CREJ

April 5-18, 2017

Page 25

www.crej.com

OLORADO

EAL

STATE

OURNAL

Finance/Appraisal

by Jennifer Hayes

Holliday Fenoglio Fowler

LP recently arranged financ-

ing for a Florida-based firm

making its Denver debut

with its purchase of the Cas-

cades office property.

HFF’s Leon McBroom led

the team arranging $44.1

million in financing on

behalf of the buyer, Ameri-

ca’s Capital Partners, for its

$63 million purchase of the

348,760-square-foot Class A

office asset in Centennial.

The 70 percent loan-to-

value, seven-year, fixed-rate

acquisition loan was funded

through a life insurance com-

pany correspondent lender.

Located on an 8.71-acre site

at 6300 S. Syracuse Way, Cas-

cades was renovated in 2016

and is 97 percent leased to

24 tenants. Located in close

proximity to Interstate 25 and

within a 10-minute walk to

the Arapahoe at Village Cen-

ter light-rail stop, the building

also features a fitness center,

deli, 3,000-sf conference cen-

ter, western-facing balconies

and covered parking.

America’s Capital Partners

is a private commercial real

estate investment firm head-

quartered in Coral Gables,

Florida.

▲

HFF arranges $44.1M Cascades purchase

A seven-year, fixed-rate acquisition loan at 70 percent loan to

value was arranged for the $63 million purchase of the Cascades

office property in Centennial.

he annual Mortgage

Bankers Association

Commercial Real Estate

Finance/Multifamily Housing

Convention was held in Febru-

ary in San Diego. The conven-

tion was attended by more than

3,000 commercial and multifam-

ily real estate finance profession-

als. Members of the HFF Denver

teamattended the conference and

met with a variety of lending

sources, including life insurance

companies, agencies, commercial

mortgage-backed securities, com-

mercial banks and debt funds.

Commercial and multifamily

lending and borrowing reached

$502 billion in 2016, according to

the MBA, which was flat com-

pared to 2015. However, volumes

were up substantially from a low

of $83 billion in 2009. The dol-

lar volume of loans originated

for the agencies (Fannie Mae

and Freddie Mac) increased by

10 percent, commercial bank vol-

ume increased 6 percent and life

insurance company loan volume

was up 4 percent. CMBS saw a

15.5 percent decrease in volume

in 2016 compared to 2015. The

MBA predicts that originations

for commercial and multifamily

loans will increase to $537 billion

in 2017, a 9 percent increase over

2016 volumes.

Consumers of debt in 2017 will

benefit from the availability and

variety of lending sources. There

is liquidity from all providers of

commercial real estate debt and

pricing remains competitive.

■

Life insurance compa-

nies.

Life insurance companies’

new loan allocations are gener-

ally above

the previous

year’s alloca-

tion. Unlike

2016, when

many

life

i n s u r a n c e

compan i e s

reached their

allocations

by the mid-

dle of the year,

most life insur-

ance companies

have been slow

to originate loans in 2017. While

interest rates increased at the

end of 2016 into the beginning

of 2017, spreads have declined

by approximately 20 basis points

from where they were at the end

of 2016. Life insurance compa-

nies will continue to aggressively

compete on interest rate for lower

leverage loans on quality assets

in prime locations. Longer-term

debt, up to 30 years fully amor-

tizing, continues to be available.

Life insurance companies are

also evolving in an effort to drive

fee business and compete on dif-

ferent fronts. Several firms have

new separate account clients

representing other life insurance

companies that lack a distribu-

tion platform or foreign pensions

that will pursue everything from

shorter-termbridge loans tomez-

zanine loans and longer-term

core loans.

■

Agencies.

Freddie Mac and

Fannie Mae had a loan produc-

tion cap of $36.5 billion each in

2016 as mandated by the Federal

Housing Finance Agency. The

FHFA established that the 2017

multifamily lending caps for Fan-

nie Mae and Freddie Mac will

remain at the same level they

were for 2016. As in 2016, the

FHFA will conduct a quarterly

review and adjust the caps as

necessary. Total agency origina-

tions were $107 billion in 2016.

The agencies exceeded their vol-

ume caps by expanding their

production on loans that are

excluded from their caps. These

exclusions will remain constant

for 2017, and will be an emphasis

for the agencies’ production goals

for 2017. Volume cap exclusions

include targeted affordable hous-

ing, small multifamily properties

(five to 50 units) at 80 to 100

percent of area median income

or below (percentage dependent

on market), manufactured hous-

ing, seniors housing at 80 per-

cent AMI or below, unsubsidized

market rate properties at 60 to 100

percent AMI or below (percent-

age dependent on market), prop-

erties located in rural areas at 80

percent AMI or below, and loans

to finance energy or water effi-

ciency improvements. Properties

that qualify for volume cap exclu-

sions will continue to see interest

rate reductions of up to 30 basis

points. The agencies will continue

to offer maximum leverage up

to 80 percent loan to value, with

interest-only payments available

up to the full term of the loan,

depending on leverage. Fannie

Mae in particular has the abil-

ity to offer loan terms exceeding

10 years and as long as 30 years

fully amortizing. The agencies

Takeaways from MBA conference Please see MBA, Page 33

Brock Yaffe

Associate director,

HFF, Denver