In the News—Week of August 7, 2023
Deal of the Week
A multifamily investor took out a $15mm loan on an apartment complex in Mesa, Arizona. This transaction was closed by Bryan Selna, Vice President & Senior Escrow Officer, in our Scottsdale office.
KKR sees golden opportunity for CRE deals in the Golden State
Someone sees opportunity in commercial real estate. KKR & Co. has opened an office in Los Angeles and is looking for investments in commercial real estate, Bloomberg reports. “Real estate markets are going through a combination of repricing and deleveraging,” Ralph Rosenberg, the firm’s global head of real estate, says. California is “where the action is going to be, and that’s where the opportunities are going to come.”
Austin developer buys 26 acres on Panther Island in Fort Worth
Seco Ventures, an Austin-based commercial real estate company, now enjoys the status as the largest investor on Fort Worth’s Panther Island, the Fort Worth Star-Telegram reports. Seco Ventures acquired 26 acres on nine parcels of land in an area known as Upstream on the island. Real estate transactions in Texas do not have to be publicly disclosed and the price of the deal is unknown.
CRE property delinquencies rise in US, credit rating agency says
Nearly $12 billion worth of commercial mortgage-backed securities became newly delinquent in July, Reuters reports. Figures from credit rating agency KBRA show that late payments rose by 34 basis points from June to 3.93%, and the rate of loans requiring special servicing rose for the fourth straight month to 6.44%. Chris Gorman, CEO of KeyBank, owner KeyCorp, said on an earnings call that the bank “just set for the second quarter in a row a record in terms of special servicing fees.”
Inflation, tight credit, remote work are leading to zombie buildings
Commercial real estate, particularly office, has a lot working against it these days. Inflation is up. Credit is tight. And employees are working from home. Part of the fallout is resulting in zombie buildings, which sit empty as owners turn them back to the lenders, the New York Post reports. “Even if you have a building that had all of the same tenants and all of the same income it had three years ago, if your debt is maturing today, you have a real problem,” says Harold Bordwin, a managing director at Keen-Summit Capital Partners.
Cookware co-founder pays $11 million for church building in Paradise Valley
One of the co-founders of a Los Angeles-based cookware company acquired the former Ascension Lutheran Church building in Paradise Valley for $500,000 above the listing price, AZ Big Media reports. Cole Mecray, the co-founder of HexClad Cookware, paid $11 million for the property at 7100 N. Mockingbird Lane. HexClad Cookware is best-known for being the preference of TV chef Gordon Ramsay. “The property being so close to the Ritz Carlton places it at an important throughway in Paradise Valley that will serve as an essential part of the city’s growth,” Launch Powered by Compass’ Frank DiMaggio, who closed the deal, says.
Mesa Planning and zoning board recommends historic status for theater
The Nile, a movie theater that opened almost 100 years ago in downtown Mesa, may be bestowed with historic landmark status. The Mesa Planning and Zoning Board voted unanimously to recommend the Mesa City Council approve a rezoning to give the building preservation protection, The Daily Independent reports via Newsbreak. Opened in 1924, with a cutting-edge air conditioning system, the Nile showed movies until the early 1950s. More recently is was a concert venue that once hosted Snoop Dogg.