Originations

Class N of PNC Commercial Mortgage Acceptance Corp.'s commercial mortgage pass-through certificates, series 2000-C1, has been downgraded from CCC to C by Fitch Ratings.In addition, Fitch affirmed the ratings on 13 other classes in the transaction. The downgrade was attributed to the rating agency's expectation that losses on the deal's specially serviced assets will reduce to zero the balance of class O (which Fitch does not rate) and "significantly affect" class N.

California households at the state median income of $53,840 fell more than $70,000 short of the qualifying income needed to buy a home in the second quarter at the state median price of $530,430, according to the California Association of Realtors.CAR's Homebuyer Income Gap Index is a quarterly analysis of the difference between the median household income and the qualifying income needed to purchase a median-priced, single-family home for the state and for select regions within the state. The HIGI for California increased 28.3% in the second quarter compared with that of a year earlier, when the gap stood at $54,920, the median household income was $52,630, and qualifying income to purchase a median-priced home at $461,280 was $107,550. According to CAR, the San Francisco Bay Area had the highest gap in the state at $102,230, where potential homebuyers had a median household income of $68,140 but needed a qualifying income of $170,370 to buy a median-priced home at $726,920. The Los Angeles-based association can be found online at http://www.car.org.

Arlington Hospitality Inc., Arlington Heights, Ill., has announced the retention of Chanin Capital LLC to serve as its exclusive financial adviser in connection with efforts to restructure its debt or equity.Chanin, an affiliate of Chanin Capital Partners, will assist Arlington's board of directors and management in analyzing the company and its business and financial prospects with an eye toward developing a plan for negotiating with the company's creditors and other stakeholders, Arlington said. Chanin has offices in London, Los Angeles, and New York. Arlington is a hotel development and management company that is the largest owner and franchisee of AmeriHost Inn hotels.

Equity Office Properties Trust, Chicago, has reported a net loss of $205.4 million ($0.51 per share) for the second quarter, compared with net income of $100.6 million ($0.25 per share) in the second quarter of 2004."Our second quarter results reflect our accelerated plan to sell $2 billion to $3 billion of nonstrategic assets, and to further position our portfolio in targeted markets," said Richard D. Kincaid, EOP's president and chief executive officer. He added that EOP is "starting to see the benefits of improved job growth and increased office occupancy in all of our markets." EOP, the largest office REIT by market capitalization, said the quarterly results include a $180.9 million noncash impairment charge related to an asset held for sale, and about $186 million of losses on assets sold. These charges amounted to $0.81 per share, EOP said. The REIT can be found online at http://www.equityoffice.com.

New York Mortgage Trust Inc., a New York-based real estate investment trust, has announced the launch of a wholesale lending division by its taxable REIT subsidiary, The New York Mortgage Co. LLC.The company said the targeted average loan amount for the wholesale unit, headquartered in Bridgewater, N.J., is $350,000. The new unit, launched on July 7, is headed by division president Richard Payne and division chief operating officer Joseph Gorton. Its operations will be centralized. "By using a call center environment where account executives can work closely with operations staff to service brokers, we will be able to provide superior broker service," Mr. Payne said. "This approach will enable us to realize a lower cost per unit than if we were operating in a decentralized platform."

The Market Composite Index, an overall measure of mortgage applications, fell from 754.3 to 752.1 on a seasonally adjusted basis during the week ended July 29, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 0.3% on the week but were up 20.7% from the level recorded a year earlier. The Purchase Index rose from 485.1 to 494.5 on a seasonally adjusted basis, while the Refinance Index declined from 2320.3 to 2250.3. The four-week moving average for the Purchase Index fell 1.3%, from 495.9 to 489.3, and the comparable average for the Refinance Index fell 5.2%, from 2570.3 to 2435.8. Refinancings represented 41.7% of total applications, down from 42.9% the previous week, while adjustable-rate mortgages accounted for 28.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 5.72% to 5.83%, and points (including the origination fee) decreased from 1.31 to 1.16 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

General Motors Acceptance Corp., Detroit, is selling a 60% stake in its commercial mortgage subsidiary GMAC Commercial Holding Corp. to a group of private equity investors for an undisclosed amount.The investors are Kohlberg Kravis Roberts, the leveraged buyout firm, Five Mile Capital Partners, and Goldman Sachs Capital Partners. GMAC will continue to hold a 40% stake in GMACCH, GMAC said. After the expected fourth-quarter closing of the sale, members of the current GMACCH management team will invest in the company and will be on the board of directors of GMACCH, along with representatives of GMAC and the equity investors. GMAC said GMACCH will look to obtain a standalone credit rating so as to enhance its ability to access funds and will repay all intercompany loans to GMAC. "GMACCH is one of the largest providers of commercial mortgage loans and related products and services in the world, and we look forward to working with management to expand an already remarkable platform through enhanced access to the capital markets," the investors said in a news release.

The national office market continued to expand in the second quarter, the ninth consecutive quarter of positive market absorption, according to Colliers International, a Boston-based commercial real estate manager.Absorption totaled 30.5 million square feet, up from 19.2 million square feet in the second quarter of 2004, and the national vacancy rate stood at 14.6%, down from 15.1% in the first quarter and 15.9% a year earlier, Colliers said. "Job creation stayed strong during the second quarter, including 'office-using employment' during this three-month period," said Ross Moore, vice president and director of research at Colliers. ".... We anticipate further growth in the third quarter and for the balance of 2005." (Office-using employment refers to employment related to information, financial, professional, and business services.) The company can be found online at http://www.colliers.com.

After double-digit rises in the Eleventh Federal Home Loan Cost of Funds Index for three of the past four months, the 5-basis-point increase in June is the smallest of the year so far.According to the Federal Home Loan Bank of San Francisco, COFI stood at 2.676% in June, compared with 2.622% in May. According to a chart on the FHLBank's website, average total funds for June were $539.3 billion, made up of average deposit accounts of $304.8 billion, average advances of $140.4 billion, and average other borrowings of $94.1 billion. Total interest expense -- defined as "derived from interest expense reported on deposit accounts, Federal Home Loan Bank advances, and other borrowings, adjusted for the number of days in the month" -- was $1.2 billion. The FHLBank said 33 institutions reported the data used in creating the June index.

The Pending Home Sales Index rose to 126.3 in June, 0.6% higher than in May and 3.6% above that of a year earlier, according to the National Association of Realtors.The index is based on pending sales of existing homes, including single-family, condominium, and cooperative. (A sale is deemed pending when the contract has been signed but the transaction has not closed, a period that typically lasts one or two months, the NAR said.) David Lereah, the NAR's chief economist, said the index indicates that historic levels of home sales will continue in the near future. "Existing-home sales will stay in record territory for transactions in July and August," Mr. Lereah said. "There is some volatility to the index due to the short history of seasonal factors, so we're not predicting another record month, but it certainly is possible." (Resales reached a record high in June.) An index of 100 is equal to the average level of contract activity in 2001, the first year for which the NAR has analyzed data. The association can be found online at http://www.realtor.org.

Senior Housing Properties Trust, Newton, Mass., has increased its $250 million unsecured revolving credit facility to $550 million and extended its maturity to 2009.The real estate investment trust said the facility includes an option to increase the amount to $1.1 billion under certain circumstances and to extend it for another year. The initial interest rate is 100 basis points over the London interbank offered rate, compared with LIBOR plus 145 bps on the previous facility. Wachovia Securities Inc. was the sole lead arranger for the modification of the facility. The REIT can be found on the Web at http://www.snhreit.com.

GMAC Commercial Mortgage, Horsham, Pa., has passed along terrorism-related legal expenses to all the commercial mortgage-backed securities deals it services that include loans originated prior to Sept. 11, 2001, according to Standard & Poor's.The expenses relate to a lawsuit filed by a Texas borrower against GMACCM after the servicer required the borrower to buy terrorism insurance. The case was certified as a class action suit by a Dallas court in June, according to a GMACCM spokesman. Because of the certification, GMACCM went ahead and passed on the legal costs to the deals subject to the class action. However, the servicer is appealing the decision and expects the certification to be reversed, according to the spokesman. S&P said the cost passed along by GMACCM to each trust affected by the action is $2,357, and the total cost recovered is $419,478.

At least one owner of stock in Providian Financial Corp., San Francisco, has come out in opposition to the proposed acquisition of the company by Washington Mutual Inc., Seattle.Boston-based Putnam Investments said it regards the price as inadequate. "In a consolidating industry and in light of the recently announced Bank of America/MBNA transaction, mono-line credit card companies such as Providian represent an increasingly scarce asset that should command a higher price," Putnam said. "By accepting a price well below the fair value of the Providian common stock, Putnam believes the merger would transfer significant value to Washington Mutual's existing shareholders, at the direct expense of Providian's shareholders." Putnam has the right to vote approximately 7.5% of Providian's common stock. The deal was originally valued at $6.45 billion, with 89% of the purchase price being paid in Washington Mutual stock. On June 6, the day the deal was announced, WaMu closed at $40.54. As of noon Aug. 1, WaMu was trading at $42.20, down $0.08, while Providian was trading at $18.92, up $0.02.

June was the best month of the year by far for the nation's private mortgage insurers, according to data issued by the Mortgage Insurance Companies of America.The organization's members wrote $23.15 billion of primary new insurance in June, up nearly 30% from $17.97 billion in May, which had been the previous best month of the year. By category, the $15.43 billion of traditional insurance and $7.72 billion of bulk MI represents the best month for each. As of midyear, there was $605.8 billion of primary insurance in force and $140.8 billion of primary risk in force. The MI companies wrote $28.9 million of pool insurance during the month and there is now $9.15 billion of pool risk in force, down from $11.9 billion a year ago. The cure/default ratio continues to slip. There were 29,779 cures and 40,622 defaults in June, bringing the ratio to 73.3%, down from 77.8% in May. The ratio peaked at 112.5% in February. MICA membership consists of all of the industry's participants except Radian. The organization can be found online at http://www.micanews.com.

Public Storage, a Glendale, Calif.-based self-storage real estate investment trust, is looking to acquire Seattle-based Shurgard Storage Centers, another self-storage REIT, in a merger proposal that Shurgard has rejected.Public Storage said it has made an offer in which each share of Shurgard would be exchanged for 0.80 shares of Public Storage, which would value Shurgard common shares at $53.40. This represents a 14% premium over Shurgard's closing stock price on July 29, Public Storage said. Such a merger would create an entity with a total enterprise value of about $50 billion, according to Public Storage. Shurgard said in a written release that its board of directors has evaluated the proposal and rejected it, believing it to be "good for Public Storage, but bad for Shurgard." Speaking in a teleconference about future moves relating to the offer, Public Storage management said they are "well-advised and familiar with all of our options."

Sixteen classes from eight mortgage-backed securities transactions issued in 2001 by Credit Suisse First Boston Mortgage Securities Corp. have been downgraded by Moody's Investors Service.In addition, Moody's upgraded one class from one of the CSFB deals and confirmed the rating on one other class. The downgrades were attributed to higher-than-expected losses, especially as a result of high loss severities. The securitizations are backed by pools of subprime first-lien adjustable- and fixed rate mortgages, Moody's said. The rating agency can be found on the Web at http://www.moodys.com.

Fitch Ratings has downgraded the senior unsecured debt and preferred stock ratings of Shurgard Storage Centers Inc., a Seattle-based real estate investment trust.The debt rating was lowered from BBB to BBB-minus, and the preferred stock rating was lowered from BBB-minus to BB-plus. The Rating Outlook remains negative, the rating agency said. The downgrades reflect "a weakening trend in interest coverage metrics" over the past two years and an increase in the company's debt leverage from 43% at the end of 2003 to 53% as of March 31, Fitch said. Fitch can be found on the Web at http://www.fitchratings.com.

ACC Capital Holdings Corp., Orange, Calif., says it has set aside $325 million to settle claims stemming from the residential lending practices of Ameriquest Mortgage, its retail subprime affiliate.ACC issued a statement about the legal reserve on the same day that President Bush nominated ACC owner Roland Arnall to be ambassador to the Netherlands. In the statement, ACC -- parent of both Ameriquest Mortgage and wholesale giant Argent Mortgage -- said it has "recorded a provision" in connection "with previously announced discussions with representatives of the financial regulatory agencies or attorneys general offices of thirty states." The company said the $325 million is the maximum amount it will have to pay to the 30 states. The company, which recently settled lending allegations with Connecticut, noted that it has not yet reached a definitive final agreement with the 30. "There can be no assurance such an agreement will be reached," ACC says, adding that it is "focused on resolving the issues under discussion with these agencies so as to reach a resolution that is fair to customers and fair to the company."

Class B-8 of DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1999-CG1, has been downgraded from CCC to CC.In addition, seven classes in the transaction were upgraded and the ratings on six other classes were affirmed. The downgrade was attributed to expected losses on two specially serviced loans -- a retail property in Roanoke Rapids, N.C., and a multifamily property in Houston -- that will ultimately deplete class C and hurt the credit enhancement of the non-investment-grade classes. As of the July distribution date, the pool's aggregate principal balance had been reduced from $1.24 billion at issuance to $1.10 billion, and the deal had realized $18.6 million in losses, the rating agency said.

Equity Residential, Chicago, has reported net income of $128.3 million ($0.44 per share) for the second quarter, compared with $108.6 million ($0.39 per share) for the second quarter of 2004."Business continues to strengthen, and the table is set for a strong second half of 2005 and a very good 2006," said Bruce Duncan, Equity Residential's chief executive officer. The multifamily real estate investment trust said the quarterly increase in earnings is "primarily attributable to $0.10 per share in higher gains on property and condominium sales." This was partially offset by higher interest expense and compensation expense related to the retirement of Mr. Duncan, the REIT said. Equity Residential, the largest multifamily REIT by market capitalization, can be found online at http://www.equityapartments.com.