million refinancing of 100 W. 33rd St., a 1.1 million-square-foot property on the entire Sixth Avenue block front between 32nd and 33rd streets in Manhattan. The loan bears interest at LIBOR plus 2.5% and matures in March 2015 with two one-year extension options. The company realized net proceeds of approximately $87 million after repaying the existing loan on the property and closing costs.

Armour Residential REIT Inc.

in Vero Beach, FL, is raising $246.7 million in a common stock offering. The company intends to use the net proceeds of the offering to acquire additional agency securities.

Nationstar Mortgage Holdings Inc.

a residential mortgage loan servicer in Lewisville, TX, is raising $233 million in an initial public offering. The money will go to acquiring additional servicing portfolios.

Select Income REIT

in Newton, MA, raised $192.6 million in a public common shares offering. The net proceeds will be used to repay debt.

Alexandria Real Estate Equities Inc.

in Pasadena, CA, netted $125.9 million from the sale of 6.45% cumulative redeemable preferred stock. The company intends to use the net proceeds reduce debt.

Kite Realty Group Trust

in Indianapolis is raising $80 million in a public offering of 8.25% series a cumulative redeemable perpetual preferred shares and common stock. The company intends to use the net proceeds to repay debt.

RAIT Financial Trust

in Philadelphia was looking to raise upwards of $36.8 million in a public stock offering. The company intends to use the net proceeds to make investments.

KBS Legacy Partners Apartment REIT

refinanced the mortgage loan secured by a 504-unit Class A apartment complex in the Valley Ranch community of Irving, TX. It entered into a $32.5 million 7-year multifamily note with CBRE Capital Markets Inc., which represented 70% of the lender’s appraised value for Legacy at Valley Ranch. The loan matures on April 1, 2019 and bears interest at a fixed rate of 3.93%. Monthly payments are initially interest-only.

MHI Hospitality Corp.

Williamsburg, VA, executed a $30 million secured loan with TD Bank collateralized by a first mortgage on the Hilton Philadelphia Airport Hotel in Philadelphia. The loan carries a floating interest rate of the 30-day LIBOR rate plus 3.0%, with a 50 basis point floor on LIBOR, and amortizes on a 25-year schedule. The maturity date is Aug. 30, 2014 with an extension option until March 1, 2017. Proceeds from the loan were used to pay off the remaining indebtedness under the company’s existing syndicated credit facility, to repay a portion of the company’s indebtedness under its Note Agreement with Essex Equity, and for working capital purposes.

Madison Realty Capital

in New York acquired a 15-note portfolio from a regional savings bank. The loan portfolio is secured by 11 properties in Manhattan and 14 in Brooklyn, comprised of 245 residential units and 12 commercial spaces. The loans were originated at various times between 2006 and 2009. The aggregate principal balance of the loans was approximately $28.7 million.

Morgan Stanley Finishes Preparing $1.1 Billion Offering

steve — Thu, 08 Mar 2012 17:16:43 +0000

Morgan Stanley will be going to market with Morgan Stanley Capital I Trust 2012-C4 transaction, a $1.1 billion transaction collateralized by 38 fixed-rate commercial mortgage loans that are secured by 77 properties across 22 U.S. States and Mexico.

The top five loans represent 39.5% of the pool and the top 10 loans represent 62.7%.

The pool is comprised of loans secured by seven property types, with significant exposures in retail (42.3%), lodging (24%), and office (14.4%). The lodging exposure includes a hotel condominium interest that represents 6.8% of the pool. There are 13 properties (15.5%) that are single tenant facilities.

The largest tenant exposure is United HealthCare Services, Inc., which is the sole tenant in an office building in Eden Prairie, MN, that serves as collateral for the tenth largest loan in the pool (2.7%).

The loans were originated by the mortgage loan sellers, Morgan Stanley Mortgage Capital Holdings LLC, and Bank of America, which contributed 69.9% and 30.1% respectively.

The majority of the loans (29 loans, 83.8%) were used to refinance existing debt and the proceeds from eight loans (10.4%) were used to acquire properties. All of the loans are balloon loans, and 32 loans (79.9%) amortize throughout the loan term.

Morgan Stanley funded the largest loan, a $130.0 million first mortgage loan to refinance existing debt on The Shoppes at Buckland Hills, a 1 million-square-foot, two-level regional mall in Manchester, CT. The loan is secured by the borrower’s fee interest in 535,235 square feet of in-line space. The mall, built in 1990 and renovated in 2003, is anchored by Macy’s, Sears, JCPenney and Macy’s Men’s and Home; however the anchors own their stores and are not part of the collateral. The sponsor, General Growth Properties, contributed approximately $25 million of equity in conjunction with the loan, which was used to refinance a $156 million loan on the subject.

Bank of America and Morgan Stanley jointly funded a $100 million first mortgage loan to refinance existing debt on three luxury resort hotels. The loan is secured by fee interests in three properties: The Four Seasons Santa Barbara (The Biltmore in Santa Barbara, CA); Las Ventanas al Paraiso at the southern tip of the Baja peninsula between Cabo San Lucas and San Jose del Cabo, Mexico; and the San Ysidro Ranch in Montecito, CA. In addition to the senior mortgage, The sponsor, Ty Warner Hotels & Resorts procured an $80 million mezzanine loan secured by a pledge of the equity interests in the mortgage loan borrower.

Morgan Stanley funded a $75 million first mortgage loan to refinance existing debt on a 35-story commercial condominium at 50 Central Park South in New York, NY. The building is divided into 15 condominiums: one retail condominium unit on the ground floor, one hotel condominium unit consisting of the basement through 22nd floors, and 13 residential condominium units consisting of the 23rd through 35th floors. The building was constructed in 1928 and fully renovated between 2000 and 2002. The loan is secured by the borrower’s fee interest in the hotel unit which includes a 71% undivided interest in the common elements of the condominium. However, the borrower has leased its fee interest in the hotel for the operation of The Ritz Carlton Hotel. The sponsors of the borrower are Westbrook Partners and Millennium Partners, which the loan proceeds to partially repay an $80.5 million loan.

Deutsch Bank Prices New CMBS

steve — Thu, 08 Mar 2012 17:15:28 +0000

Deutsch Bank Securities priced the second new multiborrower CMBS deal this week. Pricing for that offering has yet to be publicly announced.

The primary assets of the Deutsch Bank’s COMM 2012-LC4 Commercial Mortgage Pass-Through Certificates are 43 loans secured by 67 commercial properties having an aggregate principal balance of approximately $941.3 million as of the cutoff date. The loans were contributed to the trust by German American Capital Corp., Ladder Capital Finance, and Guggenheim Life and Annuity Co.

Retail properties represent the highest concentration of the pool at 52.8%. Office properties represent 15.2%.

The largest loan in the pool is $99.78 million on Square One Mall, a 928,667-square-foot (541,128-square-foot owned) two-level regional mall in Saugus, MA. The property was originally constructed in 1959, and the total mall is approximately 94.2% leased. Square One Mall features two noncollateral anchors, Sears and Macy’s. The collateral is approximately 90.0% leased and includes a 68,500-square-foot Dick’s Sporting Goods as well as a 60,000-square-foot space leased to Best Buy. The loan, which is being used to refinance existing debt on the property of $83.3 million, is sponsored by Mayflower Realty LLC, which is a joint venture between Simon Property Group (56.4%), The Canadian Pension Plan Investment Board (29.6%), and Teachers Insurance and Annuity Association of America (14%).

The second largest loan is $75 million on Union Square, a 236,215-square-foot multi-level anchored retail center at the southern end of Union Square Park in Manhattan. The property is currently 100% occupied by seven tenants, including a 14-screen Regal Cinemas theater, Best Buy, and Nordstrom Rack. Union Square Retail was constructed in 1999 and renovated in 2009. The loan is being used to pay off an existing $32.75 million mezzanine loan and provide distributions to Related Cos. The loan is sponsored by a joint venture between Related and the State Teachers Retirement System of Ohio (STRSO). Related acquired a 49% interest in the borrower for $68.6 million in March 2008.

The third largest loan is for $67.75 million on a 554490-square-foot portfolio of retail properties in Puerto Rico sponsored by a joint venture between Forge Capital Partners and Sembler Co.