MARKET UPDATE
April 1, 2014
Q10 Capital Recognizes 2013 Production Achievements
During
the annual Q10 Producer Meeting at CREF, Q10 had the honor of recognizing
several of their peers for outstanding production results in 2013. WESTCAP
is pleased to announce that Steve Bridges and Craig Rommel were awarded
President's Club recognition as two of the ten top producers in the country
last year.
OUTLOOK ON THE ECONOMY
The gap in yields between U.S.
five-year notes and 30-year bonds dropped to the lowest level in
four years as economic growth beat estimates, boosting bets the Federal Reserve
will raise interest rates next year. Treasury five-year notes fell the most in
a week as initial jobless claims dropped and the economy grew. Yields on long bonds slid to the lowest level in eight
months. Short- and medium-maturity Treasuries tumbled last week after Fed Chair
Janet Yellen suggested the central bank may end bond-buying in the fall
and raise borrowing costs six months after that.
http://www.marketwatch.com/story/treasury-curve-now-flattest-since-2009-2014-03-24?dist=afterbell
http://www.marketwatch.com/story/treasury-curve-now-flattest-since-2009-2014-03-24?dist=afterbell
The 10-year Treasury,
which closed today at 2.72%, was 2.99% January 3, 2014, 1.92% a
year ago January 3, 2013.
- The US economy grew at 2.6% in the 4th Q vs.. 2.4%, which economists had expected. Estimates for the 1st Q GDP are expected to slow to 1.8% due to the brutal winter weather which plagued the US this year.
- Consumer spending rose 3.3% in the 4th Q, the most since the 3rd Q 2010.
- Household spending rose 3.5% annualized in January, the biggest gain since the 3rd Q 2005.
- Retail sales rose in February for the first time in three months, which is very encouraging given the tough weather.
- Contracts for previously owned homes unexpectedly fell in February for the eight straight month, no doubt due to the colder than normal weather.
- The University of Michigan Consumer Confidence Index fell to 79.9 from 81.2 in February. Consumers surveyed were more pessimistic, indicating the faster bigger payroll gains which lead to faster wage growth are needed to propel spending.
- The Michigan sentiment survey, indicating expectations six months out, decreased to 69.2 from 72.7 last month. This is the lowest reading since November.
- Federal Reserve Chair Janet Yellen said “considerable slack” in the labor market is evidence that the central bank’s unprecedented accommodation will still be needed for “some time” to put Americans back to work.
Bottom line is that the economy appears to make continued progress, even in spite of the tough winter weather. Hopefully, economic conditions will continue to improve with the weather.
- The US economy grew at 2.6% in the 4th Q vs.. 2.4%, which economists had expected. Estimates for the 1st Q GDP are expected to slow to 1.8% due to the brutal winter weather which plagued the US this year.
- Consumer spending rose 3.3% in the 4th Q, the most since the 3rd Q 2010.
- Household spending rose 3.5% annualized in January, the biggest gain since the 3rd Q 2005.
- Retail sales rose in February for the first time in three months, which is very encouraging given the tough weather.
- Contracts for previously owned homes unexpectedly fell in February for the eight straight month, no doubt due to the colder than normal weather.
- The University of Michigan Consumer Confidence Index fell to 79.9 from 81.2 in February. Consumers surveyed were more pessimistic, indicating the faster bigger payroll gains which lead to faster wage growth are needed to propel spending.
- The Michigan sentiment survey, indicating expectations six months out, decreased to 69.2 from 72.7 last month. This is the lowest reading since November.
- Federal Reserve Chair Janet Yellen said “considerable slack” in the labor market is evidence that the central bank’s unprecedented accommodation will still be needed for “some time” to put Americans back to work.
Bottom line is that the economy appears to make continued progress, even in spite of the tough winter weather. Hopefully, economic conditions will continue to improve with the weather.
Bloomberg
10-Year Treasury Forecast The forecast of the 71 economists
surveyed by Bloomberg in March moved their median estimates for the
10-year Treasury yield up as follows:
2nd Quarter 2014 up to 3.00%
3rd Q 2014 up to 3.20%
4th Q 2014 to 3.35%
1st Q 2015 up to 3.50%
2nd Q 2015 to 3.60%
3rd Q 2015 to 3.75%
If we knew the answer to when interest rates are going to rise and fall, we'd probably be doing something else. Just remember, you need a 20% increase in your gross income to overcome a 1% increase in interest rates.
2nd Quarter 2014 up to 3.00%
3rd Q 2014 up to 3.20%
4th Q 2014 to 3.35%
1st Q 2015 up to 3.50%
2nd Q 2015 to 3.60%
3rd Q 2015 to 3.75%
If we knew the answer to when interest rates are going to rise and fall, we'd probably be doing something else. Just remember, you need a 20% increase in your gross income to overcome a 1% increase in interest rates.
RATES
Life Companies: 5-Year Fixed 3.90% - 4.90%; 10-Year Fixed 4.75% - 5.10%
10-Year Fixed 50% LTV or less as low as 1.45 spreads for $10 million+
Multifamily: 5-Year Fixed 3.30% - 3.85%; 10-Year Fixed 4.15% - 4.55%
Bridge Loans: $8 Million+ / 2-7-years plus options to extend, Fixed 4.60% - 6%, and floating at 90 Day LIBOR+300, 1 point in and 1/2 - 1 point out.
$1 Million+ / 3-years plus options to extend, Fixed 6.5% - 9%, typically 1 point in and 1 point out.
Banks: Commercial: 5-Year Fixed 4.40% +/-; 10-Year Fixed 5.15% +/-
Multifamily: 5-Year Fixed 3.65% +/-; 10-Year Fixed 4.75% +/-
Construction Loans: LIBOR+275-400
Life Companies: 5-Year Fixed 3.90% - 4.90%; 10-Year Fixed 4.75% - 5.10%
10-Year Fixed 50% LTV or less as low as 1.45 spreads for $10 million+
Multifamily: 5-Year Fixed 3.30% - 3.85%; 10-Year Fixed 4.15% - 4.55%
Bridge Loans: $8 Million+ / 2-7-years plus options to extend, Fixed 4.60% - 6%, and floating at 90 Day LIBOR+300, 1 point in and 1/2 - 1 point out.
$1 Million+ / 3-years plus options to extend, Fixed 6.5% - 9%, typically 1 point in and 1 point out.
Banks: Commercial: 5-Year Fixed 4.40% +/-; 10-Year Fixed 5.15% +/-
Multifamily: 5-Year Fixed 3.65% +/-; 10-Year Fixed 4.75% +/-
Construction Loans: LIBOR+275-400
DEALS OF THE MONTH
$30,400,000 Life
Co. financing for Portfolio of 4 multifamily projects
RATE LOCKED & IN CLOSING
RATE LOCKED & IN CLOSING
$4,600,000 loan for a 16,000 SF Retail
building Life Company
RATE LOCKED & IN CLOSING
RATE LOCKED & IN CLOSING
$37,500,000 144 Room Residence Inn by Marriott
construction loan with a
major money center bank in Pasadena, CA.
IN CLOSING
IN CLOSING
$2,080,000 443 unit self-storage with
a regional bank.
10-Year fixed rate, PAR and flexible prepayment penalty
San Antonio, TX.
IN CLOSING
10-Year fixed rate, PAR and flexible prepayment penalty
San Antonio, TX.
IN CLOSING
HIGHLIGHTED CLOSINGS include Life Company perms,
Bank, CMBS, Construction Loans, Bridge Loans, and Forward Commitments.
$28,555,000 CMBS permanent for a 134 room
Marriott Courtyard hotel in Maui, HW.
$25,000,000 on an investment grade lease with 16 years remaining on a 177,000 SF single tenant office building. CMBS 10/30, 76% loan-to-purchase.
$12,500,000 Life Company permanent on a 110,000 SF Pacific Sales anchored retail center in Escondido, CA.
$9,400,000 bridge loan on a 62% leased 71,000 SF strip retail center on the following terms: 6% for a 5-year term amortized over 30 years with one of our many bridge lenders.
$25,000,000 on an investment grade lease with 16 years remaining on a 177,000 SF single tenant office building. CMBS 10/30, 76% loan-to-purchase.
$12,500,000 Life Company permanent on a 110,000 SF Pacific Sales anchored retail center in Escondido, CA.
$9,400,000 bridge loan on a 62% leased 71,000 SF strip retail center on the following terms: 6% for a 5-year term amortized over 30 years with one of our many bridge lenders.
$6,350,000 correspondent Life Company Forward Commitment Escondido
owner-user build to suit warehouse 4.35%, 15/15 (borrower’s request to match
lease term), rate locked in June prior to construction of improvements
for a forward funding in December upon completion of construction.
$4,700,000 Credit Company refinance for a 33,800 SF office over retail.
$3,350,000 correspondent life company permanent for a 120,000 SF multi-tenant industrial park in Riverside, CA.
$4,700,000 Credit Company refinance for a 33,800 SF office over retail.
$3,350,000 correspondent life company permanent for a 120,000 SF multi-tenant industrial park in Riverside, CA.
$2,375,000 correspondent
life company refinance for a Logan's Roadhouse Restaurant in Midland, TX.
Expert's
Opinions If you are interested in access to just about
every major financial publication’s editorials, check the following website and
save it in your bookmarks: http://www.realclearmarkets.com
Federal Reserve Chair Janet Yellen said “considerable slack” in the labor market is evidence that the central bank’s unprecedented accommodation will still be needed for “some time” to put Americans back to work.
http://bloom.bg/O8DP8H
Treasury Yields Flatten As Yields Are Expected to Climb: http://www.marketwatch.com/story/treasury-curve-now-flattest-since-2009-2014-03-24?dist=afterbell
El Erian Believes Markets Have Brushed Aside Global Unrest: http://blogs.marketwatch.com/thetell/2014/03/24/el-erian-markets-should-be-worrying-about-ukraine/
Trade Growth Leads as European Economic Recovery Broadens:
http://www.bloomberg.com/news/2014-02-26/trade-leads-u-k-economy-to-growth-as-recovery-broadens-1-.html
Ports Of Long Beach & Los Angeles Driving Our Local Economy:
Port of Long Beach: http://www.polb.com/economics/default.asp
Long Beach Container Data: http://www.polb.com/economics/stats/tonnage.asp
Los Angeles Container Data: http://www.portoflosangeles.org/maritime/stats.asp
Federal Reserve Chair Janet Yellen said “considerable slack” in the labor market is evidence that the central bank’s unprecedented accommodation will still be needed for “some time” to put Americans back to work.
http://bloom.bg/O8DP8H
Treasury Yields Flatten As Yields Are Expected to Climb: http://www.marketwatch.com/story/treasury-curve-now-flattest-since-2009-2014-03-24?dist=afterbell
El Erian Believes Markets Have Brushed Aside Global Unrest: http://blogs.marketwatch.com/thetell/2014/03/24/el-erian-markets-should-be-worrying-about-ukraine/
Trade Growth Leads as European Economic Recovery Broadens:
http://www.bloomberg.com/news/2014-02-26/trade-leads-u-k-economy-to-growth-as-recovery-broadens-1-.html
Ports Of Long Beach & Los Angeles Driving Our Local Economy:
Port of Long Beach: http://www.polb.com/economics/default.asp
Long Beach Container Data: http://www.polb.com/economics/stats/tonnage.asp
Los Angeles Container Data: http://www.portoflosangeles.org/maritime/stats.asp
WESTCAP's stable of exclusive
and semi-exclusive correspondent sources, most of which date back 25+
WESTCAP CORP is a member of Q10 Capital, an organization of 17 independent mortgage banking firms with 26 offices throughout the United States. Q10 members arranged $10 billion in the last 3 years, with a combined servicing portfolio of $15 billion for its institutional lenders. Q10's shared database of lending sources and market intelligence, including streaming quotes, insures that our clients are getting the best possible financing. www.Q10Capital.com
WESTCAP’s capacities include capital procurement for the following:
- Loan sizes from $1,000,000 to $250,000,000+ nationwide.
- Retail, Industrial, Office, Multifamily, Medical office, Hospitality, Self-Storage and Health Care, including some great single-tenant sources, as well the market standard for credit tenant lease financing.
- In addition to our outstanding stable of correspondent life companies, we also enjoy successful long-term relationships with a host of additional direct life company relationships, as well as a full range of debt and equity programs, including a long list of CMBS, construction lenders, bridge lenders and mezz sources, as well as Fannie Mae, Freddie Mac and HUD financing.
I am always available to discuss potential
financing and or equity requirements, or to provide a written quote to
help convince a seller that you, or your client, are the most qualified buyer.
I will also handle any size transaction, as I am interested
in establishing long-term relationships as early as possible.
Steve Bridges
Executive Vice President
WESTCAP CORP
9960 Irvine Center Drive
Irvine, CA 92618
Office: (949) 756-2520 x 204 Cell: (949) 235-1540
sbridges@westcapcorp.com
www.westcapcorp.com
CA RE Broker: 00465840
Executive Vice President
WESTCAP CORP
9960 Irvine Center Drive
Irvine, CA 92618
Office: (949) 756-2520 x 204 Cell: (949) 235-1540
sbridges@westcapcorp.com
www.westcapcorp.com
CA RE Broker: 00465840
