MAY 6, 2015 Banks’ Bad-Debt Tally Dropped 33% in 2014 Continuing their long cleanup from the downturn, large U.S. banks slashed their 11 TOP BANKS IN DISTRESSED ASSETS holdings of distressed commercial real estate assets by about a third last year. The 1,000 banking companies with the largest commercial real estate portfolios 2 Suburban Chicago Rentals Available cleared $12.4 billion of nonperforming loans and foreclosed properties from their Trepp Bank Navigator. 2 Sacramento Office Bundle for Sale books during 2014, according to regulatory data compiled by At yearend they held $25.9 billion of such troubled assets, down 32.5% from $38.3 2 Waterman to Buy 2 NY Offices billion the previous year. The portion of the banks’ total real estate holdings listed as nonperforming or in 3 Walker & Dunlop Maps Broker Plan foreclosure dropped to 1.8% by Dec. 31, from 2.9% a year earlier. That measure of 4 Goldman Lists Downtown Tampa Hotel distress had peaked at 8.6% in 2010. But there’s still some work to be done to reach a normal level of less than 1%, said Trepp managing director Matt Anderson. 6 Sale-Leaseback Play in Oklahoma City “Multi-family has already recovered, but that’s not quite the case for the other areas of commercial real estate lending,” Anderson said. For the entire banking 6 Chicago Industrial Package Available See BANK on Page 10 6 JP Morgan Showing NJ Office Building 8 Value-Added Virginia Offices Listed Industrial REIT Puts Portfolio Back on Block Industrial Income Trust 8 Suburban Boston Offices on the Block After backing off plans for an initial public offering, is once again shopping its massive warehouse portfolio. 8 Apartment Fund Corrals Capital The 57.6 million-square-foot package has a whisper price of roughly $4.5 billion, which would indicate a 5.2% capitalization rate. 8 Coach Warehouse Up for Grabs Because the buyer would have to take all 283 properties, the potential field of 19 West Coast Shopping Centers Pitched bidders is limited to giant investors. Among those in the hunt: Blackstone of New York, Brookfield Asset Management of Toronto and a partnership between two Sin- 23 Capital Sought for High-Yield Fund gapore investors — Global Logistic Properties and sovereign wealth fund GIC. Mon- treal-based Ivanhoe Cambridge also took a look, but has dropped out. 23 Well-Leased Pittsburgh Offices for Sale Eastdil Secured and CBRE are running the marketing campaign for Industrial 23 MARKET SPOTLIGHT Income, a nontraded REIT sponsored by Denver-based private equity firmBlack Creek Group. The offering is the latest twist to a long-running saga. The REIT tapped Bank of THE GRAPEVINE See BLOCK on Page 19 New York Life Real Estate Investors has NY Holiday Inn Seen as Redevelopment Play hired veteran capital-raiser Paul Behar as senior director and head of business An investment group is marketing a 597-room Holiday Inn hotel in Midtown development. He started work April 20 in Manhattan that could be redeveloped to include residential units. Manhattan, reporting to senior manag- The Holiday Inn 57th Street is expected to trade for about $300 million, or ing director Mark Talgo, who heads the slightly more than $500,000/room. That valuation is boosted by a 378-space under- insurer’s real estate unit. Behar joined ground garage that generates substantial revenue. The owner, a group of individual from Hunt Cos. of El Paso, Texas, where investors, has given the listing to Eastdil Secured. he was a senior vice president focused on The 37,650-square-foot parcel could be redeveloped into a combination of hotel capital formation and acquisitions. He rooms and residences. The existing hotel has no brand or management contracts, so previously worked at Tuckerman Group, a buyer could bring in a high-end flag. which Hunt acquired in 2013. The property is at 440 West 57th Street, between Ninth and 10th Avenues. It encompasses a mid-block tower with 18 floors that faces 57th Street and an attached Pacific Industrial, a warehouse specialist 10-story building to the rear that faces 56th Street. The hotel, completed in 1964, in Southern California, hired Kevin Rice has undergone $6.5 million of renovations since 2011. The amenities include a See GRAPEVINE on Back Page See HOLIDAY on Page 19 May 6, 2015 Real Estate 2 ALERT Suburban Chicago Rentals Available four tenants, including University of Phoenix and the state Judicial Council. It’s at 2860 Gateway Oaks Drive in the Natomas An investment team is marketing five apartment complexes submarket, about five miles north of downtown Sacramento. in suburban Chicago with a combined value of about $285 mil- The other two buildings, with a combined 148,000 sf, are at lion. 101 Creekside Ridge Court and 1101 Creekside Ridge Drive in The garden-style properties, which encompass 1,876 units, the Roseville submarket. They are 89% leased. Tenants include are 95% occupied. Investors can bid on any combination of the Adventist Health and PMC Sierra. Class-A and -B complexes, all in Illinois. HFF is representing Sacramento is slowly emerging from the recession. Its office the seller, a partnership between Friedkin Realty and Jackson occupancy rate, which slipped below 80% in 2010, has inched Square Properties, both of San Francisco. up to 83%. Although heavily dependent on state agencies, the Two of the properties are in Bloomingdale. The 360-unit market is portrayed by local pros as an alternative for compa- Camden at Bloomingdale, which was built in 1991, is at 38 nies priced out of the Bay Area and Silicon Valley, roughly 70 Glenwood Drive. The 342-unit Stratford Place, developed in miles southwest.  1990, is at 232 Butterfield Drive. The portfolio also includes the 416-unit Aspen Place, at Waterman to Buy 2 NY Offices 826 Terrace Lake Drive in Aurora (built in 1987); the 384-unit Parkway Commons, at 565 Gunderson Drive in Carol Stream A Waterman Interests partnership has struck a deal to buy (built in 1972); and the 374-unit Meadows at River Run, at 350 two recently renovated office buildings in Midtown Manhattan. Whitewater Drive in Bolingbrook (built in 2001). The New York investment shop and an unidentified Although older than many Class-A properties, the listed institutional backer agreed to pay about $117 million for a complexes have attractive amenities, including pools and fit- 118,000-square-foot building at 142 West 36th Street and a ness centers. The units have faux wood floors and balconies or 92,000-sf building at 234 West 39th Street. The price works out patios. to $557/sf. Chicago’s strong economy has strengthened the region’s Eastdil Secured is brokering the sale for a joint venture apartment market. The 95.7% average occupancy rate is pro- between local firmHerald Square Properties and Boston fund jected to tick up this year, according to Marcus & Millichap, operator Davis Cos. The pair bought the buildings at yearend even though thousands of units came on line in the past two 2013 and renovated them last year. Updates included reconfig- years. uring the lobbies and modernizing building systems. A boom in hiring by technology and other firms has fueled Each property is 96% occupied by a mix of small tenants. demand for high-end rentals in downtown Chicago, causing Roughly 75% of the leases roll over within five years. There is a rents to rise. In turn, some tenants priced out of downtown combined 25,000 sf of street-level retail space. have fled to the suburbs, driving up rents there by an average of The 16-story building at 142 West 36th Street is between 3% annually over the past three years.  Broadway and Seventh Avenue. It was built in 1922. Tenants include I. Buss & Allan Uniform (8,000 sf), New Amsterdam Sacramento Office Bundle for Sale Coffee & Tea (7,500 sf), Giliberto Designs (7,000 sf) and Weinman Bros. (7,000 sf), according to CoStar. Seven Sacramento office properties are hitting the block, The 10-story building at 234 West 39th Street, between Sev- with expectations that bids will come in around $120 million. enth and Eighth Avenues, was built in 1921. Tenants include Deutsche Asset & Wealth Management has hired DTZ to mar- Samuel Dong (17,000 sf), Sequin (8,000 sf) and Central Park ket the 631,000-square-foot package. At the $190/sf estimated West Sportswear (4,000 sf). The property has 30,000 sf of avail- value, the initial annual yield would be around 7.25%. Investors able air rights, which the buyer could use to build additional may bid on the portfolio or any of three clusters in separate stories or could sell to a nearby owner. The lease for the top submarkets. floor expires in 2017, making that a likely time to expand. The buildings are 89% leased. They were developed between Waterman is led by Philip Waterman 3d, a former executive 1999 and 2003 and have been owned by Deutsche, through its at Reckson Associates and Tishman Speyer who founded the RREEF funds, since 2006. shop in 2007. The firm targets office properties in New York Four of the buildings, totaling 366,000 sf, are in the Ran- City.  cho Cordova submarket. They were developed in 2000-2001 at 10730, 10734 and 11120 International Drive and 3241 Kilgore Drive. The International Drive buildings are fully occupied, Unless your company holds a multi-user license, it is a violation of while the 103,000-sf building on Kilgore Road is only 52% U.S. copyright law to photocopy or reproduce any part of this leased. The major tenants are Delta Dental, Verizon and the publication, or forward it electronically, without first obtaining State of California. permission from Real Estate Alert. For details about licenses, The 177,000-sf Gateway Oaks is the newest of the properties, contact JoAnn Tassie at 201-234-3980 or [email protected]. completed in 2003. The four-story building is 99% leased to May 6, 2015 Real Estate 3 ALERT Walker & Dunlop Maps Broker Plan or the seller may fit poorly at the merged operation. Walker & Dunlop can pitch itself as an attractive alternative. As it looks to build a national investment-sales platform for “We’re looking for people who are entrepreneurial in spirit,” multi-family properties, Walker & Dunlop says it will take a slow he said. “If you’re a junior broker on a big platform, with no and measured approach. shot to be the number one guy, here’s your opportunity.” The Bethesda, Md., finance company made its initial move For Walker & Dunlop, a brokerage operation provides it two weeks ago by acquiring a 75% stake in Engler Financial, a with a pipeline of potential lending opportunities, because it multi-family brokerage in Alpharetta, Ga. can offer to finance buyers in transactions it brokers. For six Engler, now called Walker & Dunlop Investment Sales, has years, Walker & Dunlop had a joint venture with ARA that focused on the Southeast, with offices in Atlanta, Raleigh, Fort served the same purpose. But that alliance was halted when Lauderdale, Fla., and Orlando. Over time, Walker & Dunlop wants Newmark acquired ARA.  to expand property brokerage to all of its 22 lending offices nationwide. Chief financial officer Steve Theobald said Walker & Dunlop will initially emphasize a few mar- kets: Washington, Boston, Dallas, Houston and Southern Califor- 1&ODUN nia. The firm will likely try to lure &KLFDJR,/ established teams away from rival 2I¿FHVDOH brokerages, rather than acquire VI other boutique firms. The will- 7HUPVFRQ¿GHQWLDO ingness of such teams to make a move will largely dictate the pace and pattern of the expansion, according to Theobald. “We think of this as an organic +6%&7RZHU /RQGRQ8. play,” he said. “We know we’re not 2I¿FHVDOH instantaneously going to jump to VI the top of the league tables. We ¼ELOOLRQ know recruiting can be long and SLFWXUHG time-consuming.” Recruitment will be overseen by Greg Engler, who founded Engler in 2003 and was named 3DFLÀF&HQWXU\3ODFH Tokyo, Japan executive vice president of Walker 2I¿FHVDOH & Dunlop Investment Sales. VI In the last few years, hunting 7HUPVFRQ¿GHQWLDO for talent has become more dif- ficult — and expensive. Several brokerages seeking to build out or expand national platforms, including Avison Young, Colliers, DTZ and Newmark Grubb are on the prowl for talent, while well- Ranked number one in 2014 established national players like -//ZDVUDQNHGWKHQXPEHURQHJOREDOLQYHVWPHQWRI¿FHEURNHULQ HFF and JLL have also been hiring DFFRUGLQJWR5HDO&DSLWDO$QDO\WLFV  5&$ 7KH¿UPDGYLVHGRQPRUHWKDQ ELOOLRQRIJOREDOUHDOHVWDWHLQYHVWPHQWWUDQVDFWLRQVLQ%DFNHGE\ aggressively. WKHPRVWFXUUHQWJOREDOPDUNHWLQWHOOLJHQFHDQGDQLQWHJUDWHGQHWZRUNDFURVV FRXQWULHV\RXFDQEHFRQ¿GHQWZH¶OOKHOS\RXLGHQWLI\DQGVHL]HWKHULJKW Theobald said that consolida- RSSRUWXQLWLHVWRPD[LPL]HWKHEHVWUHWXUQRQ\RXULQYHVWPHQW tion in the brokerage industry — such as DTZ’s recent acquisition of Cassidy Turley and Newmark’s Apartment Realty 1HZV!,QVLJKWV!2SSRUWXQLWLHV takeover of ZZZMOOFRPLQYHVWRU Advisors — can work to his firm’s 5&$UDQNLQJVDUHEDVHGRQWUDQVDFWLRQVPLOOLRQDQGJUHDWHU advantage, because investment- +1 212 812 6040 OZZZXVMOOFRPFDSLWDOPDUNHWV ‹-RQHV/DQJ/D6DOOH,3,QF$OOULJKWVUHVHUYHG sales teams at either the buyer May 6, 2015 Real Estate 4 ALERT Goldman Lists Downtown Tampa Hotel contract. The pitch suggests various strategies for boosting per- formance. For example, some street-level space could be repo- Goldman Sachs is shopping a refurbished Sheraton hotel in sitioned as shops and restaurants, a rooftop bar could be added, downtown Tampa. and some space could be reconfigured to create additional The 277-room Sheraton Tampa Riverwalk is expected to guest rooms. There is 13,000 square feet of meeting space, a draw bids of about $45 million. HFF has the listing. pool, a restaurant and fitness and business centers. The property underwent a $3.7 million renovation that was Across the Tampa hotel market, revenue per room is pro- completed at the end of 2013. Financials were unavailable, but jected to grow 9% this year and another 8.3% next year, accord- marketing materials say revenue per room jumped 22% last ing to PKF Hospitality Research. year and cashflow is nearing stabilization. The Sheraton is one of two hotels with direct access to the The hotel is being offered unencumbered by a management Tampa Riverwalk, a 1.8-mile pedestrian walkway along the Hillsborough River that con- nects popular tourist spots such as the Tampa Museum of Art and Glazer Children’s Museum. The University of Tampa is just across the river, and the Tampa Conven- tion Center is less than a mile to the south. TRANSACTIONS Revitalization plans for Downtown Tampa call for some SPEAK LOUDER $1 billion of office, residential and retail development over the THAN WORDS next decade.  OVER $30 BILLION SOLD

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DEBT PLACEMENT | INVESTMENT SALES | EQUITY PLACEMENT | ADVISORY SERVICES | LOAN SALES | LOAN SERVICING May 6, 2015 Real Estate 6 ALERT Sale-Leaseback Play in Oklahoma City JP Morgan Showing NJ Office Building SandRidge Energy is seeking to sell and lease back its head- J.P. Morgan Asset Management is shopping a fully leased quarters in Oklahoma City. office building in Northern New Jersey. In addition to the 500,000-square-foot SandRidge Tower, the The 100,000-square-foot property, One Jefferson Road in offering includes an attached 862-space garage and two nearby Parsippany, is expected to attract bids of $35 million from core office buildings totaling 169,000 sf that SandRidge doesn’t occupy. investors. The buyer’s initial annual yield at that price would be The package has an estimated value of at least $150 mil- 8%, based on annual net operating income of nearly $2.9 mil- lion, or $224/sf. Investors can bid on any combination of the lion. JLL has the listing. four components. SandRidge has given the listing to Newmark The three-story building is occupied by Pitney Day under a Grubb. lease that runs until 2025, with no termination options and two The energy firm plans to sign a 15-year lease on SandRidge five-year extension options. The law firm pays a rent of $32.05/sf, Tower, at 123 Robert S. Kerr Avenue. SandRidge bought the with annual increases of $0.50. property in 2007 for $23.4 million from Chesapeake Energy, Asking rents for office space across the 14.3 million-sf Par- according to CoStar. The 30-story building was constructed in sippany submarket average $23.98/sf, trailing the statewide 1973 and renovated in 2013. average of $25.25/sf, according to JLL. For comparable Class-A Also listed are the 85,000-sf Braniff Building, at 324 North properties in Parsippany, asking rents average $26.91/sf, also Robinson Avenue, and the 84,000-sf Parkside Building, at 120 below the statewide average of $27.92/sf. Robert S. Kerr Avenue. The 10-story Braniff Building, which The property was built in 2009 by a joint venture between was constructed in 1945, re-opened in 2103 after a gut renova- Mack-Cali Realty of Edison, N.J., and J.P. Morgan, which later tion. It is 98% occupied by third-party tenants. The seven-story bought Mack-Cali’s interest. It is the newest of four buildings Parkside building, which will open this month, has no space that make up a corporate campus called Center of Morris pre-leased. SandRidge originally planned to occupy the Park- County, just east of the intersection of Interstates 80 and 287, side Building, but shifted gears. and about 30 miles west of Midtown Manhattan. Oklahoma City boasts a strong economy. Its unemployment The building has a two-story atrium, more than 9,000 sf of rate fell to 3.3% in March, tying Austin for the lowest rate for conference space and 391 parking spaces.  metropolitan areas with at least 1 million residents, according to Newmark.  NEW DEALS Chicago Industrial Package Available Suburban LA Shopping Center An investment firm is marketing 15 Chicago-area industrial buildings to core-plus buyers. JH Real Estate paid $33 million last month for a The portfolio, encompassing 904,000 square feet, has an 125,000-square-foot shopping center in the Los Angeles sub- estimated value of $60 million. Cushman & Wakefield is repre- urb of Hawaiian Gardens. The price translates into a roughly senting the owner, Venture One of Rosemont, Ill. 6% initial annual yield for the Newport Beach, Calif., firm. HFF The buildings are being offered as a package, with bids on marketed the grocery-anchored property for HP Investors of individual properties discouraged. San Diego. The property, Hawaiian Gardens Town Center, is At the anticipated price of $66/sf, the initial annual yield 95% leased. Wal-Mart Neighborhood Market is the anchor. The would be 5.5%. The pitch is that a buyer could achieve a sta- complex of five single-story buildings is on 11 acres at 12090- bilized capitalization rate of 6.5% within two years by raising 12144 Carson Street, just off Interstate 605 and about 20 miles below-market rents upon rollover. The buildings are 93% occu- southeast of downtown Los Angeles. pied, with no tenant leasing more than 15% of the overall space. On average, leases on roughly 13% of the space will roll over Apartment Properties in NC, Indiana in each of the next five years. Current rents average $4.17/sf, compared to asking rents of $4.85/sf. Hamilton Point Investments last week acquired two apartment Rents for industrial properties in the Chicago area have complexes, in Leland, N.C., and Indianapolis, for a combined increased for 14 consecutive quarters — with small spaces rep- $41.2 million in separate transactions. The Old Lyme, Conn., resenting the fastest-growing segment. The buildings in Ven- fund operator paid $25 million for the 288-unit Hunterstone ture One’s portfolio fit that description, at an average 60,000 sf. Apartments in Leland, a suburb of Wilmington, N.C. The seller, The buildings have minimum ceiling heights of 18-30 feet, Tribute Cos. of Wilmington, didn’t use a broker. CBRE handled for an average of 21 feet. One property is in Kenosha, Wis. The the $16.2 million sale of the 216-unit Riverchase Apartments in others are in Illinois, with two in Elk Grove Village and one Indianapolis for Continental Realty of Littleton, Colo. Hamilton each in Alsip, Bedford Park, Buffalo Grove, Carol Stream, Chi- Point plans to update interiors at both properties and raise rents cago, Elmhurst, Gurnee, Naperville, Romeoville, Schaumburg, to boost the yield. They will be held in the $81 million HPI Real St. Charles and Waukegan.  Estate Opportunity Fund 3, which is now fully invested.  8|7
8,1& to ask the unexpected to seek higher ground to find a better way. May 6, 2015 Real Estate 8 ALERT Value-Added Virginia Offices Listed corridor that has an average office-leasing rate of 91%. It has benefited from demand spilling over from the popular Burling- Lowe Enterprises is pitching two Virginia office buildings ton market, where rents are $35/sf. that are 63% occupied. The office park is on Ballardvale Street, about 18 miles north The properties, less than a mile apart in Tysons Corner, total of downtown Boston. It’s adjacent to a 130,000-sf Target store 425,000 square feet. They have a combined value in the vicinity that opened last year.  of $90 million, or $212/sf. Investors can bid on either or both. Cushman & Wakefield is advising Lowe, a Los Angeles invest- Apartment Fund Corrals Capital ment manager. The offering is geared to value-added players that would An investment manager held a one-and-done final close last seek to lift the occupancy rate and raise rents as leases roll over. week for its fifth multi-family fund. The rents are less than $30/sf, which is below the submarket’s FPA Multifamily of San Francisco lined up $430 million of weighted average asking rate of $33.22/sf. The average occu- equity, exceeding the $350 million goal. pancy rate in Tysons Corner is 81%. The vehicle, FPA Apartment Opportunity Fund 5, shoots for The offering encompasses a 256,000-sf building at 1953 Gal- a mid-teens return by acquiring underperforming properties, lows Road and a 169,000-sf building at 1951 Kidwell Drive. especially workforce housing, in the Western U.S. and the Sun The larger property is 64% leased, mostly to investment-grade Belt. It seeks properties that need renovation or repositioning, companies. It was completed in 1986 and renovated in 2005. or have distressed owners. The fund can also buy debt on dis- The Kidwell Drive building, which was completed in 1981, is tressed properties with an eye toward taking them over. When 61% occupied. leveraged, it will have some $1.4 billion of buying power. Tenants include Leidos, ManTech International and the U.S. The sponsor began soliciting capital last year from endow- government. ments, foundations, funds of funds and others. Lowe acquired the buildings some 10 years ago for $98.7 FPA Multifamily, formerly known as Fowler Property Acqui- million from New Boston Fund. sitions, has raised a combined $1.3 billion of equity for its five Tysons Corner, in Fairfax County, straddles McLean and funds and sidecar vehicles. Fund 4 had its final close in 2013 Vienna along the Capital Beltway. The local government is and hasn’t finished investing its $360 million of equity. encouraging substantial mixed-use development and redevel- The company, founded by Greg Fowler in 1985, controls a opment in conjunction with the recent opening of four Metro- 22,500-unit portfolio of apartment complexes and has prop- rail stations. The stations are part of the new Silver Line, which erty-management and construction affiliates.Daniel Kaplan is will connect downtown Washington with Washington Dulles the shop’s chief investment officer. International Airport when completed in 2018.  Coach Warehouse Up for Grabs Suburban Boston Offices on the Block Investors are getting a crack at a distribution center in Jack- After signing a new anchor tenant, an AEW Capital partner- sonville that is fully occupied by luxury retailer Coach. ship is marketing a suburban Boston office park to core-plus The 852,000-square-foot property is expected to attract bids investors. of slightly more than $90 million, or $108/sf. At that price, the The 550,000-square-foot Ballardvale Office Park, in Wilm- buyer’s initial annual yield would be 6%. Cushman & Wakefield ington, Mass., is expected to fetch about $85 million, or almost is advising the seller, Pantheon Properties of New York. $155/sf. At that valuation, the initial annual yield would be 7%. Coach unit Coach Services occupies the space under an Potential buyers could boost revenue by increasing the 89% absolute net lease that runs for another 13 years, with sched- occupancy rate and raising rents as leases expire. uled rent increases every five years. The lease is guaranteed by The owner, a partnership of Boston firms AEW andGriffith the parent company, which carries ratings of Baa2/BBB-/BBB Properties, has given the listing to JLL. from Moody’s, S&P and Fitch. The four mid-rise buildings were developed in the 1980s. Coach uses the facility as its hub for fulfilling and distrib- AEW and Griffith have completed some $10 million of renova- uting orders for its handbags and other goods across North tions since 2005, including replacing the facades and mechani- America. It has occupied the building since it was built in 1994. cal systems, updating lobbies and common areas, and adding The center was expanded in 2008. Its warehouse compo- amenities. nent, encompassing more than 800,000 sf, has air condition- The anchor tenant,Osram Sylvania, recently signed a ing, 26-foot ceilings and concrete truck courts. There are also 10-year lease for 125,000 sf. Other tenants include AGFA, Kapa some 50,000 sf of offices in a two-story space. Biosystems, Trane and Verizon. The average remaining lease The property is on 47 acres at One Coach Way within the term is five years, and in-place rents are about $19/sf, below 425-acre International Tradeport business park, which is adja- the $21/sf market asking rate. cent to Jacksonville International Airport. The building is about The property is at the intersection of Interstate 93 and Route one mile from Interstate 95 and less than three miles from the 125, just north of Burlington. It’s in an area known as the I-93 highway’s intersection with Interstate 295.  B:9” T:8.5” S:7.75”

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15_PREI_Partnership_REA_8.5x11.indd 1 2/9/15 9:20 AM May 6, 2015 Real Estate 10 ALERT

RANKINGS

Distressed Commercial Real Estate Assets Bank ... From Page 1 Held by the Top 1,000 Banking Companies industry, he said, nonperforming and foreclosed assets finished As of Dec. 31, 2014 the year at $33.5 billion, down about $14 billion from 2013. Real estate assets $1.4 trillion “This year, we will probably see a net reduction of $10 billion to $15 billion, which would bring the figure to around $20 billion. C&L loans 15% It will likely take a little longer to get back to a ‘normal’ level of Commercial about $15 billion.” mortgages 50% With the balance dwindling, the pace of the cleanup slowed Foreclosed properties from the previous year, when the top 1,000 banks resolved $21.6 31% billion of distressed assets, a 36% reduction. That’s unsurpris- ing, Anderson said, partly because some of the remaining sour loans “are the hard cases and hence hard to sell, or perhaps will Distressed Multi-family loans real estate incur a greater loss.” At the same time, banks can afford to be 4% $25.9 billion patient with loans that appear on a path to greater recoveries. Amount “With generally rising values, losses can be reduced by waiting ($Bil.) to sell at a higher price,” Anderson said. Nonperforming commercial mortgages $13.0 “Low interest rates have meant that the carrying costs for Nonperforming multi-family mortgages 1.1 nonperforming loans have been minimal, so any price appre- Nonperforming construction and land loans 3.9 ciation can offset those costs,” he added. “If interest rates rise, Total foreclosed properties 7.8 that could spur banks to shed the problem assets sooner, as Total distressed real estate 25.9 those carrying costs would rise.” Total real estate assets 1,416.0 The aggregate balance of nonperforming loans in the hands Source: Trepp Bank Navigator of the top 1,000 banks was $18 billion at the close of 2014, down $9.6 billion (34.8%) from 2013’s level of $27.6 billion. Their holdings of foreclosed properties totaled $7.8 billion, S I K J F P I W D M K C G P down $2.8 billion (26.4%). Only one bank was still holding more than $1 billion of non- C A H G O R Q F W H R J B S performing loans: Wells Fargo, with $1.7 billion. Wells — by R Q G D V A C W V T G S T P far the banking industry’s largest holder of commercial real estate assets — also removed the most delinquent debt from its H W J O V W F S F I B O X J books, $1.2 billion. That represented a 41.1% reduction, com- pared with the 34.8% average for the top 1,000 banks. Other W I H O F X J C I Q K W G W big reductions came at PNC ($616 million) and GE Capital ($555 Q O P P O R T U N I T Y R A million). But Bank of America’s stack of defaulted notes grew by $56 million to $875 million, the second-largest total of non- K S J K R J W D D T J G F J performing loans. E P H T S Q F W E I R M O W Wells also disposed of the most foreclosed properties, $340 million, reducing its total at yearend to $910 million — still O M V G C P S O R O A J W I nearly five times the next-largest “real estate owned” portfo- lio, PNC’s $183.7 million. Wells’ reduction of 27.2% was in line H P E X F W G M K W S K M Q with the top-1,000 average of 26.4%. W B T I G J S W C Q W D P S Construction and land loans continued to be the most Real Estate Alert, the weekly troubled category, but showed substantial improvement. Two E AnewsletterE H EthatO deliversW G theJ latestS wordI W K percent of those loans were nonperforming, down from 4% a O Mon majorI X transactions,T S F K marketW P gossipW R M P year earlier. Just 0.4% of multi-family loans were nonperform- and dealmakers’ secret strategies. ing at yearend, compared with 0.9% at the end of 2013. Among F V B M B E Q M T H S W J G commercial mortgages, nonperformers were 1.4% of the total, Start your free trial at REAlert.com, or call 201-659-1700. down from 2%. M S R N I O V P J W D O S M When foreclosed properties are also included, they push A W I K W P X A R H W K B S up the distressed ratio for construction assets to 4.1%, while bringing the figure for the multi-family sector to 0.5% and for P O W S D W H W I W X S O H See BANK on Page 13

Commercial Alert Advertising - BW-quarter.indd 1 9/9/11 11:06 AM May 6, 2015 Real Estate 11 ALERT

RANKINGS Top 100 Banks in Nonperforming Real Estate Loans at Yearend 2014 Nonperforming Commercial Real Estate Loans Total Construction Nonperf./ CRE Loans Commercial Multi-family And Land Total ’13-’14 CRE Loans ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. (%) 1 Wells Fargo, San Francisco $122,599.0 $1,450.0 $46.0 $217.0 $1,713.0 -41.1 1.4 2 Bank of America, Charlotte 60,848.0 522.0 17.0 336.0 875.0 6.8 1.4 3 PNC, Pittsburgh 33,517.4 391.7 64.0 160.3 616.0 -50.0 1.8 4 TD Bank, Cherry Hill, N.J. 22,313.5 437.9 21.4 59.3 518.7 -22.0 2.3 5 General Electric Capital, Norwalk, Conn. 21,393.2 507.0 8.7 0.0 515.6 -51.8 2.4 6 Banco Popular, San Juan, P.R. 6,401.0 414.0 3.0 74.0 491.0 -38.9 7.7 7 J.P. Morgan, New York 82,446.0 269.0 130.0 56.0 455.0 -27.4 0.6 8 Beal Financial, Plano, Texas 1,402.6 417.3 9.2 6.2 432.7 278.1 30.9 9 M&T Bank, Buffalo 27,338.1 200.7 7.4 170.7 378.8 -33.1 1.4 10 BB&T, Winston-Salem, N.C. 29,767.1 258.0 15.8 101.3 375.2 -38.7 1.3 11 Regions Financial, Birmingham, Ala. 15,290.5 315.8 7.0 48.9 371.8 -35.7 2.4 12 First Bancorp, San Juan, P.R. 2,822.5 256.9 1.7 37.1 295.7 8.0 10.5 13 U.S. Bancorp, Minneapolis 39,110.0 159.0 15.0 97.0 271.0 -37.1 0.7 14 Doral Financial, San Juan, P.R. 1,667.5 166.7 0.4 83.0 250.1 -17.1 15.0 15 BMO Financial, Wilmington, Del. 8,260.0 204.5 7.5 35.5 247.5 -47.4 3.0 16 Santander Holdings USA, Boston 17,329.7 157.8 9.6 6.3 173.7 -35.0 1.0 17 Utrecht-America Holdings, New York 3,483.4 151.5 1.2 10.4 163.2 -29.1 4.7 18 Oriental Financial, San Juan, P.R. 1,032.0 124.8 0.3 34.2 159.3 -8.3 15.4 19 People’s United Financial, Bridgeport, Conn. 11,821.4 100.3 10.6 43.7 154.7 -20.9 1.3 20 Zions Bancorporation, Salt Lake City 17,467.4 123.9 3.3 26.4 153.6 -39.1 0.9 21 Fifth Third Bancorp, Cincinnati 9,737.8 96.4 6.6 39.8 142.8 -34.7 1.5 22 Capital One, McLean, Va. 23,307.1 94.2 14.6 23.3 132.1 -8.4 0.6 23 Goldman Sachs, New York 5,673.0 119.0 9.0 1.0 129.0 -72.9 2.3 24 Metropolitan Bank, Chicago 817.2 77.1 36.5 6.4 120.1 -35.6 14.7 25 FirstMerit, Akron, Ohio 3,838.2 88.2 17.2 13.8 119.1 -36.7 3.1 26 East West Bancorp, Pasadena, Calif. 8,355.4 78.0 26.2 14.1 118.4 -34.7 1.4 27 First Citizens Bancshares, Raleigh 9,067.3 77.7 2.5 31.4 111.6 -49.9 1.2 28 Talmer Bancorp, Troy, Mich. 1,669.0 97.7 5.7 7.4 110.8 0.3 6.6 29 Synovus Financial, Columbus, Ga. 11,154.3 36.3 0.5 70.9 107.7 -54.5 1.0 30 BancWest, Honolulu 14,122.4 88.9 2.1 16.0 107.0 -37.1 0.8 31 MB Financial, Chicago 2,630.9 60.2 13.6 26.3 100.1 -36.9 3.8 32 Citigroup, New York 10,681.0 48.0 21.0 31.0 100.0 -9.1 0.9 33 BBVA Compass Bancshares, Houston 12,031.8 85.6 4.8 8.4 98.8 -36.0 0.8 34 SunTrust Banks, Atlanta 16,852.0 57.4 4.9 30.4 92.6 -50.6 0.5 35 Comerica, Dallas 10,328.2 74.5 0.1 12.2 86.8 -47.5 0.8 36 Citizens Financial, Providence, R.I. 10,353.7 64.6 12.2 6.0 82.7 -50.6 0.8 37 Huntington Bancshares, Columbus, Ohio 8,230.5 68.8 2.9 10.6 82.3 -31.7 1.0 38 Trustmark, Jackson, Miss. 2,638.5 39.0 0.0 36.5 75.5 -12.1 2.9 39 MUFG, New York 15,828.1 45.4 9.0 17.0 71.3 -51.7 0.5 40 First Niagara Financial, Buffalo 7,919.4 60.5 4.2 5.9 70.7 -16.0 0.9 41 Beach Community Bsh., Ft. Walton Beach, Fla. 272.1 31.2 0.0 39.5 70.7 -22.3 26.0 42 Brand Group Holdings, Lawrenceville, Ga. 662.1 8.5 2.5 58.0 69.0 -20.2 10.4 43 Capital Bank Financial, Coral Gables, Fla. 2,203.8 36.0 1.9 29.8 67.6 -58.4 3.1 44 BBCN Bancorp, Los Angeles 4,447.7 65.2 0.4 1.6 67.2 -17.8 1.5 45 KeyCorp, Cleveland 9,646.5 46.0 3.4 13.6 63.0 -9.0 0.7 See TOP 100 on Page 12 May 6, 2015 Real Estate 12 ALERT

RANKINGS Top 100 Banks in Nonperforming Real Estate Loans at Yearend 2014 Continued From Page 11 Nonperforming Commercial Real Estate Loans Total Construction Nonperf./ CRE Loans Commercial Multi-family And Land Total ’13-’14 CRE Loans ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. (%) 46 Fulton Financial, Lancaster, Pa. $5,652.8 $39.5 $1.6 $21.0 $62.1 -14.7 1.1 47 Western Alliance Bancorporation, Phoenix 4,498.1 55.8 0.0 6.1 61.9 2.7 1.4 48 New York Community Bancorp, Westbury, N.Y. 31,763.5 26.3 31.1 1.4 58.7 -33.4 0.2 48 IberiaBank, Lafayette, La. 4,164.7 44.2 5.2 9.3 58.7 -49.7 1.4 50 HSBC North America, New York 10,305.2 58.4 0.1 0.0 58.5 -64.7 0.6 51 Valley National Bancorp, Wayne, N.J. 6,705.3 42.9 1.1 13.5 57.5 -46.9 0.9 52 Arvest Bank, Bentonville, Ark. 2,909.8 39.6 0.1 17.3 56.9 -56.0 2.0 53 Cathay General Bancorp, Los Angeles 4,551.5 27.2 3.3 25.8 56.4 20.1 1.2 54 Hilltop Holdings, Dallas 2,041.0 42.4 3.9 8.7 55.0 1.6 2.7 55 Associated Banc-Corp, Green Bay, Wis. 5,064.1 46.0 2.5 5.4 53.9 -26.9 1.1 56 Northern Trust, Chicago 3,957.5 34.9 6.3 10.3 51.6 -30.4 1.3 57 Old National Bancorp, Evansville, Ind. 1,568.2 38.8 2.3 10.4 51.5 2.4 3.3 58 Hancock Holding, Gulfport, Miss. 4,230.4 32.7 4.4 11.4 48.5 -51.5 1.1 59 Susquehanna Bancshares, Lititz, Pa. 4,827.5 40.5 0.3 7.0 47.8 -9.2 1.0 60 Hanmi Financial, Los Angeles 2,393.9 42.5 4.9 0.2 47.6 208.3 2.0 61 Ocean Bankshares, Miami 1,742.9 22.4 5.1 19.5 47.0 -18.1 2.7 62 Pacwest Bancorp, Los Angeles 5,560.2 33.7 4.7 8.4 46.8 -35.1 0.8 63 United Bankshares, Charleston, W. Va. 4,886.1 28.2 0.3 17.1 45.6 31.1 0.9 64 Parkway Bancorp, Harwood Heights, Ill. 1,490.6 11.6 14.4 18.5 44.5 -10.8 3.0 65 Hamilton State Bancshares, Hoschton, Ga. 618.1 20.4 0.0 23.9 44.3 -36.8 7.2 66 Wintrust Financial, Rosemont, Ill. 4,510.5 33.3 1.2 9.5 44.1 -51.7 1.0 67 SCBT Financial, Columbia, S.C. 2,129.6 28.8 1.1 14.1 44.0 -40.4 2.1 68 Ameris Bancorp, Moultrie, Ga. 1,453.9 24.1 4.4 14.0 42.6 -27.8 2.9 69 First Financial Bancorp, Cincinnati 2,065.7 34.8 5.3 2.2 42.3 -34.8 2.0 70 Simmons First National, Pine Bluff, Ark. 1,220.2 20.7 3.3 18.1 42.1 -7.7 3.4 71 Glacier Bancorp, Kalispell, Mont. 2,239.2 14.3 0.0 27.1 41.4 -14.0 1.8 72 Everbank Financial, Jacksonville 3,453.7 35.2 2.5 3.4 41.1 108.0 1.2 73 Umpqua Holdings, Portland, Ore. 8,905.6 37.0 1.1 1.2 39.3 32.0 0.4 74 Southern Bancshares, Mount Olive, N.C. 502.3 25.8 7.3 5.7 38.9 -44.7 7.7 75 Renasant, Tupelo, Miss. 2,166.2 23.2 1.2 13.8 38.1 -35.2 1.8 76 Olney Bancshares of Texas, Olney, Texas 1,010.5 17.1 0.0 20.6 37.7 503.4 3.7 77 City National, Los Angeles 4,699.7 8.6 20.4 8.2 37.2 -50.8 0.8 78 Chemical Financial, Midland, Mich. 1,760.6 27.7 0.0 9.0 36.7 3.8 2.1 79 Wilshire Bancorp, Los Angeles 2,512.0 36.1 0.0 0.0 36.1 -20.5 1.4 80 Seaway Bancshares, Chicago 133.5 29.5 3.7 1.9 35.1 30.2 26.3 81 Liberty Shares, Hinesville, Ga. 170.7 10.7 6.4 17.4 34.6 1.4 20.2 82 New York Private Bank & Trust, New York 1,069.4 19.3 15.2 0.0 34.5 -48.0 3.2 83 F.N.B. Corp., Pittsburgh 3,451.1 26.5 1.6 6.1 34.2 -34.0 1.0 84 CBS Banc-Corp., Russellville, Ala. 255.6 13.3 0.0 19.1 32.4 12.2 12.7 85 National Bank Holdings, Greenwood Vill., Colo. 568.3 8.0 0.0 24.1 32.1 -39.8 5.6 86 Home Bancshares, Conway, Ark. 3,080.8 23.8 2.0 6.0 31.9 -25.9 1.0 87 Bond Street Holdings, Weston, Fla. 1,866.2 23.1 2.2 6.6 31.8 -18.3 1.7 88 First Midwest Bancorp, Itasca, Ill. 3,173.2 21.4 1.0 9.1 31.5 -48.1 1.0 88 First Interstate Bancsystem, Billings, Mont. 1,886.4 20.1 0.3 11.1 31.5 -40.7 1.7 90 Communityone Bancorp, Charlotte 496.8 24.0 1.0 6.0 31.0 -24.5 6.2 See TOP 100 on Page 13 May 6, 2015 Real Estate 13 ALERT

RANKINGS Top 100 Banks in Nonperforming Real Estate Loans at Yearend 2014 Continued From Page 12 Nonperforming Commercial Real Estate Loans Total Construction Nonperf./ CRE Loans Commercial Multi-family And Land Total ’13-’14 CRE Loans ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. (%) 91 Porter Bancorp, Louisville, Ky. $257.6 $26.9 $0.1 $3.8 $30.8 -52.2 12.0 92 Standard Bancshares, Hickory Hills, Ill. 1,068.5 8.0 2.5 20.3 30.8 -16.1 2.9 93 Anchor Bancorp Wisconsin, Madison, Wis. 683.6 9.9 1.6 19.2 30.7 -37.7 4.5 94 Centerstate Banks, Davenport, Fla. 1,347.1 19.6 0.8 9.6 30.0 -19.3 2.2 94 Washington Federal, Seattle 2,173.1 22.9 2.4 4.7 30.0 -26.5 1.4 96 Northwest Bancshares, Warren, Pa. 1,515.5 28.0 0.4 1.4 29.8 -7.8 2.0 97 Peoples Financial, Biloxi, Miss. 239.1 18.0 0.0 11.6 29.5 22.5 12.4 97 Heritage Financial, Olympia, Wash. 1,388.5 23.7 0.0 5.8 29.5 235.7 2.1 97 Bank of the Ozarks, Little Rock, Ark. 3,773.6 11.7 1.8 16.0 29.5 -60.9 0.8 100 Columbia Banking System, Tacoma, Wash. 2,637.5 24.3 0.6 4.4 29.4 -32.3 1.1 TOTAL FOR TOP 100 BANKS 907,575.5 9,780.9 763.9 2,740.6 13,285.4 -32.7 1.5 TOTAL FOR TOP 1,000 BANKS 1,416,036.4 12,995.2 1,096.2 3,941.1 18,032.4 -34.8 1.3 Source: Trepp Bank Navigator

Bank ... From Page 10 Largest Declines in Distressed Real Estate other commercial real estate to 1.7%. Nonperforming Commercial Real Estate Loans Wells continued to have the larg- 2014 2013 Decline est dollar volume of nonperforming ($Mil.) ($Mil.) ($Mil.) commercial mortgages, while J . P. 1 Wells Fargo, San Francisco $1,713.0 $2,909.0 -1,196.0 Morgan had the most delinquent 2 PNC, Pittsburgh 616.0 1,231.7 -615.6 multi-family loans — unsurprising 3 General Electric Capital, Norwalk, Conn. 515.6 1,070.3 -554.6 since they are the biggest holders of 4 Goldman Sachs, New York 129.0 476.0 -347.0 mortgages in each sector. But BofA 5 Banco Popular, San Juan, P.R. 491.0 803.0 -312.0 jumped to the top of the list of banks 6 BB&T, Winston-Salem, N.C. 375.2 612.3 -237.1 holding nonperforming construction 7 BMO Financial, Wilmington, Del. 247.5 470.2 -222.6 debt with $336 million, double its 8 Regions Financial, Birmingham, Ala. 371.8 578.2 -206.5 2013 tally. Wells, the leading holder 9 M&T Bank, Buffalo 378.8 566.5 -187.7 of construction and land loans, 10 J.P. Morgan, New York 455.0 627.0 -172.0 reduced its nonperforming total by TOTAL FOR TOP 1,000 BANKS 18,032.4 27,661.7 -9,629.3 66%. Most of the reduction in bad debt Foreclosed Properties resulted from sales or workouts, as 2014 2013 Decline writeoffs continued to diminish. The ($Mil.) ($Mil.) ($Mil.) banking industry wrote off $3.3 bil- 1 Wells Fargo, San Francisco $910.0 $1,250.0 -340.0 lion of commercial real estate debt in 2 TD Bank, Cherry Hill, N.J. 108.2 200.4 -92.2 2014, about half the previous year’s 3 BB&T, Winston-Salem, N.C. 100.8 180.4 -79.5 volume — and meanwhile recovered 4 Fifth Third Bancorp, Cincinnati 81.0 148.1 -67.1 some $2 billion of value that had pre- 5 U.S. Bancorp, Minneapolis 55.4 117.1 -61.7 viously been charged off, for a net 6 Santander Holdings USA, Boston 29.9 90.1 -60.2 writedown of $1.3 billion. 7 Capital Bank Financial, Coral Gables, Fla. 62.4 107.9 -45.5 “I think we are close to getting to the 8 Banco Popular, San Juan, P.R. 126.6 171.4 -44.8 point where losses from the crash have 9 IberiaBank, Lafayette, La. 35.5 77.0 -41.6 been fully realized,” said Anderson. 10 Wintrust Financial, Rosemont, Ill. 62.9 103.0 -40.1 Before the crash, he said, net charge- TOTAL FOR TOP 1,000 BANKS 7,830.0 10,641.8 -2,811.7 offs were typically between $500 mil- Source: Trepp Bank Navigator lion and $1 billion per year.  May 6, 2015 Real Estate 14 ALERT

RANKINGS Top Banks in Nonperforming Commercial Real Estate Loans Commercial Mortgages Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 Wells Fargo, San Francisco $92,141.0 $94,136.0 -2.1 $1,450.0 $2,122.0 -31.7 1.6 2 Bank of America, Charlotte 46,140.0 48,555.0 -5.0 522.0 628.0 -16.9 1.1 3 General Electric Capital, Norwalk, Conn. 17,628.5 16,775.6 5.1 507.0 1,000.6 -49.3 2.9 4 TD Bank, Cherry Hill, N.J. 18,315.3 18,146.2 0.9 437.9 527.6 -17.0 2.4 5 Beal Financial, Plano, Texas 964.9 1,559.0 -38.1 417.3 88.4 371.9 43.3 6 Banco Popular, San Juan, P.R. 5,550.0 6,676.0 -16.9 414.0 558.0 -25.8 7.5 7 PNC, Pittsburgh 21,916.7 22,047.7 -0.6 391.7 711.2 -44.9 1.8 8 Regions Financial, Birmingham, Ala. 11,090.9 12,721.1 -12.8 315.8 450.4 -29.9 2.8 9 J.P. Morgan, New York 27,208.0 27,103.0 0.4 269.0 372.0 -27.7 1.0 10 BB&T, Winston-Salem, N.C. 22,463.4 22,922.2 -2.0 258.0 442.9 -41.7 1.1 11 First Bancorp, San Juan, P.R. 2,682.8 2,998.9 -10.5 256.9 207.6 23.7 9.6 12 BMO Financial, Wilmington, Del. 6,097.2 6,144.3 -0.8 204.5 354.0 -42.2 3.4 13 M&T Bank, Buffalo 18,564.7 18,623.1 -0.3 200.7 276.2 -27.3 1.1 14 Doral Financial, San Juan, P.R. 807.1 989.0 -18.4 166.7 207.2 -19.6 20.7 15 U.S. Bancorp, Minneapolis 25,591.0 26,263.0 -2.6 159.0 210.0 -24.3 0.6 16 Santander Holdings USA, Boston 7,483.1 8,215.6 -8.9 157.8 203.1 -22.3 2.1 17 Utrecht-America Holdings, New York 3,080.7 3,002.6 2.6 151.5 191.0 -20.7 4.9 18 Oriental Financial, San Juan, P.R. 983.5 636.5 54.5 124.8 138.8 -10.1 12.7 19 Zions Bancorporation, Salt Lake City 13,298.6 13,835.5 -3.9 123.9 202.6 -38.8 0.9 20 Goldman Sachs, New York 4,201.0 2,382.0 76.4 119.0 421.0 -71.7 2.8 TOTAL FOR TOP 1,000 BANKS 962,266.5 940,130.7 2.4 12,995.2 18,867.9 -31.1 1.4 Multi-Family Mortgages Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 J.P. Morgan, New York $50,232.0 $45,093.0 11.4 $130.0 $210.0 -38.1 0.3 2 PNC, Pittsburgh 3,251.0 2,652.0 22.6 64.0 68.3 -6.3 2.0 3 Wells Fargo, San Francisco 12,092.0 10,620.0 13.9 46.0 153.0 -69.9 0.4 4 Metropolitan Bank, Chicago 226.5 207.1 9.4 36.5 57.4 -36.4 16.1 5 New York Community Bancorp, Westbury, N.Y. 23,851.4 20,717.3 15.1 31.1 58.4 -46.8 0.1 6 East West Bancorp, Pasadena, Calif. 1,469.6 1,367.0 7.5 26.2 34.0 -22.7 1.8 7 TD Bank, Cherry Hill, N.J. 2,032.2 1,890.4 7.5 21.4 32.7 -34.5 1.1 8 Citigroup, New York 2,483.0 2,193.0 13.2 21.0 20.0 5.0 0.8 9 City National, Los Angeles 605.3 638.5 -5.2 20.4 35.7 -42.7 3.4 10 First Banks, Clayton, Mo. 115.4 121.3 -4.8 19.7 1.8 1,000.4 17.1 TOTAL FOR TOP 1,000 BANKS 256,384.8 228,367.9 12.3 1,096.2 1,964.9 -44.2 0.4

Construction and Land Loans Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 Bank of America, Charlotte $9,197.0 $10,536.0 -12.7 $336.0 $168.0 100.0 3.7 2 Wells Fargo, San Francisco 18,366.0 16,924.0 8.5 217.0 634.0 -65.8 1.2 3 M&T Bank, Buffalo 5,081.9 4,436.9 14.5 170.7 250.2 -31.8 3.4 4 PNC, Pittsburgh 8,349.7 7,791.0 7.2 160.3 452.2 -64.6 1.9 5 BB&T, Winston-Salem, N.C. 4,735.7 4,629.1 2.3 101.3 150.1 -32.5 2.1 6 U.S. Bancorp, Minneapolis 9,311.0 7,797.0 19.4 97.0 186.0 -47.8 1.0 7 Doral Financial, San Juan, P.R. 735.2 651.8 12.8 83.0 93.5 -11.2 11.3 8 Banco Popular, San Juan, P.R. 333.0 449.0 -25.8 74.0 219.0 -66.2 22.2 9 Synovus Financial, Columbus, Ga. 2,151.1 2,277.4 -5.5 70.9 167.3 -57.6 3.3 10 TD Bank, Cherry Hill, N.J. 1,966.0 2,022.2 -2.8 59.3 104.3 -43.1 3.0 TOTAL FOR TOP 1,000 BANKS 197,385.0 171,753.5 14.9 3,941.1 6,828.8 -42.3 2.0 Source: Trepp Bank Navigator May 6, 2015 Real Estate 15 ALERT

RANKINGS Top Banks in Ratio of Nonperforming Commercial Real Estate Loans Commercial Mortgages Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 Beal Financial, Plano, Texas $964.9 $1,559.0 -38.1 $417.3 $88.4 371.9 43.3 2 Seaway Bancshares, Chicago 111.5 117.3 -4.9 29.5 20.8 41.9 26.5 3 Beach Community Bsh., Ft. Walton Beach, Fla. 129.0 133.6 -3.4 31.2 33.7 -7.5 24.2 4 Doral Financial, San Juan, P.R. 807.1 989.0 -18.4 166.7 207.2 -19.6 20.7 5 Porter Bancorp, Louisville, Ky. 181.4 232.0 -21.8 26.9 48.4 -44.5 14.8 6 Metropolitan Bank, Chicago 542.7 580.4 -6.5 77.1 117.8 -34.6 14.2 7 Oriental Financial, San Juan, P.R. 983.5 636.5 54.5 124.8 138.8 -10.1 12.7 8 Commerce Bank and Trust, Topeka, Kan. 217.6 211.4 2.9 26.1 44.2 -41.0 12.0 9 Boiling Springs, Rutherford, N.J. 172.3 172.4 -0.1 17.6 1.4 1,157.6 10.2 10 Northern States Financial, Waukegan, Ill. 119.7 119.9 -0.2 12.1 5.5 118.9 10.1 11 Liberty Shares, Hinesville, Ga. 109.5 128.4 -14.7 10.7 14.4 -25.6 9.8 12 First Bancorp, San Juan, P.R. 2,682.8 2,998.9 -10.5 256.9 207.6 23.7 9.6 13 First Financial Service, Elizabethtown, Ky. 169.9 201.8 -15.8 16.0 9.7 65.1 9.4 14 Peoples Financial, Biloxi, Miss. 193.5 185.5 4.3 18.0 7.8 130.4 9.3 15 Queensborough Co., Louisville, Ga. 171.1 172.8 -1.0 13.0 15.1 -13.9 7.6 16 Banco Popular, San Juan, P.R. 5,550.0 6,676.0 -16.9 414.0 558.0 -25.8 7.5 17 Talmer Bancorp, Troy, Mich. 1,338.7 899.5 48.8 97.7 95.4 2.5 7.3 18 CBS Banc-Corp., Russellville, Ala. 184.2 186.2 -1.1 13.3 11.4 16.7 7.2 18 Citizens Holding Co., Philadelphia, Miss. 140.5 132.1 6.4 10.2 10.6 -4.5 7.2 20 Highlands Bankshares, Abingdon, Va. 102.9 108.6 -5.2 6.8 5.4 25.2 6.6 TOTAL FOR TOP 1,000 BANKS 962,266.5 940,130.7 2.4 12,995.2 18,867.9 -31.1 1.4 Multi-Family Mortgages Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 First Banks, Clayton, Mo. $115.4 $121.3 -4.8 $19.7 $1.8 1,000.4 17.1 2 Metropolitan Bank, Chicago 226.5 207.1 9.4 36.5 57.4 -36.4 16.1 3 Amalgamated Investments, Chicago 52.6 59.1 -11.0 6.7 13.3 -49.9 12.7 4 Centrue Financial, Ottawa, Ill. 51.3 57.8 -11.2 4.3 0.5 804.6 8.4 5 FirstMerit, Akron, Ohio 207.4 291.8 -28.9 17.2 25.8 -33.3 8.3 6 Midland States Bancorp, Effingham, Ill. 80.8 43.7 84.8 5.5 5.7 -3.3 6.8 7 Ameris Bancorp, Moultrie, Ga. 72.4 67.6 7.0 4.4 1.8 152.4 6.1 8 Parkway Bancorp, Harwood Heights, Ill. 256.0 167.2 53.1 14.4 14.4 0.3 5.6 9 Hanmi Financial, Los Angeles 102.4 91.6 11.8 4.9 0.0 4.8 10 Bridgeview Bancorp, Bridgeview, Ill. 109.2 95.0 15.0 5.0 4.1 21.3 4.6 TOTAL FOR TOP 1,000 BANKS 256,384.8 228,367.9 12.3 1,096.2 1,964.9 -44.2 0.4

Construction and Land Loans Total Nonperforming Nonperf./ 2014 2013 ’13-’14 2014 2013 ’13-’14 Total ($Mil.) ($Mil.) % Chg. ($Mil.) ($Mil.) % Chg. (%) 1 First Bancorp, San Juan, P.R. $104.4 $160.3 -34.9 $37.1 $66.0 -43.7 35.6 2 Beach Community Bsh., Ft. Walton Beach, Fla. 120.2 111.2 8.1 39.5 57.2 -31.1 32.8 3 Banco Popular, San Juan, P.R. 333.0 449.0 -25.8 74.0 219.0 -66.2 22.2 4 Brand Group Holdings, Lawrenceville, Ga. 270.5 210.7 28.4 58.0 73.3 -20.9 21.4 5 National Bank, Greenwood Village, Colo. 118.2 148.8 -20.6 24.1 37.9 -36.5 20.4 6 Hamilton State Bancshares, Hoschton, Ga. 129.1 82.1 57.3 23.9 30.3 -21.2 18.5 7 Standard Bancshares, Hickory Hills, Ill. 110.3 140.3 -21.3 20.3 17.4 16.7 18.4 8 Anchor Bancorp Wisconsin, Madison, Wis. 129.4 124.0 4.4 19.2 25.5 -24.9 14.8 9 Parkway Bancorp, Harwood Heights, Ill. 126.6 145.3 -12.9 18.5 25.4 -27.4 14.6 10 Certusholdings, Atlanta 125.3 125.6 -0.2 15.3 25.4 -39.8 12.2 TOTAL FOR TOP 1,000 BANKS 197,385.0 171,753.5 14.9 3,941.1 6,828.8 -42.3 2.0 Source: Trepp Bank Navigator May 6, 2015 Real Estate 16 ALERT

RANKINGS Banks With Largest Holdings of Foreclosed Commercial Properties Based on loan balances when seizure occurred Construction 2014 2013 Commercial Multi-family And Land Total Total ’13-’14 ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. 1 Wells Fargo, San Francisco $370.0 $35.0 $505.0 $910.0 $1,250.0 -27.2 2 PNC, Pittsburgh 47.5 17.7 118.6 183.7 195.6 -6.1 3 Bank of America, Charlotte 77.0 3.0 56.0 136.0 128.0 6.3 4 Banco Popular, San Juan, P.R. 69.4 11.1 46.1 126.6 171.4 -26.1 5 Hilltop Holdings, Dallas 37.1 2.3 81.3 120.8 135.9 -11.1 6 TD Bank, Cherry Hill, N.J. 89.6 0.6 18.1 108.2 200.4 -46.0 7 BB&T, Winston-Salem, N.C. 67.0 0.2 33.6 100.8 180.4 -44.1 8 First Bancorp, San Juan, P.R. 75.2 0.4 15.8 91.4 119.2 -23.4 9 Trustmark, Jackson, Miss. 22.0 1.2 62.9 86.2 94.8 -9.1 10 Fifth Third Bancorp, Cincinnati 36.7 1.3 43.0 81.0 148.1 -45.3 11 Amboy Bancorporation, Old Bridge, N.J. 5.0 12.8 60.1 77.9 88.1 -11.5 12 Valley View Bancshares, Overland Park, Kan. 14.3 0.0 63.2 77.5 111.3 -30.4 13 Oriental Financial, San Juan, P.R. 41.2 0.0 31.6 72.8 59.3 22.8 14 Synovus Financial, Columbus, Ga. 16.5 0.0 53.7 70.1 90.5 -22.5 15 First Citizens Bancshares, Raleigh 29.6 3.0 34.4 67.0 62.5 7.3 16 Wintrust Financial, Rosemont, Ill. 32.8 6.9 23.2 62.9 103.0 -39.0 17 Capital Bank Financial Corp., Coral Gables, Fla. 16.6 0.2 45.6 62.4 107.9 -42.1 18 Bond Street Holdings, Weston, Fla. 22.1 0.2 39.5 61.8 29.6 108.3 19 New York Community Bancorp, Westbury, N.Y. 7.6 48.5 5.6 61.6 69.7 -11.6 20 BMO Financial, Wilmington, Del. 36.3 1.5 22.2 59.9 78.1 -23.2 21 Beach Community Bsh., Ft. Walton Beach, Fla. 17.5 0.0 40.1 57.7 57.1 0.9 22 U.S. Bancorp, Minneapolis 22.6 5.3 27.5 55.4 117.1 -52.7 23 FirstMerit, Akron, Ohio 37.8 1.1 15.1 54.0 62.1 -12.9 24 J.P. Morgan, New York 50.0 1.0 3.0 54.0 16.0 237.5 25 Washington Federal, Seattle 6.7 0.0 47.2 53.9 78.9 -31.7 26 Ameris Bancorp, Moultrie, Ga. 17.5 0.1 34.7 52.2 66.9 -22.0 27 Simmons First National, Pine Bluff, Ark. 15.4 0.1 36.0 51.4 75.8 -32.2 28 First Banks, Clayton, Mo. 5.2 0.7 44.5 50.5 63.6 -20.6 29 Regions Financial, Birmingham, Ala. 20.5 0.0 29.3 49.8 51.2 -2.6 30 Arvest Bank, Bentonville, Ark. 29.8 0.3 17.6 47.7 54.3 -12.1 31 Parkway Bancorp, Harwood Heights, Ill. 15.5 0.1 30.2 45.8 64.0 -28.4 32 Hancock Holding, Gulfport, Miss. 34.7 0.1 10.8 45.6 57.0 -20.0 33 Metropolitan Bank, Chicago 27.2 8.9 9.0 45.2 52.5 -14.0 34 Dickinson Financial, Kansas City, Mo. 3.3 0.0 40.7 44.1 52.2 -15.6 35 Georgia Bancshares, Peachtree City, Ga. 2.1 0.0 41.8 44.0 16.9 159.8 36 International Bancshares, Laredo, Texas 4.4 0.0 37.1 41.5 51.3 -19.1 37 National Americas Holdings, New York 26.0 0.0 14.5 40.5 49.0 -17.2 38 SunTrust Banks, Atlanta 24.9 0.0 14.5 39.4 67.7 -41.8 39 Great Southern Bancorp, Springfield, Mo. 8.0 2.9 28.2 39.0 48.3 -19.2 40 BNC Bancorp, High Point, N.C. 8.3 0.1 29.7 38.1 36.8 3.5 41 Porter Bancorp, Louisville, Ky. 14.5 4.9 18.3 37.7 25.3 49.0 42 Doral Financial, San Juan, P.R. 26.6 0.0 11.0 37.6 32.1 17.0 43 Republic Bancorp Co., Oak Brook, Ill. 34.4 0.4 2.4 37.2 39.2 -5.2 44 F.N.B. Corp., Pittsburgh 8.5 0.0 28.5 37.0 37.1 -0.4 45 IberiaBank, Lafayette, La. 13.5 2.0 20.0 35.5 77.0 -53.9 See FORECLOSED PROPERTIES on Page 17 May 6, 2015 Real Estate 17 ALERT

RANKINGS Banks With Largest Holdings of Foreclosed Commercial Properties Continued From Page 16 Construction 2014 2013 Commercial Multi-family And Land Total Total ’13-’14 ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. 46 Cadence Bancorp, Houston $27.3 $0.3 $7.3 $34.8 $35.7 -2.4 47 Summit Financial, Moorefield, W. Va. 5.0 0.2 29.6 34.8 41.5 -16.3 48 FMB Bancshares, Lakeland, Ga. 3.2 0.0 30.7 33.9 34.3 -1.1 49 Western Alliance Bancorporation, Phoenix 14.8 0.0 18.6 33.4 37.0 -9.9 50 MB Financial, Chicago 8.7 0.3 24.2 33.2 39.8 -16.6 51 BOK Financial, Tulsa, Okla. 19.8 0.0 12.8 32.7 37.6 -13.1 52 C1 Financial, Saint Petersburg, Fla. 12.8 0.0 19.3 32.1 36.9 -12.9 53 SCBT Financial, Columbia, S.C. 18.6 0.0 13.5 32.1 48.4 -33.6 54 Pacwest Bancorp, Los Angeles 2.4 4.8 24.8 32.0 51.7 -38.0 55 Builders Financial, Chicago 0.0 0.0 31.5 31.5 0.0 56 Central Bancompany, Jefferson City, Mo. 7.2 1.4 22.9 31.5 32.3 -2.6 57 Capital City Bank, Tallahassee, Fla. 11.8 0.0 19.4 31.3 41.4 -24.6 58 Bridgeview Bancorp, Bridgeview, Ill. 16.6 0.6 13.9 31.2 42.1 -26.0 59 Talmer Bancorp, Troy, Mich. 21.4 0.3 9.4 31.1 20.7 50.4 60 Adam Bank, College Station, Texas 6.9 0.0 23.7 30.7 30.4 0.9 61 BancorpSouth, Tupelo, Miss. 3.3 0.1 27.2 30.5 60.3 -49.3 62 MUFG, New York 22.3 0.0 8.2 30.5 52.8 -42.2 63 Umpqua Holdings, Portland, Ore. 20.4 0.0 9.9 30.2 19.3 56.6 64 Santander Holdings USA, Boston 13.8 15.7 0.4 29.9 90.1 -66.8 65 United Bankshares, Charleston, W. Va. 9.4 1.1 18.7 29.1 26.2 11.2 66 Bank of the Ozarks, Little Rock, Ark. 17.3 0.8 11.0 29.1 41.9 -30.5 67 Renasant, Tupelo, Miss. 9.4 1.2 18.5 29.1 43.9 -33.7 68 East West Bancorp, Pasadena, Calif. 21.0 0.5 7.5 29.0 31.3 -7.3 69 Farmers Capital Bank, Frankfort, Ky. 9.5 0.5 17.6 27.6 33.3 -17.1 70 Hamilton State Bancshares, Hoschton, Ga. 13.2 0.0 14.2 27.4 33.6 -18.6 71 Community Bancshares of Mississippi, Brandon, Miss. 8.2 1.2 17.8 27.3 28.0 -2.5 72 Diamond Bancorp, Washington, Mo. 5.9 0.2 20.9 27.0 31.1 -13.0 73 Cathay General Bancorp, Los Angeles 9.6 3.1 14.1 26.8 52.8 -49.3 74 Minnwest, Minnetonka, Minn. 3.7 0.0 23.0 26.7 33.0 -19.2 75 Old Second Bancorp, Aurora, Ill. 11.9 1.5 13.2 26.6 33.7 -21.1 76 Northwest Bancorporation of Illinois, Palatine, Ill. 20.0 0.0 6.4 26.4 0.0 77 Community Trust Bancorp, Pikeville, Ky. 6.3 1.3 18.7 26.3 29.8 -11.5 78 North American Bancshares, Sherman, Texas 5.0 0.0 21.3 26.3 27.9 -5.8 79 Macatawa Bank, Holland, Mich. 13.8 0.0 11.9 25.7 35.8 -28.1 80 Union First Market Bankshares, Richmond, Va. 6.1 0.0 18.8 24.9 31.9 -21.9 81 Home State Bancorp, Crystal Lake, Ill. 12.6 0.0 12.3 24.9 23.3 7.0 82 Chambers Bancshares, Danville, Ark. 2.4 0.4 21.3 24.1 39.4 -38.8 83 Centerstate Banks, Davenport, Fla. 13.2 0.0 10.4 23.6 20.5 15.1 84 Citizens Bancshares Co., Kansas City, Mo. 10.7 0.0 12.8 23.5 14.2 66.1 85 Community First Bancshares, Harrison, Ark. 8.6 0.3 14.4 23.2 24.2 -3.9 86 Watford City Bancshares, Watford City, N.D. 17.0 0.0 5.3 22.3 22.1 0.9 87 Bancorp, Wilmington, Del. 12.7 0.0 9.2 21.9 24.5 -10.4 88 Commerce Bank and Trust, Topeka, Kan. 12.4 0.3 9.3 21.9 20.0 9.5 89 Fidelity Southern, Atlanta 13.8 0.0 8.0 21.7 28.1 -22.8 90 BBCN Bancorp, Los Angeles 18.6 0.4 2.5 21.5 16.5 30.0 91 Olney Bancshares of Texas, Olney, Texas 7.3 0.5 13.7 21.5 6.4 237.7 See FORECLOSED PROPERTIES on Page 18 May 6, 2015 Real Estate 18 ALERT

RANKINGS Banks With Largest Holdings of Foreclosed Commercial Properties Continued From Page 17 Construction 2014 2013 Commercial Multi-family And Land Total Total ’13-’14 ($Mil.) ($Mil.) ($Mil.) ($Mil.) ($Mil.) % Chg. 92 Tennessee State Bancshares, Pigeon Forge, Tenn. $8.0 $0.7 $12.5 $21.1 $21.2 -0.5 93 First Financial Bancorp, Cincinnati 8.4 4.4 8.2 21.0 45.4 -53.7 94 Columbia Banking System, Tacoma, Wash. 7.4 0.2 13.3 20.9 27.8 -25.0 95 Bancplus Corp., Ridgeland, Miss. 5.4 0.2 15.0 20.5 22.9 -10.6 96 Home Bancshares, Conway, Ark. 10.8 0.5 9.0 20.4 41.3 -50.7 97 National Bank Holdings, Greenwood Village, Colo. 6.7 0.3 13.2 20.2 59.3 -66.0 98 Certusholdings, Atlanta 8.8 0.5 10.6 20.0 54.0 -63.0 99 CNB Bancshares, Sevierville, Tenn. 15.8 0.0 4.1 19.9 24.0 -16.9 100 M&T Bank, Buffalo 13.4 0.0 6.5 19.8 29.8 -33.3 TOTAL FOR TOP 100 BANKS 2,209.1 217.3 2,803.8 5,230.1 6,604.5 -20.8 TOTAL FOR TOP 1,000 BANKS 3,373.7 302.8 4,153.5 7,830.0 10,641.8 -26.4 Source: Trepp Bank Navigator

CALENDAR CALENDAR

Main Events Dates Event Location Sponsor Information June 15-16 U.S. Real Estate Opportunity & Private Fund Inv. Forum New York IMN www.imn.org Nov. 17-19 REIT World Las Vegas NAREIT www.reit.com

Events in US Dates Event Location Sponsor Information May 12 Asset & Property Management Symposium Texas Dallas IREM iremams.com/tx May 13-14 Spring Meeting 2015 Houston ULI www.uli.org May 14 Real Estate CFO Summit New York WeiserMazars weisermazarscfosummit.com May 14 Union Market Tour & Reception Washington RELA www.rela.org May 17-20 ReCon Las Vegas ICSC www.icsc.org May 19 Breakfast Meeting New York RELA www.rela.org May 26 Real Estate Investment World Latin America 2015 Miami Terrapinn www.terrapinn.com May 28 Real Estate Crowdfunding Summit West Los Angeles iGlobal Forum www.iglobalforum.com May 28-29 Financing/Inv. in Data Centers & Cloud Infrastructure New York IMN www.imn.org May 31-June 2 International Hospitality Industry Investment Conf. New York NYU www.scps.nyu.edu June 2 Mulfifamily Leadership Summit New York CapRate Events cre-events.com/nycmultifamily June 3 Commercial Real Estate Technology Summit New York iGlobal Forum www.iglobalforum.com June 3 Boutique Hotel Investment Conference New York BLLA bllaevents.com June 3 InterFace Carolinas Charlotte InterFace Conference interfaceconferencegroup.com June 4 Multifamily Forum Southern California Los Angeles Marcus & Millichap mmcaforum.com June 4 Young Leaders’ Forum New York Real Estate Weekly rewyoungleadersforum.com June 8-10 CRE Finance Council Annual Conference 2015 New York CRE Finance Council www.crefc.org June 9-10 REIT Week 2015 New York NAREIT www.reit.com June 10 Northeast Industrial Real Estate Summit Jersey City, N.J. CapRate Events cre-events.com June 10-11 Seniors Housing Midwest Chicago InterFace Conference interfaceconferencegroup.com June 15-16 Greater Chicago & Midwest Data Center Summit Chicago CapRate Events cre-events.com/dcchicago2015 To view the complete conference calendar, visit The Marketplace section of REAlert.com

May 6, 2015 Real Estate 19 ALERT West Coast Shopping Centers Pitched continues as an advisor. While some in the industrial sector grumble about what A Kimco Realty partnership is marketing four West Coast they view as Industrial Income’s indecision, the firm’s patience shopping centers that could fetch $89 million. may pay off. Warehouse properties have only grown hotter The properties, totaling 501,000 square feet, are all in afflu- since the company began exploring options for cashing out ent communities. Three are in Northern California and one is its initial investors. The REIT remains well within its expected in suburban Seattle. At the estimated value, the initial annual lifecycle, leaving it under no immediate deadline to act. yield would be 5.5%. Investors are being told that a buyer could Two of the biggest deals in the sector’s history have come in boost the yield to 6.5% within 18 months. recent months. CBRE is marketing the package for Kimco, a REIT in New Blackstone, after considering an IPO forIndcor Properties, Hyde Park, N.Y., and its partner, BIG Shopping Centers USA of its industrial platform, sold the Chicago company and its 117 Beverly Hills. The partnership prefers to sell to a single buyer, million-sf portfolio for a whopping $8.1 billion in February. but will consider bids on individual properties. The buyer: the same Global Logistic partnership that is now The centers, which are 91% leased, have grocers, drug stores looking at Industrial Income. or both as anchors. Household income within a three-mile Also, KTR Capital, a New York fund shop, last month struck radius averages $102,000. a $5.9 billion agreement to sell its operating platform and 70 The pitch is that a buyer could increase net operating income million-sf industrial portfolio to a partnership between San 58% in the next decade by leasing up vacant space and raising Francisco-based Prologis and Norges Bank Investment of Nor- below-market rents upon rollover. The 247,000 sf of anchor way. The stabilized capitalization rate is 5.5%. Blackstone and space is leased at an average rate of $5.95/sf, which is 42% Global Logistic took a look at that portfolio, which, like Indus- below market rates. In-place rents are 13% below market aver- trial Income’s offering, encompassed core properties. ages for the 183,000 sf of leased in-line space and 23% below Industrial Income’s distribution warehouses are in 19 major for the 27,000 sf of pad space. markets. The leases of the 551 tenants have a weighted average The most valuable of the properties is the 164,000-sf Rheem remaining term of 5.3 years. The vast majority of the portfolio Valley Plaza, at 472 Center Street in the Bay Area town of Mor- — 278 buildings totaling 55.8 million sf — is stabilized, with aga, Calif., about 20 miles east of San Francisco. The center is a 93% occupancy rate. The company acquired the remaining 88.7% leased. Its anchors are TJ Maxx and CVS. The annual net five buildings, totaling 1.8 million sf, to reposition or redevelop operating income is $1.8 million. them. The other three properties are: When the portfolio was shopped last year, the bidders • The 161,000-sf Cable Park, at 8861 Greenback Lane in Sac- included Abu Dhabi Investment Authority, DCT Industrial of ramento. Occupancy: 95%. Anchors: Save Mart and CVS. Denver, Duke Realty of Indianapolis, a Calpers-Bentall Kennedy Net operating income: $1.1 million. partnership and the joint venture between Prologis and Norges. • The 108,000-sf Lakewood Shopping Center, at 8852 Lake- As it explores a portfolio trade via property brokers, Indus- wood Drive in Windsor, Calif., a town in Sonoma County. trial Income has kept BofA engaged. An IPO — the preferred Occupancy: 91%. Anchor: Raley’s. Net operating income: end-game for most nontraded REITs — is still a back-up option. $968,000. Industrial Income was launched in 2010 and quickly • The 67,000-sf Panther Lake, at 20600 108th Avenue in amassed its giant portfolio. Like KTR and Blackstone, it Kent, Wash. Occupancy: 89%. Anchors: Rite Aid and Dol- scooped up properties at depressed prices when few others lar Tree. Net operating income: $945,000.  were in acquisition mode. Since then, industrial properties have soared in value. Black Creek has already launched a follow-up nontraded Block ... From Page 1 REIT, called Industrial Property Trust. That outfit is led by America to begin exploring its strategic options in 2013, with Dwight Merriman, also chief executive of Industrial Income. So a focus on either a portfolio sale or an IPO. The company was far, the new vehicle has acquired 48 buildings totaling 7.2 mil- under no pressure to sell, but wanted to consider its alterna- lion sf for $536.8 million.  tives in light of rising prices for industrial properties. After the REIT decided to move ahead with a portfolio Holiday ... From Page 1 offering, BofA took bids from several marquee investors early last year. But no deal was struck, and last summer Indus- restaurant, a pool and fitness and business centers. There is trial Income shifted its attention to a possible IPO. Investors almost 9,000 sf of event space. The site is a few blocks west of and brokers expected the REIT to list itself on a public stock Columbus Circle and Central Park. exchange by the end of last year, but nothing materialized. Manhattan hotels have led the country in terms of perfor- Meanwhile, Industrial Income decided once again to explore a mance, registering a 19% increase in revenue per room over portfolio trade, quietly giving the listing to Eastdil and CBRE, the past five years. But the rate of growth has slowed slightly in the industrial sector’s two powerhouse property brokers. BofA recent months.  5 Marine View Plaza, Suite 400 Hoboken NJ 07030-5795 201-659-1700 FAX: 201-659-4141

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Hotel

Estimated Property Size Value Owner Broker Color Hilton Daytona Beach 744 rooms $90 million LNR Partners, HFF Oceanfront resort. Offered unencumbered by a Resort, $121,000/room Miami Beach management contract. Has 60,000 sf of meeting Daytona, Fla. space, two pools, a fitness facility and seven bars and restaurants. Across the street from the Ocean Center convention facility.

Industrial

Estimated Property Size Value Owner Broker Color 47700 Kato Road and 199,000 sf $36 million Digital Realty, CBRE A mix of manufacturing and research-and- 1055 Page Avenue, 100% leased $181/sf San Francisco development space, fully occupied by SolarCity under Fremont, Calif. a lease with 10.5 years remaining. The two buildings were completed in 1996 and renovated this year.

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You can start your free trial at CMAlert.com. Or fax this coupon to 201-659-4141. To order by phone, call 201-659-1700. Or mail to: Commercial Mortgage Alert, 5 Marine View Plaza #400, Hoboken, NJ 07030. May 6, 2015 Real Estate 23 ALERT Capital Sought for High-Yield Fund partners get a preferred return of 6-7%, the sponsor would be entitled to 40% of profits. An investment shop that buys opportunistic office and apartment properties is seeking to raise up to $100 million Well-Leased Pittsburgh Offices for Sale of equity for its third fund. King Penguin Properties shoots for a 20% return. The vehi- USAA Real Estate is shopping a Pittsburgh office property cle, King Penguin Opportunity Fund 3, could buy $300 mil- that’s valued at about $45 million. lion of properties when leveraged. The 212,000-square-foot Park Place Corporate Center is well The New York operator mostly focuses on secondary mar- leased, but there is the potential of raising rents as leases expire. kets, but also considers Manhattan. For example, its first USAA has tapped HFF to handle marketing. two vehicles, which raised a combined $25 million of equity, The two-building complex, at 1000 and 2000 Commerce bought multi-family properties in Harlem. Drive, is 95% occupied. Energy company Williams signed a Most purchases will cost less than $25 million, as King long-term lease for more than half the space in 2012. The Penguin looks to avoid competition with large institutional weighted average remaining lease term is about eight years, buyers. Its most-recent acquisitions have been in Pittsburgh, and in-place rents are below the market average. reflecting the firm’s focus on areas with growth potential in San Antonio-based USAA acquired the Class-A buildings for rents and occupancy. $18 million in 2012, when they were about three-quarters vacant. The shop is ledMichael Mikelic and Edward Rivadeneira. The seller, local firm DiCicco Development, had just completed a Mikelic formed the company in 2007 to invest in distressed substantial renovation that included new mechanical systems properties, and Rivadeneira joined soon after. The firm is and updates to common areas. USAA then recruited Williams, a soliciting capital from family offices and wealthy individu- public company in Tulsa, Okla., as the anchor tenant. als, as well as via broker-dealers. The property is just off Interstate 376, near Pittsburgh Inter- The fund would not have a management fee. After limited national Airport. 

MARKET SPOTLIGHT Northern and Central Florida Apartment Properties  Steady job growth and rising rents are attracting buyers. Capitalization rates are around 6% – high compared to other strong markets.  The dearth of construction since the condo-market crash has kept a lid on supply, bolstering fundamentals. For example, Orlando’s 95% occupancy rate is up 6 percentage points since 2010 and is expected to climb further this year.  Value-added plays are dominating activity in Tampa and Orlando. But Jacksonville, with its increasingly affluent renter pool, is likely to see record valuations for new luxury properties. On the Market Hit No. of Estimated Value Property Seller Market Apts. ($Mil.) (Per Apt.) Broker Miami-Dade portfolio Maynada Investments March 520 $165 $315,000 ARA Newmark 330 Third Street, St. Petersburg (pre-sale) American Land Ventures April 358 115 321,000 ARA Newmark Evander Square, Celebration Faison Enterprises April 400 100 250,000 Walker & Dunlop Citilakes Lux, Orlando Flournoy Development April 346 69 200,000 Walker & Dunlop Thornton Park, Jacksonville PREI, Epoch April 474 63 133,000 JLL Broadstone Clearwater, Clearwater Alliance Residential April 240 48 200,000 Walker & Dunlop The Slade, Tampa Crescent Heights April 214 43 200,000 HFF Recent Deals No. of Sales Price Property Buyer Closed Apts. ($Mil.) (Per Apt.) Broker Gallery at Mills Park, Orlando Heitman April 310 $67 $215,000 JLL Viera at Westchase, Tampa Forum Real Estate March 390 53 135,000 Berkadia Tortuga Bay, Orlando H&R REIT April 314 50 158,000 Cushman & Wakefield Heritage on Millenia, Orlando Milestone Group March 303 40 132,000 CBRE Whitepalm, Port Orange Carter Haston Holdings April 306 40 132,000 CBRE May 6, 2015 Real Estate 24 ALERT

THE GRAPEVINE executive of Landwin Realty, a REIT in reporting to founder Seth Singerman. Encinco, Calif., operated by Landwin Elrod previously spent five years at ... From Page 1 Management. Hartman last year Goldman Sachs. Singerman is seeking to co-founded Republic Capital, and hire another acquisitions associate. The as a director of acquisitions and devel- before that was a managing director at firm this year held a final close on $275 opment last month. Rice came from Astrum Investment, both Los Angeles million of equity for SRE Opportunity Dallas-based Lincoln Property, where shops targeting industrial properties. Fund 2. he handled acquisitions in Southern He’s also had stints at Morgan Stanley California for about two years. He and fund shops Trinity Investment of JBG Cos. has hired an investor-rela- previously worked at CBRE for a year. Stockton, Calif., and Dunmore Capital of tions associate. Lily Goldstein started Rice spent 10 years in the U.S. Marine Sacramento. this week at the firm’s Chevy Chase, Corps and was awarded a Bronze Star in Md., headquarters to work on capital Afghanistan. Pacific Industrial, based in Avison Young has hired its first retail raising and day-to-day communica- Long Beach, Calif., acquires and devel- investment-sales broker in Atlanta. tion with the fund shop’s limited ops industrial properties and currently Theresa Johnson arrived last month partners. She reports to principal has 2.4 million sf under development. as a senior vice president, reporting Moina Banerjee. Goldstein joined from It was founded in 2012 by Dan Floriani to managing director Steve Dils, who Carlyle Group of Washington, where and Neil Mishurda. leads the office. Johnson focuses on she was an analyst. She replaced retail sales throughout the Southeast, Robert Kaufman, who jumped to FTV Analyst Andrew Youngling joined Kinship with an emphasis on grocery-anchored Capital of San Francisco in the past Capital of Chicago last month to work properties, power centers and malls. month or so. on acquisitions and asset management. She moved over from local firmBull He spent the past two years at Chicago- Realty, where she worked on the capital- New York investment shop Blackpoint based LaSalle Investment, most recently markets team for seven years and was a Partners wants to hire an analyst with as a senior financial analyst, and senior vice president. 3-5 years of experience in financial previously worked as an associate at modeling and acquisitions. Duties also Morningstar for nearly a year. Chicago fund operator Singerman Real include some asset management and Estate has added an associate to work advisory work. The recruit would report Investment professional John on acquisitions and asset manage- to Joshua Schwalbe. Send resumes and Hartman started last month as chief ment. Rebecca Elrod started last week, cover letters to [email protected].

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