Originations

Brandywine Realty Trust, Radnor, Pa., has announced the pricing of an offering of $300 million aggregate principal amount of exchangeable guaranteed notes by its subsidiary, Brandywine Operating Partnership LP.The notes, due 2026, bear a coupon of 3.875%. Brandywine said it plans to use the net proceeds of the sale to repurchase up to $60 million of its common shares, to repay debt, and to provide working capital. The initial purchasers have been granted an option to buy up to $45 million of additional notes to cover any overallotments. Brandywine, a real estate investment trust, can be found online at http://www.brandywinerealty.com.

Edens & Avant, a private retail real estate company based in Columbia, S.C., has announced the closing of an additional $300 million equity commitment from its institutional investors.The company said the investors who increased their positions were the State of Michigan Retirement System; institutional investors advised by JPMorgan Asset Management -- Real Estate; and the New York State Teachers' Retirement System. The proceeds will be used to fund growing real estate investments in major urban markets from Boston to Miami, Edens & Avant said. The company can be found on the Web at http://www.edensandavant.com.

Greystone CDE LLC, New York, has announced a new product designed to refinance affordable housing projects in the 10th year of their development.Greystone CDE, an affiliate of Greystone & Co., said the program is designed to benefit developers and owners who generally would have to wait to refinance until the AH project's 15th year. The product allows the general partner to: refinance existing indebtedness; lower interest rates; monetize developers' fees; release overfunded reserves; buy out the limited partner; and post a recapture bond. "Greystone CDE's 10-year refinancing program is ideal for the general partner who wants to achieve two capital events within the final five years of a [Low Income Housing Tax Credit] project," said Matthew James, vice president of Greystone CDE. "There is a general belief that the posting of a recapture bond is cost-prohibitive to such a deal, but in fact, good refinancing will provide an inflow of capital, reduce interest payments, and provide conditions for an easy exit of the limited partner."

Members of minority groups constituted the fastest-growing segment of homebuyers obtaining new home-purchase mortgages in 2005, according to Genworth Mortgage Insurance and Compliance Technologies.In a report released at the Second Annual Mortgage Lending Industry Diversity and Emerging Markets Conference & Career Fair in Washington, conference co-sponsors Genworth and ComplianceTech said the percentage increase for minority loans in high-volume areas was three times greater than for white households in the top 20 metropolitan areas for mortgage growth. Using newly released Home Mortgage Disclosure Act data for 2005, the report ("The 2005 Minority Home Buying Surge") analyzes the change in minority home-purchase loans from 2004 to 2005 in 388 metro areas. "We are now witnessing the positive effects of the growth in immigrant households who want to own a piece of the American Dream," said Michael Taliefero, managing director of ComplianceTech, which prepared the report. "While immigration is part of the story, the lower homeownership rates among African-Americans and Hispanics represent pent-up mortgage demand that is starting to be filled." Genworth can be found online at http://www.genworth.com.

Interest-only and payment-option ARM lenders will have to qualify borrowers at the fully indexed rate with potential negative amortization added to the loan amount under final federal regulatory guidance issued Friday.Banking regulators rejected industry complaints that the new underwriting guidelines will be too restrictive. Under the mandate, payment-option adjustable-rate mortgage servicers must include in the monthly mortgage statement an "explanation" that if borrowers chooses the minimum monthly payment -- which many do -- it would increase their loan balance. "The regulators stuck to their guns," said Howard Glaser, a former Department of Housing and Urban Development attorney who runs a consulting practice. ".... It is rare for federal regulators to step in and regulate a specific product. They are doing so here out of concern that they need to protect both the borrower and the bank." According to the Alternative Products Quarterly Data Report, the largest option ARM lenders include Countrywide Home Loans, Washington Mutual, and Golden West, among others. The regulators also issued model consumer disclosures for IO and option ARM products for public comment.

Class G of Morgan Stanley Capital I Inc. commercial mortgage pass-through certificates, series 1996-WF1, has been placed on Rating Watch Negative by Fitch Ratings.The rating action was due to an August 2006 appraisal reduction of $6.24 million on the real estate owned asset, which has led to interest shortfalls, Fitch said. The master servicer was not able to specify how long interest shortfalls are expected to continue, the rating agency said.

Two classes from Equity One ABS Inc. mortgage pass-through certificates issued in 2002 have been downgraded by Fitch Ratings.Class B of series 2002-1 was downgraded from BBB to BB-plus, and class B-2 of series 2002-3 was downgraded from BBB to BB. Fitch also affirmed the ratings on 33 classes in eight Equity One subprime transactions. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. Overcollateralization has been "off target for as many as eight of the past nine months" because monthly collateral losses have exceeded the available monthly spread, Fitch reported. The rating agency can be found online at http://www.fitchratings.com.

Standard & Poor's has announced several changes to its S&P 500, S&P 100, and S&P REIT Composite indices.Mortgage lender Golden West Financial Corp. will be replaced by Smith International Inc. in the S&P 500 because Golden West is being acquired by Wachovia Corp., S&P reported. Meanwhile, Wachovia will replace Unisys Corp. in the S&P 100. Both changes will take effect after the close of trading on Sept. 29. Two real estate investment trusts, Spirit Finance Corp. and Host Hotels & Resorts Inc., will be listed on the S&P REIT Composite Index in early October. Spirit will replace Heritage Property Investment Trust Inc. after the close of trading on Oct. 3 because Heritage is being acquired by Centro Properties Group, S&P said. Host Hotels will replace Trizec Properties Inc. after the close of trading on Oct. 5 because Trizec is being acquired by the Blackstone Group and Brookfield Properties Corp. S&P can be found online at http://www.standardandpoors.com.

CBRE Realty Finance, a Hartford, Conn.-based commercial real estate financing and investing company, has priced an initial public offering of 9.6 million common shares at $14.50 each.The shares of the CBRE Melody & Co. affiliate were trading on the New York Stock Exchange in a range of $14.50 to $15.15 on Sept. 28. The company said it expects net proceeds of $113.7 million from the offering. CBRE Realty Finance has opted for real estate investment trust status for tax purposes. Underwriters have been granted a 30-day option to buy up to 1.44 million additional shares from the company to cover any overallotments.

Beverly Hills, Calif., is the most expensive housing market in the United States, with an average home sale price of $1.80 million so far this year, according to the 2006 Coldwell Banker Home Price Comparison Index.California cities dominated the list of the 10 most expensive markets in the survey, yielding only one spot -- 8th place -- to a non-California market: Greenwich, Conn., with an average sale price of $1.40 million. Second and third places on the list were occupied by Santa Monica, at $1.77 million, and La Jolla, at $1.76 million. The most affordable U.S. market was Minot, N.D., with an average sale price of just over $132,000, Coldwell Banker reported. "While 2006 likely will be the third-best year in real estate history, according to the National Association of Realtors, there has been a shift to a buyer's market," said Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate Corp. "With a larger inventory to choose from, buyers are taking their time and exploring several different homes before choosing to make an offer." The company can be found online at http://www.coldwellbanker.com.

Despite the downturn in the housing market, nearly half of all homeowners are still expecting annual increases of at least 5% in the value of their home over the next few years, according to the Second Annual RBC Capital Markets Consumer Survey.The survey also indicated that 25% of homeowners have already paid off their mortgage, almost twice the percentage of people with risky nontraditional mortgages. "While it's true that it may be easier to pay off a mortgage in Selinsgrove, Pa., than it is in NYC, we were still very surprised that the number was so high," said Scott Ciccarelli, managing director and equity research analyst at RBC Capital Markets. "This goes against the general belief that most Americans are leveraged to the hilt." Another survey finding is that more than 80% of homeowners have at least $50,000 of equity built up in their homes and nearly 60% believe they have at least $100,000 of equity.

The average 30-year fixed mortgage rate fell from 6.40% to 6.31% over the seven-day period ended Sept. 28, its lowest level since the 6.24% recorded the week of March 2, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 6.06% to 5.98%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages declined from 6.08% to 6.00%, and the average rate for one-year Treasury-indexed ARMs decreased from 5.54% to 5.47%, Freddie Mac reported. Fees and points averaged 0.4 of a point for fixed-rate mortgages, 0.5 of a point for hybrid ARMs, and 0.6 of a point for one-year ARMs. "This week's economic releases, which showed a slight one-year decline in both new- and existing-house prices in August, fell short of market expectations and prompted market analysts to reassess how much the housing sector will contribute to economic growth in the coming year," said Frank Nothaft, Freddie Mac's chief economist. "As a result, mortgage rates declined even further this week to match those set six months ago." A year ago, the average 30-year and 15-year fixed rates were 5.91% and 5.48%, respectively, and the average hybrid and one-year ARM rates were 5.44% and 4.68%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Two classes from CDC Mortgage Capital Trust mortgage pass-through certificates, series 2002-HE3, have been downgraded by Fitch Ratings and two classes from other transactions have been placed on Rating Watch Negative.The downgrades were as follows: class B1, from BB-minus to B-plus; and class B2, from B-plus to C. Class B2 was also assigned a distressed recovery rating of DR6. The securities placed on watch were class B3 of series 2003-HE3 and class B3 of series 2003-HE4. In addition, Fitch affirmed the ratings on 14 classes from the three CDC deals. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. The pools consist of fixed- and adjustable-rate subprime mortgages for one- to four-family residential properties.

Innkeepers USA Trust, a real estate investment trust based in Palm Beach, Fla., has announced an increase in its revolving unsecured line of credit from $135 million to $205 million.The hotel REIT said the line of credit has also been amended to extend the maturity to September 2008 and to reduce the interest rate from a range of 140-225 basis points over the London interbank offered rate to a range of 115-175 bps over LIBOR. In addition, the facility can be expanded to $275 million under certain circumstances, Innkeepers USA said. The REIT can be found on the Web at http://www.innkeepersusa.com.

Crow Holdings, a Dallas-based real estate investor representing the Trammell Crow family, is selling a portfolio of 147 assets to GE Real Estate, Norwalk, Conn., for $2.2 billion.The portfolio consists of 112 industrial buildings (9.3 million square feet), 19 retail properties (3.6 million square feet), eight multifamily properties (3,141 units), six hotels (1,727 rooms), and two office buildings (350,000 square feet) located across the United States, according to Crow. GE RE is selling the 19 retail properties to Kimco Realty Corp., a New Hyde Park, N.Y.-based retail real estate investment trust, for about $920 million. Crow Holdings is seeking "to capitalize on today's attractive investment sales market and generate very strong returns for our partners," the company said. Crow can be found online at http://www.crowholdings.com.

First BanCorp, San Juan, Puerto Rico, has announced that its restatement of financial results for 2000-2004 reflects changes in the treatment of mortgage-related transactions and contains cumulative reductions of $17.1 million (or 3.4%) in retained earnings and legal surplus.Approximately $15.1 million of the reductions represent noncash adjustments related to derivatives and broker placement fees. The company had concluded last December that "a substantial portion" of its mortgage-related transactions with Doral Financial Corp. and R&G Financial Corp. since 1999 did not qualify as true sales for accounting purposes, mainly because they included unlimited recourse provisions. "This filing culminates a painstakingly diligent accounting review and significant milestone of First BanCorp's path back to normal-course financial reporting," said Luis Beauchamp, the company's president and chief executive officer. First BanCorp can be found online at http://www.firstbankpr.com.

The Market Composite Index, an overall measure of mortgage applications, fell from to 595.8 to 566.5 on a seasonally adjusted basis during the week ended Sept. 22, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 5.4% on the week and were down 21.1% from the level recorded a year earlier. The Purchase Index fell from 397.9 to 375.9 on a seasonally adjusted basis, while the Refinance Index fell from 1748.7 to 1677.5. Refinancings represented 44.3% of total applications, up from 43.7% the previous week, while adjustable-rate mortgages accounted for 26.4%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.36% to 6.18%, and points (including the origination fee) fell from 1.11 to 1.06 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

The speed and severity of the downturn in the housing market have dashed Wall Street's hopes for a "soft landing" in the industry, according to Mike Larson, a real estate specialist with Weiss Research's MoneyandMarkets.com.Mr. Larson, an analyst with the Jupiter, Fla.-based Weiss Research, said five consecutive months of decline in existing-home sales and a 13% drop over the past year have discredited the soft-landing forecasts. "We have just witnessed the first year-over-year drop in median home prices in 11 years -- and the second-worst such decline in 38 years of record-keeping," the analyst declared. "With the pile-up of new and existing unsold homes now the largest in history, the latest price decline could be just the first of many." Weiss can be found on the Web at http://www.moneyandmarkets.com.

Wachovia Securities, Charlotte, N.C., has announced that it is forming a new wholesale lending organization by combining the American Mortgage Network with Wachovia Mortgage's third-party lending business.The new unit, Wachovia Securities Wholesale Mortgage, will be part of Wachovia's Corporate and Investment Banking Group. Charlotte Catalfo and John Robbins will be the co-heads of the new unit. Combined production from both entities totaled $19 billion last year, Wachovia said. "We have aggressive goals for our new wholesale mortgage organization, which we believe has enormous potential for production and product innovation," said Curtis Arledge, head of Wachovia's Fixed Income Division. "Our vertically integrated mortgage model leverages our capabilities in the secondary market and will help drive profitability as we meet continued global demand for mortgage-backed securities." Wachovia Securities can be found online at http://www.wachoviasec.com.

New-home sales increased 4.1% in August, according to a government report, but the unexpected pop resulted from a downward revision in July sales by nearly 6% and not an upturn in market activity."The housing market is weakening," said Celia Chen, director of housing economics at Moody's/Economy.com. "The trend is still downward." The U.S. Census Bureau reported new single-family home sales rose from a seasonally adjusted annual rate of 1.01 million in July to 1.05 million in August. July sales were revised downward from 1.07 million. The Economy.com director said she doesn't expect new-home sales to flatten out until mid-2007. She is projecting that sales will be down 14% this calendar year and another 8% in 2007. The Census Bureau report shows that new-home sales are off 17.4% since August of last year.