Originations

Archstone-Smith, a Denver-based multifamily real estate investment trust, has acquired a 550-unit Manhattan apartment property for $342 million.The acquisition was funded with tax-deferred proceeds from the dispositions of other assets, $7.5 million of operating partnership units, the assumption of $100.5 million of tax-exempt floating-rate bond financing, and $11.8 million of conventional debt (at an interest rate of 4.1%), the REIT reported. With this acquisition, the company's investment in the New York City metropolitan area now represents about 13% of Archstone's national portfolio, totaling $1.5 billion and 3,283 units, Archstone said.

Commercial mortgage-backed securities are rated the most competitive funding source for interest rates and loan proceeds, according to a recent borrower survey commissioned by the Commercial Mortgage Securities Association and the Mortgage Bankers Association.Last year, more than $165 billion in CMBS were issued in the United States. Now the second-largest source of capital funding for the commercial real estate industry, outstanding bond issuance totals $600 billion, the associations said. "While the size of the CMBS industry continues to grow, and the industry scored well in two of the five most important categories surveyed, it is also clear that we need to improve the dialogue between borrowers and the lending community," said Jack Cohen, chairman of the Borrower Survey Task Force and chief executive officer of Cohen Financial. "A preliminary review of the survey findings indicates that borrowers' specific concerns with the CMBS industry were with the inability to modify the loan based on what is best for the real estate and post-closing servicing issues." The survey was administered by the Minneapolis-based research firm, Gantz Wiley. The CMSA can be found online at http://www.cmbs.org, and the MBA can be found at http://www.mortgagebankers.org.

Forest City Enterprises Inc., a Cleveland-based real estate company, has announced a 50-year partnership agreement between its Forest City Military Communities subsidiary and the U.S. Navy for the ownership, development, and management of military family housing in the Chicago area.The parent company said Midwest Family Housing LLC, a public/private venture focused on Navy family housing, has been formed as a result of the agreement, which is aimed at "the privatization and upgrading" of military family housing. The venture will be responsible for the redevelopment of family housing at Naval Station Great Lakes and at Navy housing areas in North Chicago, Glenview, Highwood, and Highland Park in Illinois and in Crane, Ind. The project will involve demolition, renovation, and new construction expected to result in approximately 1,650 homes. Forest City can be found online at http://www.forestcity.net.

Habitat for Humanity International, Americus, Ga., has joined forces with the California Housing Finance Agency, Sacramento, to establish a loan purchase program designed to create homeownership opportunities for more Californians.Under the CalHFA Habitat for Humanity Loan Purchase Program, CalHFA has authorized the expenditure of up to $5 million for the purchase of first mortgages originated by Habitat for Humanity affiliates in California. The affiliates will use the capital from those sales to build additional affordable housing in the state, the organizations said. "California's Habitat affiliates participating in this program could greatly increase their building capacity and produce even more affordable housing in a state where it is greatly needed," said Stephen Seidel, Habitat's director of urban programs. The program will enable the Habitat affiliates to leverage their resources by giving them immediate access to funds they would normally collect over the life of the mortgages. The organizations can be found online at http://www.habitat.org and http://www.calhfa.ca.gov.

ECC Capital Corp., a real estate investment trust based in Irvine, Calif., has announced plans to consolidate seven wholesale loan processing centers into three and lay off more than 440 employees.The mortgage REIT said the reorganization, aimed at reducing costs and improving efficiency, will also result in the consolidation of the lending operations of ECC Capital's retail subsidiary, Bravo Credit Corp., into two centers. The three remaining wholesale processing centers will be located in Irvine, Calif., Downers Grove, Ill., and Glen Allen, Va. The layoffs involve 27% of the company's total work force. "In light of present market conditions, we believe it is necessary to make this significant adjustment," said Shabi Asghar, co-chief executive officer and president of ECC Capital. "We regret that these changes will impact so many of ECC Capital's associates and their families. Unfortunately, this action is necessary in order to remain competitive and to improve the operating results of our mortgage banking operations."

Zacks.com, the online unit of Zacks Investment Research Inc., Chicago, has identified Colonial Properties Trust, a real estate investment trust, as one of the stocks listed on a Zacks "profit track" that has outperformed the S&P 500 for the past four years.The REIT, which appears on the Zacks High Rank Value Profit Track, "has an appealing valuation, as evidenced by its price-to-earnings multiple of 11.52 and price-to-book multiple of 1.22," Zacks reported. The company posted third-quarter earnings of $0.93 per share, beating consensus estimates by 3%, according to Zacks. The High Rank Value Profit Track generated a 28.3% return in 2004, Zacks said. The criteria for inclusion are a P/E ratio below 15, a P/B ratio below 3, and a Zacks rank of #1 or #2. Zacks can be found online at http://www.zacks.com.

Bluegreen Corp., Boca Raton, Fla., has announced the completion of a $203.8 million private offering of securities backed by vacation ownership receivables, the company's largest securitization to date.The securities were issued by BXG Receivables Note Trust 2005-A, and Bluegreen said it will continue to service the loans collateralizing the securities. A portion of the proceeds were used to pay down all outstanding amounts due under the company's vacation ownership receivables purchase facilities, Bluegreen said. The securities offering consisted of six classes of notes with a blended interest rate of approximately 5.98%. Bluegreen can be found online at http://www.bluegreenonline.com.

Saxon Capital Inc., a real estate investment trust based in Glen Allen, Va., has announced that it is now conducting the retail business of Saxon Mortgage Inc., a wholly owned indirect subsidiary, under the trade name Saxon Home Mortgage.The move, representing a consolidation of all the residential mortgage REIT's production channels into Saxon Mortgage, was accomplished by merging another wholly owned indirect subsidiary, America's MoneyLine Inc., into Saxon Mortgage. "This name change is an important step in the company's continuing effort to restructure its direct-to-consumer lending platform," said James V. Smith, executive vice president of production at Saxon Capital. The company can be found online at http://www.saxoncapitalinc.com.

Mortgage companies shed 200 employees in November, according to the latest national employment report, ending a 20-month hiring spree that added over 53,000 full-time employees to their payrolls.The U.S. Bureau of Labor Statistics reported that employment in the mortgage industry slipped from 533,900 in October to 533,700 in November. The last hiccup in hiring occurred in August 2004 when employment slipped by 100 positions in September 2004. The Mortgager Bankers Association says it expects to see more declines this year in mortgage industry employment as origination volumes decline from 2005 levels. However, the contraction in employment could be offset because purchase mortgage originations, which are labor-intensive, are expected to remain at high levels, MBA financial economist Jay Brinkmann pointed out. And loan officers can still do fairly well with lower volumes because the average loan size has risen substantially over the past few years. "So we might not see some of the same shrinkage" in loan officers and mortgage brokers as in the past, Mr. Brinkmann said.

Zacks.com, the online unit of Zacks Investment Research Inc., Chicago, has placed MFA Mortgage Investments Inc., a New York-based real estate investment trust, on its #5 Rank List -- Stocks to Sell Now.Zacks noted that the REIT's chief executive officer, Stewart Zimmerman, recently predicted an operating profit of $0.05 per share for the fourth quarter. "Three of the four covering analysts reacted by cutting their predictions for full-year earnings," Zacks reported. "The current consensus estimate for 2005 earnings of 33 cents per share is 10 cents less than the forecast of three months ago." Zacks can be found online at http://www.zacks.com.

Union Equity Inc., a real estate development and services company based in Palm Beach, Fla., has changed the name of its wholly owned subsidiary Preferred Properties Real Estate Inc. to Home Loans 24/7 Inc.The name change is aimed at enhancing marketability in the residential lending sector, the company said. Union Equity also announced that it is preparing to launch a revamped and interactive version of KingOffer.com, the online extension of its other wholly owned subsidiary, Home Sales Express Inc., which is aimed at homeowners who want to participate in the for-sale-by-owner market as buyers or sellers. Union Equity can be found online at http://www.unqt.com.

The commercial real estate industry should have another healthy year in 2006, according to an annual real estate forecast by Grubb & Ellis Co., a real estate services firm based in Northbrook, Ill.Job growth will benefit the office and retail markets this year, and "an abundance of capital" will boost investment sales, the company said. Projected new supply of 25 million square feet in the office sector will fall "far short" of expected net absorption of 80 million square feet, reducing the vacancy rate from 14.5% to 12.8% by the end of the year, Grubb & Ellis forecast. "Conditions will be similar to 2005, as the nation's economy continues to expand," said Robert Bach, national director of market analysis at Grubb & Ellis. However, he cautioned that "there are imbalances in the economy that could slow growth as early as the second half of 2006 or even bring the expansion cycle to an early conclusion." The company can be found online at http://www.grubb-ellis.com.

The real estate investment trust sector recorded a total return of 8.3% in 2005, beating other market benchmarks for the period, according to the National Association of Real Estate Investment Trusts.This return on the NAREIT Composite index compares with a 4.91% return on the S&P 500 index and a 1.37% return on the NASDAQ Composite, according to the Washington-based REIT industry trade group. Taking into account only changes in REIT prices, and leaving out dividend payouts, the REIT sector recorded a total return of 2.51% last year. NAREIT can be found online at http://www.nareit.com.

Fitch Ratings has released a formal rating methodology on commercial real estate construction loan pools, declaring itself the first major rating agency to do so.The analysis of such loans is different from that of conventional loans supporting commercial mortgage-backed securities, said Fitch senior director Joe Kelly. "CRE construction loans are secured by collateral that is not a finished product," Mr. Kelly said. "The unpredictable nature of a CRE construction project makes the responsibilities and expertise of the sponsor and servicer critical throughout the entire project. A loan's repayment is contingent upon the successful completion of the construction project because the loans do not initially generate sufficient cash flow to cover debt service." Fitch's CRE construction loan model determines a base default probability and a base loss severity for each loan depending on a project's percentage completion. Fitch director Richard Carlson said servicing this type of loan "relies upon a different skill set than CMBS servicing," and therefore Fitch-rated CMBS servicers "are not automatically qualified by Fitch to service CRE construction loans." Fitch can be found online at http://www.fitchratings.com.

Greater lender discounts for introductory ARM rates and the rising popularity of hybrid ARMs were among the findings of Freddie Mac's 22nd Annual Adjustable-Rate Mortgage Survey.The survey also found smaller savings in interest payments for ARMs relative to fixed-rate loans, largely as a result of the flattening of the yield curve, Freddie Mac said. (A flattening of the yield curve occurs when the spread between short- and long-term rates narrows or disappears, reducing initial interest savings on ARMs versus fixed-rate mortgages.) "When the interest rate difference between a 30-year fixed-rate mortgage and the fully-indexed ARM rate decreases, lenders generally offer a larger initial rate discount on the ARM," said Frank Nothaft, Freddie Mac's chief economist. "The larger initial discounts increase the initial rate benefit of an ARM compared with fixed-rate loans, helping lenders to maintain ARM originations." The survey found that average discounted introductory rates grew from 1.4 percentage points for conventional one-year Treasury-indexed ARMs at the end of 2004 to 1.9 percentage points at the end of 2005.

The average 30-year fixed mortgage rate fell from 6.22% to 6.21% over the seven-day period ended Jan. 5, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate was unchanged at 5.76%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages decreased from 5.79% to 5.78%, and the average rate for one-year Treasury-indexed ARMs rose from 5.15% to 5.16%. Fees and points averaged 0.5 of a point for fixed-rate mortgages and 0.7 of a point for ARMs. "Financial markets paused this week, trying to decipher the December minutes of the Federal Reserve's monetary policy committee, which seemed to hint that the Fed might slow the pace of rate hikes in 2006," said Frank Nothaft, Freddie Mac's chief economist. "As a result, mortgage rates were little changed this week. Interest rates for 30-year fixed-rate mortgages currently are below the monthly averages set in November and December 2005." A year ago, the average 30-year and 15-year fixed rates were 5.77% and 5.21%, respectively, and the average one-year ARM rate was 4.10%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

A leading indicator of existing-home sales declined in November for the third consecutive month, providing further evidence that the housing market is slowing.The National Association of Realtors reported that its index of pending home sales slipped by 2.5% in November, from 123.7 to 120.6. The seasonally adjusted annual index peaked at 129.2 in August. The index reflects sales contracts signed in November, but the actual closings will not occur until December or January. "We are clearly experiencing a market transition, moving from a prolonged boom to a more balanced period of sustainable sales," NAR chief economist David Lereah said. While 2005 is slated to be the fifth consecutive record year for existing-home sales, the NAR economist is forecasting only a 4% decline in sales in 2006. The NAR can be found online at http://www.realtor.org.

Radian Guaranty, a Philadelphia-based mortgage insurer, has announced the completion of a Smart Home transaction, its third and largest, to help manage the company's exposure to nonprime mortgage risk.To mitigate the risk of unexpected losses related to a $6.27 billion pool of nonprime mortgages, Radian ceded a portion of the pool to an unaffiliated reinsurance company that sold to investors $172.9 million of credit-linked notes backed by the nonprime mortgage pool. Radian said it developed Smart Home transactions in 2004 to enable it to distribute mortgage risk to the capital markets, thereby improving its risk profile and facilitating its insurance of nonprime loans. Radian Guaranty is a subsidiary of Radian Group Inc., a global credit enhancement provider that can be found online at http://www.radian.biz.

Jones Lang LaSalle Inc., a Chicago-based real estate services and money management firm, has reported the completion of a merger with Spaulding & Slye, a privately held real estate services and investment company with offices in Boston and Washington, D.C.Jones Lang said it acquired the company for $150 million in cash, adding that there are provisions for "additional consideration and an earn-out that are subject to certain contract provisions and performance." The combined firm will be known as Jones Lang LaSalle, but the Spaulding & Slye name will be retained in certain cases. Spaulding & Slye's integrated principal-investing practice will operate as Spaulding & Slye Investments, and its construction business will be called Spaulding & Slye Construction, Jones Lang said. The company said "substantially all" of Spaulding & Slye's 500 employees will be integrated into Jones Lang, and its executive management team will take on "significant leadership roles." Jones Lang can be found online at http://www.joneslanglasalle.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 554.1 to 545.9 on a seasonally adjusted -- and holiday-adjusted -- basis during the week ended Dec. 30, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 20.8% on the week and were down 9.9% from the level recorded a year earlier. The Purchase Index fell from 432.9 to 418.3 on a seasonally adjusted basis, while the Refinance Index climbed from 1259.1 to 1363.2. The four-week moving average for the Purchase Index fell from 464.8 to 449.2, and the comparable average for the Refinance Index fell from 1428.9 to 1344.5. Refinancings represented 42.7% of total applications, up from 40.2% the previous week, while adjustable-rate mortgages accounted for 28.8%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.21% to 6.15%, and points (including the origination fee) increased from 1.18 to 1.32 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.