Originations

Shurgard Storage Centers Inc., Seattle, has announced plans for a public offering of 4 million shares of its class A common stock.Shurgard, a real estate investment trust specializing in self-storage centers, said it has granted the underwriters an option to buy up to an additional 600,000 shares of the stock to cover any overallotments. The managing underwriters for the offering are Citigroup Global Markets Inc., Banc of America Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Inc.

1031 Exchange Options has tapped Jim Noack, the founder and president of Monument Mortgage, for the position of chief executive officer.The Lafayette, Calif.-based 1031 Exchange Options works with investors who want to "convert their investment property holdings into a tenancy-in-common investment," the company said. Mr. Noack, who joined the company in May, will help manage the company's growth. David Waal, the company's former CEO, is taking over the position of managing director, and he will focus on business development. "The company's growth has exceeded the original forecast and is accelerating at a 300% year-over-year growth rate," said Cary Losson, founder and president of 1031 Exchange. Mr. Noack "will facilitate this rapid growth and further expand the company's national presence," he said.

The ratings on two classes of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1997-XL1, have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: class G, from BB to B, and class H, from B to CCC. The ratings on four other classes in the deal were raised, and three others were affirmed. S&P attributed the downgrades to the deterioration in the performance of four of the seven remaining nondefeased loans, which represent 25% of the outstanding pool balance. The loans are: Grand Kempinski Hotel, secured by a luxury hotel in Dallas; Mark Centers Pool, secured by 17 community and neighborhood retail shopping centers in seven Eastern states; Westgate Mall, secured by a regional mall in Fairview Park, Ohio; and Westshore Mall, secured by a mall in Holland, Mich. S&P can be found on the Web at http://www.standardandpoors.com.

The housing markets in five metropolitan statistical areas in four states show the highest probability of improvement over the next two years, according to a mortgage risk index maintained by United Guaranty Corp., Greensboro, N.C.The top-ranked MSAs in the index for the third quarter are: Beaumont and Amarillo, Texas; Salem, Ore.; Santa Cruz, Calif.; and Kalamazoo, Mich. States showing the highest probability of improvement are Oregon, North Carolina, Vermont, South Carolina, and Colorado, UGC said. The report is based on UGC's quarterly ACUFactor mortgage risk index, which projects geographic market risk for the top 200 MSAs over the next four to eight quarters, the company said. The index uses a scale of 1 to 10, with 1 representing the least likelihood of declines in model variables, which include home prices, the local economy, population stability, and mortgage delinquency trends. UGC can be found online at http://www.ugcorp.com.

Docucon Inc., Latham, N.Y., has entered into a nonbinding letter of intent to merge with I.L. Products Inc., a San Antonio-based corporation doing business as GrayStone Mortgage.Under the proposal, GrayStone would become a wholly owned subsidiary of Docucon, GrayStone said. Further details were not disclosed. The letter of intent was entered into on May 30, but the announcement was made July 7 by GrayStone. GrayStone can be found on the Web at http://www.paperbiz.com.

Horizon Bancorp, Michigan City, Ind., has announced the acquisition of St. Joseph, Mich.-based Anchor Mortgage.The terms of the transaction were not disclosed. Anchor will continue to operate under the Anchor Mortgage name from its current location, Horizon said. Horizon is a bank holding company serving northwestern Indiana and southwestern Michigan. It can be found on the Web at http://www.accesshorizon.com.

Regency Centers, Jacksonville, Fla., has expanded its joint venture with Macquarie Countrywide Trust of Australia with the addition of five new properties to the venture.Regency, a real estate investment trust, said it is contributing five shopping center grocery-anchored properties in Portland, Ore.; Atlanta, Ga.; Panama City, Fla.; Columbia, S.C.; and Birmingham, Ala. The total gross sale price was $55.3 million. Regency will retain a 25% interest in the properties and manage them on behalf of the venture. With the addition of these properties, the venture will own 20 shopping centers with a total investment of approximately $230 million, Regency said. The REIT can be found online at http://www.regencyrealty.com.

Health Care Property Investors, a Newport Beach, Calif.-based real estate investment trust, has priced an offering of 1.4 million shares of common stock at $41.50 per share.The net proceeds are expected to be about $58 million, the REIT said. Merrill Lynch & Co. was the sole underwriter for the offering. The REIT can be found online at http://www.hcpi.com.

Classes E-3 and E-4 of TrizecHahn Office Properties Trust, series 2001-TZH, have been placed on Rating Watch Negative by Fitch Ratings due to deteriorating performance.The rating agency said the portfolio's stressed net cash flow had declined from $171.9 million at issuance to $155.9 million based on unaudited statements for the trailing 12 months ended March 31. The portfolio's average occupancy had fallen from 95% at issuance to 84%, Fitch reported.

The series A City of Indianapolis multifamily revenue bonds (Sunrise Apartments Project) have been downgraded from B to CCC by Fitch Ratings.The $3.3 million of bonds are secured by a first mortgage on the 320-unit Sunrise Apartments project, which is required by state and federal laws to offer 20% of its units to families with incomes at or below 50% of the area's median income. Fitch attributed the downgrade to "declining operating performance, the exhaustion of the series A debt service reserve balance, and the property's weak operating performance and outlook."

Two classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 1999-C1, have been downgraded by Fitch Ratings.The downgrades were as follows: class K, from B-plus to B, and class N, from CC to C. The ratings on the 11 other Fitch-rated classes in the deal were affirmed. Fitch attributed the downgrades to weakening pool performance and expected losses on several loans in special servicing. The estimated losses are expected to "deplete class O and affect class N, which significantly reduces the credit support available to class K," the rating agency said. (Fitch does not rate class O.) Fitch can be found online at http://www.fitchratings.com.

CMG Bancorp, San Ramon, Calif., has purchased the West Coast net branch network of RBC Mortgage, Chicago.The terms of the deal were not disclosed. The June issue of Origination News, a MortgageWire affiliate, reported that CMG was to be the buyer, but the deal was not announced until July 2 in a statement from CMG. The branches were part of Pacific Guarantee Mortgage, a net branching firm acquired by Prism Mortgage, which in turn was acquired by Royal Bank of Canada. "Over the last several years, CMG has been invited to participate as an acquirer of various net branch organizations," said CMG chairman and chief executive Christopher M. George, "but either the timing or the target's fit with CMG's unique model wasn't perfect. That changed with PGM." The West Coast branches originated $6.2 billion last year. In a separate deal reported in the July ON, Pinnacle Financial Corp. purchased the Government Services Division of PGM, which is also known as the East Coast network.

The average 30-year fixed mortgage rate jumped to 5.40% for the week ending July 4 from 5.24% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 4.63% to 4.75%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages rose from a record low of 3.45% to 3.49%. Fees and points averaged 0.5 points for fixed-rate mortgages and 0.7 points for ARMs. "Mortgage rates are back to the same level as they were in mid-May this year, with the exception of the one-year ARM," said Frank Nothaft, Freddie Mac's chief economist. "Last week's Federal Reserve Board policy statement led financial markets to expect that the economy should begin to pick up soon, and that caused bond yields to rise pretty steadily over the last number of days." A year ago, the average 30-year and 15-year fixed rates were 6.57% and 6.03%, respectively, and the average one-year ARM rate was 4.58%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Mortgage lenders added over 10,000 employees to their payrolls in May as the refinancing boom and record home sales continued to stretch industry capacity, according to an estimate based on data from the U.S. Bureau of Labor Statistics.Using BLS data released July 2, MortgageWire estimates that employment in the mortgage banker/broker sector jumped from 398,100 in April to 409,000 in May. Owing to changes announced last month, the BLS no longer provides an official estimate of employment in the mortgage industry. MW's estimate uses two BLS data series from the June employment report to approximate the employment numbers for May. The BLS can be found online at http://stats.bls.gov.

Aames Financial Corp., Los Angeles, has announced the redemption of $127.9 million principal balance of its 9.125% senior notes due November 2003 at par plus accrued and unpaid interest.The subprime home equity lender said the redemption represented all its outstanding senior notes. In connection with the redemption, Aames said it borrowed $74.1 million through a financing facility with Greenwich Financial Capital Products Inc. that is secured by certain residual assets and servicing advances. Aames also reported the redemption of $4.8 million of 5.5% convertible subordinated debentures due 2012. A. Jay Meyerson, the company's chief executive officer, said the redemptions were "a major milestone" in its efforts to improve its balance sheet by reducing nonrevolving borrowings and to improve its strategic position. "With the restrictions of the senior notes removed, the company has increased its corporate financial flexibility and its options for competing in the secondary and capital markets," he said. Aames can be found online at http://www.aames.net.

MeriStar Hospitality Corp., Washington, has completed the sale of $170 million of 9.50% convertible subordinated notes due 2010.The total included $15 million to cover the underwriter's overallotments, the real estate investment trust said. The notes are convertible (subject to adjustment in certain circumstances) into MeriStar common stock at a conversion price of $10.18 per share, the REIT said. The offer was underwritten by Lehman Brothers. The REIT can be found online at http://www.meristar.com.

Equity real estate investment trusts outperformed the S&P 500 index for the first six months of the year, according to data compiled by SNL Financial.While equity REITs provided a total return of 14.4% for the period, the S&P 500 recorded an 11.8% total return, the Charlottesville, Va.-based information provider reported. However, taking into account performance for the second quarter alone, the S&P 500 index came out ahead, with a total return of 15.4%, compared with 13.1% for the equity REIT sector. Both indexes outperformed their year-ago total returns, SNL said. Among the various REIT sectors, manufactured housing posted a total return of 27.4%; health care, 26.5%; hotel, negative-2.1%; office, 13.3%; retail, 11.6%; multifamily, 9.9%; and industrial, 8.5%. For the second quarter alone, the hotel sector provided a strong 19.7% return, indicating a turnaround in that sector. SNL can be found online at http://www.snl.com.

Two classes of RMF commercial mortgage pass-through certificates series 1995-1 have been downgraded by Fitch Ratings and removed from Rating Watch Negative.Class E was downgraded from BB-minus to B and class F was downgraded from CCC to C. In addition, Fitch affirmed the ratings on the six other Fitch-rated classes in the deal. The downgrades were based on continuing declines in the performance of the transaction, expected losses on a certain loan pool, and growing interest shortfalls, Fitch said. "The deal's weaker operating performance is due to higher operating costs, heavy competition, weak demand, and regulatory compliance issues," the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

The National Association of Home Builders has revised upward to 985,000 units its forecast for new single-family home sales this year, which would break last year's record of 973,000.The association is projecting that long-term mortgage rates will average 5.3% for this quarter and rise slowly to an average of 5.5% in the fourth quarter. "Home sales actually have strengthened in the wake of the war, and are now on track to beat our previous forecasts and support the economy over the balance of the year," NAHB president Kent Conine said. "Two key factors for our upbeat outlook include the successful passage of President Bush's economic stimulus package, which will strengthen job and income growth in the second half of the year, and the recent cut in interest rates by the Federal Reserve, which will help maintain very favorable interest rates on home mortgages." The association can be found online at http://www.nahb.com.

The Market Composite Index, an overall measure of mortgage applications, rose to 1635.5 on a seasonally adjusted basis during the week ended June 27 from 1554.5 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 5.1% on the week and 127.1% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index increased from 411.2 to 438.4, and the Refinance Index climbed from 8204.6 to 8599.1. Refinancings represented 75.6% of total applications, down from 75.8% the previous week, while adjustable-rate mortgages accounted for 13.4%. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.10% to 5.23%, and points (including the origination fee) decreased from 1.62 to 1.45 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.