Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Tuesday, 05 March 2019

Somera Road Keeps Chasing Opportunities as Defaults in CMBS Dwindle

Somera Road Inc., a New York investor widely known for buying distressed loans, particularly from CMBS deals, has diversified its business substantially. While it's still highly opportunistic, it no longer relies solely on the CMBS market for its business leads.

Commercial Real Estate Direct Staff Report

Somera Road Inc., a New York investor widely known for buying distressed loans, particularly from CMBS deals, has diversified its business substantially.

While it's still highly opportunistic, it no longer relies solely on the CMBS market for its business leads. It'll pursue opportunities that might not be widely marketed or those that arise from a corporate bankruptcy.

An example of the former was its purchase earlier this year of Kansas City's City Center Square, a 657,070-square-foot office building in Kansas City, Mo., that it bought from a venture led by David Werner and Nightingale Properties. The 30-story building is roughly half full and sits in a market whose vacancy rate is pegged at 16.4 percent, according to Reis Inc.

Somera Road's plan is to upgrade the 42-year-old building, adding a fitness center and exterior spaces. To fund its effort, it lined up $60.2 million of financing from TPG Real Estate Finance Trust.

An example of the latter is its recent purchase of the Gibson Guitars factory at 1117 Church St. in the Gulch neighborhood of Nashville, Tenn. It plans to convert the property into a mix of creative office space and retail. Its purchase of the property came roughly a year after it had paid $6.4 million for 1102 Grundy St., a former piano warehouse in the city's North Gulch area that Gibson had used as a warehouse. It's converting that property into an entertainment venue that will be operated by Pins Mechanical Co. and will offer bowling, an arcade with pinball machines and bars.

Somera Road, led by Ian Ross, who had founded it in 2014, also has purchased a property in Memphis, Tenn., from the iconic guitar maker: the Gibson Guitar Building off Beale Street that it's redeveloping into creative office...





weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
warehouse-backstage