Street Talk

Street Talk: Flush with cash, lenders look to lend

Thar she brews!

July 15, 2016
Text Size:

There are opportunities to the east.

The Grand Rapids office of Chicago-based real estate capital firm Cohen Financial has secured an $11.2-million loan to refinance a Detroit-area apartment complex.

Westland Colonial Village Apartments, 8181 N. Wayne Road in the Detroit suburb of Westland, was built in the 1960s. It has 304 units and is considered a Class B multifamily community, said Cathy Bronkema, partner and managing director of Cohen’s Grand Rapids branch, 333 Bridge St. NW. Class B properties, a step below top-rated Class A, are generally defined as newer, well-kept and in middle-class parts of town.

Bronkema secured the $11.2-million, 10-year Commercial Mortgage-Backed Securities loan at 3.7 percent with Morgan Stanley. The loan sponsor is a local commercial real estate owner who prefers to be confidential, she said.

The deal reveals that lenders are currently flush with cash, Bronkema said, while interest rates remain at historic lows.

“Placing loans at a 4 percent interest rate or yield to (the) lender is safer and higher return than investing in the stock market or bond market. Life insurance companies, CMBS lenders, private funds and banks are all eager to put cash to work in commercial real estate to make yield they are not achieving in the bond/stock markets,” she said.

“The loan is used to capitalize the property. Debt at 4.15 percent interest rate is way cheaper than equity, thus owners and investors of commercial real estate use leverage to achieve higher returns.”

The Westand Colonial Village loan closed June 23.

“My client was extremely pleased with the attractive terms I secured, specifically the low 10-year fixed interest rate of 3.7 percent, which is very competitive with agency financing,” Bronkema said. “The CMBS marketplace has been very active lately, given its slowdown in the first quarter of 2016.”

Westland Colonial Village’s owner hired Cohen Financial to arrange refinancing, Bronkema said. Cohen is a mortgage banker that arranged the loan and is not the owner of the property, she said.

The local Grand Rapids office of Cohen Financial structures short- and long-term capital alternatives to meet client goals. Bronkema said Cohen is one of the nation’s leading originators of commercial and multifamily real estate financing.

Cohen’s parent company, Pillar, is a direct lender for multifamily and health-care properties, serving clients in more than 20 U.S. markets.

Zoo stew

After the recent tragedy at John Ball Zoo, where zoo workers showed up for work on the morning of July 8 to find 18 cownose stingrays and three spotted bamboo sharks had died overnight due to a sensor malfunction, Peter D'Arienzo, John Ball Zoo CEO, said he does not expect to reopen the stingray exhibit.

“Our intent is not to reopen the exhibit and to actually remove the exhibit,” D’Arienzo said. “That doesn’t mean we won’t have stingrays in the future. We know it’s a popular exhibit.

“We know it’s a great way for people to connect with nature and when people connect with nature they care about nature and when they care about nature they take action to protect nature, and that is what we are all about.”

D’Arienzo said the area where the lagoon is located would become a pedestrian area.

Despite plans not to reopen the lagoon, D’Arienzo said a new stingray exhibit is part of the zoo’s strategic plan, and so a new exhibit could eventually be built.

“It is very possible we will still have that exhibit, but I want to spend the next year going through what is the best way to create connections to nature, and what does the community really want,” he said.

D’Arienzo said the zoo is confident it understands what happened on the night of July 7 and is putting together a report.

“We have preliminary lab results back, and it was oxygen deprivation,” he said.

He said flooding from heavy rain tripped a circuit, and a sensor malfunctioned that should have triggered an alarm alerting zoo staff.

He said the system was last serviced and evaluated on June 13.

D’Arienzo said the zoo is reviewing the system and having additional conversations about redundancy and testing frequency for all of its exhibits, trying to determine any changes needed.

D’Arienzo said he was touched by support the community has shown.

“I knew people cared, but it was really touching to see the positive comments on Facebook and the letters and cards that we got. It’s been very difficult on our team,” he said.

Pokemon no

Is the Pokemon GO rage really a big exercise in data mining as some have suggested?

While you ponder that, legislators including West Michigan’s Justin Amash are gearing up against government incursions into private data.

A bipartisan group of lawmakers, led by co-chairs U.S. Reps. Zoe Lofgren, D-California, and Ted Poe, R-Texas, last week announced the newly formed Fourth Amendment Caucus to protect the privacy and security of Americans.

The bipartisan caucus is composed of 25 founding members: 13 Republicans and 12 Democrats. The members will lead efforts in the House of Representatives to protect against warrantless searches and seizures, close privacy violating surveillance loopholes, and champion efforts to protect and restore Fourth Amendment rights.

Times are changing, and Congress needs to keep up, said Amash, R-Michigan.

“A caucus dedicated to defending Americans’ Fourth Amendment-secured rights is needed now more than ever, and its formation illustrates the growing awareness among the American public and their representatives in Congress of the far-reaching implications of the surveillance state,” he said.

“With rapidly changing technology and evolving security threats come constant pressures to shift the line between our privacy and acceptable government access to our information,” added Rep. Ted Lieu, D-California.

Whale of a concept

Moby Dick isn’t a resident of Grand Rapids.

But KBS — one of the most sought-after beers in the beer world — is made here, and that’s why a local beer fanatic, Jason Ley, decided to film a pilot episode of an awesome beer show concept: “Modern Ahabs.”

Ley is a super charismatic guy with a growing passion for beer, and he wants to dive into what makes consumers pine for certain beers.

A variety of beer shows have hit the airwaves, even locally, but perhaps the best was Discovery Channel’s Brew Masters, hosted by craft beer superstar and Dogfish Head Brewery founder Sam Calagione. Unfortunately, it aired far too early in the existence of the modern beer industry and didn’t have enough viewers to sustain itself in 2010. A large beer producer threatening to pull advertising might have something to do with it, too.

Ley’s concept, produced locally by Grand Rapids-based Deep End Films, has the makings of a solid show. The hard-to-find “white whales” of beer are often the ones fueling early passion of drinkers getting into the industry and a reason craft beer has grown so rapidly in the past several years.

The pilot episode of “Modern Ahabs” premieres at 7 p.m. Thursday at Wealthy Street Theater, perhaps with a special beer on hand from Founders Brewing Co.

Recent Articles by Business Journal Staff

Editor's Picks

Comments powered by Disqus