These prices are insane-rates below 3% for rent regulated multi-family

Immediately after the Christmas holiday, retailers around the region and the nation offer major reductions on merchandise in their stores.

In the same vein of discount pricing, financing for low leverage rent regulated multifamily apartment buildings in the New York metropolitan area are offering perhaps the lowest interest rates in history.

Can you imagine, financing for five year loans, with interest rates below 3%. According to Barry Stein, principal of Roman & Stein Associates, "banks and insurance companies are offering these special rates for premier properties and borrower's with low leverage, subject to amortization under a 25 to 30 year schedule, at below 3%." Rates can vary by as much as 50 basis points based upon the term (three to ten years) and in certain instances interest only and 40 year amortization schedule.

Competition is keen by the lenders with certain financing institutions offering

exception low closing costs, capping the legal and appraisal fees.

Instead of visiting a department store to shop to a new men suit,  I suggest that owners cal around the marketplace take advantage of these low, low raes  and evaluate refinancing of residential properties.

Posted on January 4, 2013 .

Record number of Senior Housing Loans funded in 2012

The Department of Housing and Urban Development (HUD) processed nearly $5.5 billion of senior housing loans in 2012 through its Section 232 LEAN program, with volume skyrocketing more than 66% above last year's $3.3 billion record.

The HUD LEAN program offers funding for the acquisition, refinance, substantial rehabilitation, and new construction of various kinds of senior living properties.

Section 232 is an FHA-Insured loan product that covers housing for the frail elderly - those in need of supportive services. Nursing homes, assisted living facilities and/or Alzheimer's-care, and board and care are all examples of this type of housing (a project may include more than one type).

Section 232 may be used to finance the purchase, refinance, new construction, or substantial rehabilitation of a project. A combination of these uses is acceptable - e.g. refinance of a nursing home coupled with new construction of an assisted living facility.

HUD's LEAN program became the largest single source of debt capital to the senior housing industry.

HUD LEAN is based on the Toyota manufacturing philosophy, which focuses on efficiency and continuous improvement in an effort to eliminate waste and unnecessary people, steps, or other activities. For HUD, the approach is an effort to continually streamline and improve upon the application and approval process for its senior living/health-care programs.      


Posted on December 18, 2012 .

SBA Disaster Assistance Available to Private Non-Profit Organizations in New Jersey

The U.S. Small Business Administration announced today that certain Private Non-Profit Organizations (PNPs) in the State of New Jersey that do not provide critical services of a governmental nature may be eligible to apply for low interest rate disaster loans.  These loans are available as a result of a Presidential Disaster declaration for Public Assistance resulting from damages caused by Hurricane Sandy.

PNPs located in Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren counties in New Jersey that provide non-critical services are eligible to apply.  Examples of eligible non-critical PNP organizations include, but are not limited to, food kitchens, homeless shelters, museums, libraries, community centers, schools and colleges.

PNP organizations may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets.  The SBA may increase a loan up to 20 percent of the total amount of disaster damage to real estate and/or leasehold improvements, as verified by SBA, to make improvements that lessen the risk of property damage by future disasters of the same kind.

The SBA also offers Economic Injury Disaster Loans to help meet working capital needs, such as ongoing operating expenses to PNP organizations of all sizes.  Economic Injury Disaster Loan assistance is available regardless of whether the organization suffered any physical property damage.

Interest rates are as low as 3 percent with terms up to 30 years.  The SBA sets the loan amounts and terms based on each applicant's financial condition.

PNP organizations are urged to contact their county emergency manager to obtain information regarding how to submit a request for possible public assistance to FEMA.

Applicants may apply online using the Electronic Loan Application (ELA) via SBA's secure website at

Disaster loan information and application forms may be obtained by calling the SBA's Customer Service Center or by sending an e-mail to Applications can also be downloaded from

The filing deadline to return applications for physical property damage is January 4, 2013.  The deadline to return economic injury applications is August 5, 2013. 

Posted on December 18, 2012 .

Homeowners evaluating 20 year fixed rate mortgages

With homeowners refinancing lowering their interest, many of the borrowers are reducing the term of the loans.

The Mortgage Bankers Association(MBA) report, 30 year fixed rate mortgages are still the most popular loan term for both and refinance customers, but 20 year mortgages are becoming increasing popular, especially among refinancers.  

"Twenty-year fixed-rate loans are the third most popular mortgage product, behind 30 and 15-year fixed-rate loans, followed by 10 and 25-year mortgages," says Matthew Robinson, senior public affairs specialist with the MBA.

The popularity of these loans, especially among refinancers, has grown enormously in the last year alone. The MBA says that other-term loans represented more than 15 percent of all refinance applications in August 2012 (latest data available), an increase of 23.25 percent compared to last year.  

Other-term loans represented just 1.91 percent of purchase applications in August 2012, but still an increase of 13.45 percent compared to August 2011.

Qualification standards for a 20 year mortgage are the same as for a 30 year, or 15 year fixed rate loan. The only major difference is that a borrowers income must be sufficient to cover the higher payment.  

Home prices, in terms of actual monthly mortgage payments made by home owners, are cheaper today than they have been for more than 25 years, according to a recent analysis of Case-Shiller home values and mortgage rates by the Department of Numbers web site.

The site calculated the cost of a actual monthly payments on a 30-year mortgage at prevailing historic mortgage rates to finance the purchase of a home at Case-Shiller's media price levels since the series began in the late 1980s.

Even though real house prices peaked at the beginning of 2006 and are now back to early 1999 (and before that mid 1990) levels, today's record low mortgage rates make monthly mortgage payments lower today than they have been since the Case-Shiller index came into being.

Posted on December 18, 2012 .

"If I can make it there, I'm gonna make it anywhere: It's up to you-New York, New York

Everyone wants to operate a business in New York, New York. Companies from around the world travel to the Big Apple to expand their presence in the market.

While the costs of operating a business in the City and the region may be rather expensive, the rewards can be lucrative. Nevertheless, each and every year, a number of financial institutions from around the globe decide its time to expand in the region. As the year is drawing to a close, a number of new entrants from regional and national banks are seeking to gain presence and market share in offering financing for commercial real estate.

One of the most active real estate lenders during the beginning of the 21st century was North Fork Bank. The Long Island based bank began an aggressive move into New York City in 1991 and made at least ten acquisitions over the next fifteen years. In December, 2006 Capital One Financial Corporation acquired North Fork in a transaction valued at approximately $13.2 billion.

February 1, 2013 is the date when Herald National Bank, a subsidiary of Bank United will become Bank United. Over the past few months, a number of former North Fork commercial lenders have joined the ranks of new employees at Herald National Bank. November 12th was the effective date for the first day of employment of Paul Leprohon a former employee at North Fork Bank. Mr. Leprohon joined the New York City office of the bank, joining Paul Breuer who is based in Melville, Long Island. Both individuals spent many years working together at Chase Manhattan Bank and at North Fork Bank. These individuals will be working with the chairman and vice chairman of Bank United, John Kanas and John Bohlsen, both formerly of North Fork Bank.

Banco Popular is a $37 billion holding company based in Puerto Rico. Over the past few years the bank has been rebranding in the United States shifting to a community bank. In June of this year, the bank changed the name of its New York City operation to Popular Community Bank. The bank which has been operating in New York for fifty one years was an active lender in providing construction and real estate financing. The combination of the recession and economic crisis of 2008 caused the bank to reduce its exposure in this market.

This summer, Sophia Haliotis joined as a senior vice president for the $8.7 billion asset Popular Community, the U.S. unit of Popular. She joined the bank to lead the commercial banking and real estate team's expansion in retail, industrial, multifamily apartment and nonprofit refinancing sectors.

Prior to joining Popular, she was responsible for structuring and approving JP Morgan's commercial real estate loans in the New York, New Jersey, Washington, D.C. Boston and Pennsylvania market. Since she joined the banks the bank has hired a number of seasoned real estate lenders.

"While Popular Community Bank never really exited the Commercial Real Estate Business, given the recent economic downturn like many bank, it had to direct its attention to the health of its loan portfolio", said Ms. Haliotis.

"Currently, the bank is re-focusing on growing its commercial real estate book as well as its overall commercial lending. Growth is expected to come from a new initiative in multi-family lending with competitive pricing and terms to be delivered by a team of bankers who have deep knowledge of the market and its players. We will also continue to grow our existing commercial real estate business and accommodate construction financing for select residential projects", she added.

In July of this year, Hudson City Bancorp announced that it will enter the lucrative commercial real estate market. The bank announced that it would initially participate in syndicated commercial real estate and multi-family mortgage loans. On August 27th, M & T Bank Corp, agreed to buy Hudson City Bancorp for $3.7 billion.

With the acquisition, M & T Bank one of the pre-eminent real estate lenders in metropolitan New York will expand its presence in providing commercial real estate and middle market financing to companies in markets where Hudson City has an extensive branch network, especially in the State of New Jersey, Long Island and Connecticut.

Tristate Capital Bank provides commercial and industrial banking, commercial real estate lending and private banking services for middle market businesses. The bank was founded in 2007 and is based in Pittsburgh, Pennsylvania. It has operations in Philadelphia, New Jersey, and Cleveland, Ohio. This past summer, the bank opened its New York City location at 623 Fifth Avenue. In August, the bank announced the hiring of Thomas Gilmartin, to serve as regional president of the company's New York City Market.

William Schenck III, TriState Capital Bank, President commented on the banks growth and expansion plans, "Out bank's focus is serving middle market businesses with revenues in the $20MM to $200MM range and high net worth individuals. We are in Cleveland, Pittsburgh, Philadelphia, and New Jersey and are excited about now being part of the New York metropolitan market.

Mr. Gilmartin, the bank's regional president, said "The New York team will focus mainly on middle market and commercial real estate business. Our success will come from hiring talented, committed and successful bankers with a couple of decades of experience in the market. The bank is a business bank, not having a retail platform, thus, we are able to provide the high level of personalized service that our clients deserve and expect".

Before the end of the year, People's United Bank is expected to open its flagship, New York City branch at 250 Park Avenue. In July, the bank announced that John Costa joined the bank's Commercial Banking group as Executive Vice President and head of the bank's New York commercial real estate business. Prior to joining People, Mr. Costa headed Santander Real Estate Capital, where he led both new loan origination and the management of $21 billion portfolio of real estate loans, the majority of which were secured by multi-family properties.

In the press release issued by the bank announcing the hiring of Mr. Costa, Jeffrey Tengel, Senior Executive Vice President, Commercial Banking said, "We are pleased to have John join us to grow our lending activities in the metro New York market where we have been active for years. In addition to the hiring of Mr. Costa, the bank hired two other senior lenders from Santander, specializing in multi-family financing.

"People's United has been an active participant in New York City commercial real estate finance for many years, covering the market with lenders based just outside the city proper", said John Costa. "The bank has lent consistently throughout the financial downturn. To further its commitment to the NYC market, the bank is opening a branch on Park Avenue and has opened a commercial real estate office on Third Avenue, staffed with a dozen loan officers. This team will be focused on building client relationships in the New York Market."

Minneapolis based U.S. Bancorp, with $352 billion in assts, is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States. Of the past decade, the bank with regional offices in Boston and McLean, Virginia have provided financing for commercial real estate for private investors, real estate investment trusts and private equity funds. Earlier this year, the bank hired Gregory Fierce, a seasoned real estate lender to oversee the loan production and originations in New York City. "U.S. Bank has done several deals in the market and we have a number of well known established clients in this marketplace", said Mr. Fierce. "I joined the bank to focus more on the New York City marketplace. With that groundwork laid in 2012, we plan to expand our portfolio further in 2013".

California based First Republic Bank is expanding it's presence in the commercial real estate lending in the New York City Market. Last December, the leading private bank and wealth Management Company announced that Garrett Sokoloff joined First Republic as Managing Director in New York City. Mr. Sokoloff is an experienced real estate lender who had worked for UBS as the co-head of conduit origination in the real estate finance group. Over the past year, his team has become a major force in providing commercial real estate financing in the region.

Another California headquartered bank is Los Angeles based City National Corp, the parent company of City National Bank with total assets of $26.3 billion at September 30, 2012. The bank opened an office in New York City and added a second office in Times Square in 2011. This summer the bank, executed a 15 year lease for retail and office space of approximately 45,000 square feet at 400 Park Avenue which has served as its New York City headquarters since the company entered the market in 2002.

Industry leaders expect the bank to join the ranks of new lenders providing financing for commercial real estate. The banks Chairman and CEO, Russell Goldsmith, said, "After nearly a decade of solid growth since opening our office at 400 Park Avenue, City National today has ore than 80 colleagues, two full service offices, nearly $2 billion in loans and deposits, and a full range of business and private banking services in Manhattan. "This expanded presence at 400 Park will allow us to further grow our brand recognition, capabilities, clients and colleagues base. It is a selective and strategic expansion that reflects our continuing commitment to New York".

These banks as well as others all want to be in New York, New York. In the words of the late Frank Sinatra, "If I can make it there, I'm gonna make it anywhere: It's up to you-New York, New York.

Posted on December 18, 2012 .

Will the Holiday shopping help major retailers to increase their sales per square foot?

Retailers from around the world are hoping that we have a very happy holiday season. Brick and mortar retailers hope that e-commerce won't have has much as an impact on the retail sales in their stores.

RetailSails, a retail and consumer good consulting firm has released a list of the top ten retailers with the highest sales per square foot. Retail sales per square foot ranged from $6,050 for Apple to $1,081 per square foot for grocer Fairway market.

At the onset of the 21st century a number of these retailers were in their infancy. You may be surprised that the first Apple Store debuted on May 19th, 2001 with locations in Glendale, California and McLean, Virginia. Vancouver, British Columbia, Lululemon Athletica, the self described yoga-inspired athletic apparel company, was founded in 1998 and opened its first store in the beach area of Vancouver. Today, the company ranks in third position as the highest sales per square foot at $1,936.

The date was December 2002 when True Religion Brand Jeans was established in Los Angles, California. Over the past decade the company has opened more than 900 branded boutiques and specialty stores in 50 countries and 6 continents. The flagship store of the chain is located in Manhattan Beach, California in late 2005. The high price denim manufacturer ranks in seventh position with sales per square foot of $1,227.

Here is the RetailSales list of the top ten retailers with the highest sales per square foot (psf):

1.         Apple                                        $6,050 psf

2.         Tiffany & Co.                              $3,017 psf

3.         Lulelemon Athletica                    $1,936 psf

4.         Coach                                       $1,871 psf

5.         Michael Kors                             $1,431 psf

6.         Select Comfort                           $1,314 psf

7.         True Religion                              $1,227 psf

8.         Vera Bradley Designs                 $1,186 psf

9.         Birks & Mayors                          $1,082 psf

10.       Fairway Market                          $1,081 psf

Posted on December 18, 2012 .

More people renting versus purchasing a residence

The residential rental market continues to grow around the nation and in the Metropolitan region. Vacancy rates are record lows and rents near record highs have not had any immediate effect on individuals purchasing versus renting a residence.

Freddie Mac Multifamily Research Group released its multifamily real estate market demand forecast for the next several years. The paper forecasts a base case that entails slow economic growth with an additional 1.7 million new multifamily renter households between now and 2015.

In addition, the paper forecasts that the multifamily market and demand for rental housing will remain solid and healthy during the same period of time of accelerated growth.

The forecast highlights of the report:

-                 Recent declines in homeownership related to economic stress and high foreclosures in the single family housing market have benefited the multifamily market.

-                 The homeownership rate will drop 1 to 2 percentage points if the current slow recover continues.

-                 The single family rental market, a growing and distinct market from multifamily, has expanded 16 percent (about 3 million units) since 2007.

-                 The multifamily market demand is expected to be strong through 2015 primarily due to demographic trends and a decreasing national homeownership rate.

-                 Rental demand will continue to grow faster than historical averages.

-                 Multifamily demand is likely to be 1.7 million new renter households between now and 2015 (slow growth prediction). If the economic recovery accelerates, demand will be 1 million new renter range; and if no recovery, then in the 1.6 million range for new renters.

David Brickman, SVP, Freddie Mac Multifamily said, "the research supports the optimism that currently pervades the multifamily market. It confirms that multifamily is a bright spot in the real estate market and the economy more broadly, and it will likely continue to shine for quite some time.

"The economic data indicates that current rental markets are very strong with low vacancy rates, rising rents and solid demographic trends. What this research demonstrates is that these conditions are likely to remain in place for several years to come."

Posted on December 18, 2012 .

Major healthcare institutions and insurance companies spending big bucks on advertising

The business of healthcare has undergone major changes over the past two decades. The market is expected to change with the passage of Obama care and the aging of the population. Patients are who are hospitalized is staying shorter lengths of stays, and elective surgery is now being offering on the weekends. Another aspect of healthcare is that more and more healthcare institutions are spending big advertising budgets to attract and educate patients.

Every one of the leading healthcare institutions in the New York City marketplace is currently advertising. A number of healthcare leaders consider the advertising as a source of branding of their institutions as well as a means to attract patients to their institutions. Spokesman who include former Mayor Ed Koch as well as other patients are frequently appearing in all forms of advertising.

HealthLeaders Media reported "there is a certain finesse to choose the right celebrity spokesperson for any organization, but it is an especially lofty task for a hospital. The actor or sports figures (usually they are film stars or professional athletes) must be well known, but not too flashy; relatable, but respected, amiable, but competent and informed."

Former gold medal gymnast Mary Lou Retton is the new celebrity spokeswomen for Morgantown West Virginia Hospital, reported the Associated Press. She has appeared on television, radio and print ads.

In a recent issue of Protocol, a healthcare marketing report discusses the advantages of having a strong and consistent brand. In the article titled "Why Branding Still Matters for Hospital Marketers, "Protocol examines four reasons branding should remain a priority in the healthcare industry:

  1. Strong healthcare brands control their own destinies;
  2. A clear brand position aligns physicians and staff,
  3. Brand tools ensure consistent communications; and
  4. Branding supports multichannel and social media initiatives.

"Building a strong brand isn't easy, especially for healthcare organizations that once held a monopoly for care, and increasing financial exposure is making patients more likely to question the cost or need for expansive medical care", said, Mark Shipley, President and Chief Strategic Officer of Smith & Jones, the publisher of Protocol. "Hospitals are now forced to brand and market their services to retain even their local consumers care spending'.

The accounting and consulting firm of PwC report urges academic medical centers to enhance their brands by holding faculty accountable for cost and quality.

Academic medical centers also can build their brands globally through affiliations or acquisitions. "As the world become richer, people want to spend their money on education and health so it's very appropriate for Academic Medical Centers to have a global strategy, " Stephen M. Cohen, executive vice provost at New York's Weill Cornell Medical College, says in the report.

While public health care policy and the factors that influence consumer preference and purchasing decisions about health insurance are rapidly shifting, the 2012 Harris Poll EquiTrend (EQ) study finds that brand equity remains strong among the top-ranked health insurers.

"The definition of consumer is 'one that consumes'," says Debra Richman, Senior Vice President of Healthcare Business Development & Strategy at Harris Interactive, "More than ever before, consumers are paying increased attention to their health care options and selecting products and services they prefer to consume. As a result, positive brand recognition has become and will increasingly be critically important."

Richman notes, "Consumer behavior in health care is beginning to mirror how consumers behave when making other purchasing decisions, whether for consumer goods or financial services. Consumers are evaluating brand equity, user experience, convenience, and product or service value." Among the ten competitive brands included in the 2012 Harris Poll EquiTrend study, Blue Cross Blue Shield emerges as the top-ranked health insurer. This is the third consecutive year Blue Cross Blue Shield has earned the Health Insurance Brand of the Year accolade. United Healthcare places second and regional insurer, HealthNet, secures third place in this consumer-choice study

"Brand reputation is now one of the key criteria when selecting a health plan-this is especially important in a market where benefits and costs may be similar, which will definitely be the case in an insurance-exchange environment. Those companies with strong brand equity will be well-positioned to take advantage of such market changes and successfully differentiate themselves among competitors," Richman concludes.

Posted on December 18, 2012 .