Amazon’s HQ2 making waves in Washington-area housing

Amazon | December 02, 2019

While all eyes are on Amazon today for Cyber Monday, the news of its HQ2 may only be a distant memory. Believe it or not, it’s been over a year since the tech monolith announced its second headquarter would find a home in Arlington County, Virginia, at Crystal City, and Queens, New York at Long Island City. Only three months later, Amazon backed out of headquartering in New York and focused solely on Crystal City. With over a year in the rearview mirror, Realtor.com released a report recently on the effect that the news of HQ2 had on surrounding housing markets. According to the report, areas around both D.C. and New York experienced sizable changes in the wake of both announcements.

Spotlight

The mortgage industry has been struggling since the implementation of the TILA-RESPA Integrated Disclosure (TRID) Act to produce and deliver accurate documents to consumers on a significantly shortened timetable. It seems that adopting electronic closing (e-closing) procedures should have become mainstream procedure by now, yet it remains on the fringe of common practice. Consumers and investors have played a role in this delay, along with lenders themselves, despite the Consumer Finance Protection Bureau's (CFPB) advocacy for using e-closing procedures. Why would the mortgage industry and its consumers resist a change that will produce more efficient closings with better accuracy?

Spotlight

The mortgage industry has been struggling since the implementation of the TILA-RESPA Integrated Disclosure (TRID) Act to produce and deliver accurate documents to consumers on a significantly shortened timetable. It seems that adopting electronic closing (e-closing) procedures should have become mainstream procedure by now, yet it remains on the fringe of common practice. Consumers and investors have played a role in this delay, along with lenders themselves, despite the Consumer Finance Protection Bureau's (CFPB) advocacy for using e-closing procedures. Why would the mortgage industry and its consumers resist a change that will produce more efficient closings with better accuracy?

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REAL ESTATE TECHNOLOGY

Capital Square 1031 Acquires Newly Constructed, 2.69 Million-Square-Foot, State-of-the-Art Amazon Distribution Facility

Capital Square | February 16, 2022

Capital Square 1031, a leading sponsor of Delaware statutory trust (DST) offerings for Section 1031 exchange and other accredited investors, announced today the acquisition of a 2,690,000-square-foot distribution facility on a long-term absolute net lease to Amazon.com Inc. (NASDAQ: AMZN). The facility was acquired on behalf of CS1031 Zero Coupon Fulfillment Center, DST. This significant offering is designed for Section 1031 exchange investors who need additional debt because their replacement property has lower leverage than their relinquished property, Section 1031 requires equal or greater debt to qualify for 100% tax deferral, but leverage today is much lower than in the past, making high LTV offerings very desirable. In addition to exchangers, other owners of real estate want to invest in real estate like this that generates excess passive losses from a combination of depreciation, cost segregation and bonus depreciation to offset taxable income from other real estate investments. Due to the quality of the Amazon facility and financial strength of the tenant, this offering has both a compelling tax angle and exceptional economics for Capital Square's investors nationwide." Louis Rogers, founder and chief executive officer. Located at 500 32nd St. S.W., the 169.6-acre property is adjacent to U.S. Route 65 and Interstate 80 in Bondurant, Iowa, a premiere industrial submarket in Greater Des Moines. The four-story structure was completed in the fourth quarter of 2020. The building was designed by Amazon with the most recent technological advances and high-grade materials and can process nearly one million packages per day by implementing both robotics and human labor to maximize efficiencies.1,2 The property is leased on an absolute net basis and is guaranteed by Amazon, which enjoys an investment-grade credit rating of AA from by S&P.3 Structured to be highly tax efficient, this acquisition includes a dual loan system that shields investors from phantom income, The lease also enjoys unsurpassed creditworthiness from the full guaranty of Amazon and its investment-grade corporate credit." Whitson Huffman, chief strategy and investment officer. As of February 2022, Amazon ranked as the world's fifth largest company by market capitalization, and the fourth largest in the United States at nearly $1.52 trillion.4 It is the second largest firm in the Fortune 500. Amazon operates its retail sales and distribution activity through its Amazon Services business line, the sole tenant of the Bondurant, Iowa facility. As of December 2021, Amazon's domestic industrial network totaled more than 347.6 million square feet of active facilities, with more than 125.6 million square feet either planned or under development.5 Amazon Robotics sort fulfillment centers are the largest facilities in the Amazon logistical network. CS1031 Zero Coupon Fulfillment Center, DST seeks to raise $52.2 million in equity from accredited investors. Greater Des Moines has experienced a great deal of interest from developers and end users, with more than 630 acres purchased since 2019.6 The MSA is also attractive to technology companies. Des Moines enjoys a high ranking on the 2021 lists "Top Emerging North American Tech Market" by CBRE, "Most Resilient Tech Hub" by LinkedIn, and "Rising Star for Tech Jobs" by CompTIA. As a result, tech companies, such as Apple, Facebook and Microsoft have found the area to be a strategic and cost-effective location for data center operations. Capital Square acquired the property from Mesirow Realty Sale-Leaseback Inc. ("Mesirow"). Mesirow's Sale-Leaseback Capital team structured and financed the development of this property, starting prior to the commencement of construction. Mesirow's breadth of specialized expertise, depth of relationships and balance sheet strength has enabled the firm to execute more than $8 billion in single-tenant transactions while serving the long-term strategic needs of organizations such as Amazon. Since its founding in 2012, Capital Square has acquired 149 real estate assets for over 4,600 individual investors, spanning across 5,800 investments, seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation. About Capital Square Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Since 2012, Capital Square has completed more than $4.9 billion in transaction volume. Capital Square's executive team has decades of experience in real estate investments. Its founder, Louis Rogers, has structured hundreds of investment offerings totaling in excess of $5 billion. Capital Square's related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for a growing number of high net worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for five consecutive years. Additionally, in 2021, the company was ranked 101st on the list of Inc. 5000 Washington D.C. Metro's Fastest-Growing Private Companies. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense's list of fastest growing companies. Capital Square was listed by Virginia Business on their "Best Places to Work in Virginia" report in 2019 and 2021 as well as on their "Fantastic 50" reports in 2019 and 2020.

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REAL ESTATE TECHNOLOGY

The pan-European institutional investor focused on asset-backed investments, Patron Capital, has closed its most recent fund, raising EUR 844 million

businesswire | January 11, 2021

Benefactor Capital, the container European institutional speculator zeroed in on property-upheld ventures, has shut its latest asset, raising €844 million ($1.038 billion), including roughly €128 million ($157 million) of co-venture capital for Patron Capital, L.P. VI ('Fund VI'). Of the all out €844 million raised for Fund VI, 83% came from Patron's current speculator base and existing connections, with most of responsibilities coming from North America, trailed by Asia Pacific, Europe, and the Middle East. Financial specialists included benefits reserves, sovereign abundance reserves, enrichments, establishments and resource supervisors. Evercore went about as the essential position specialist. Asset VI will proceed with a similar speculation system as Patron's past assets, shrewdly focusing on upset and underestimated ventures, straightforwardly or by implication identified with property, across Western Europe. The asset will put resources into singular properties across a scope of areas, just as in property-upheld corporate speculations and credit openings. Lately, the Fund has just finished a few speculations and is in the last phases of shutting on a few others, utilizing around 25% of the Fund's venture limit. Keith Breslauer, Patron Capital’s founder and Managing Director, said: “This is the seventh fund that we have closed in our 21-year history. In this time, we have established a proven track record in identifying opportunities and maximising value, built exceedingly strong relationships and, ultimately, demonstrated that we can deliver attractive returns in any economic environment. This is why we have been able to close this latest fund with such a high proportion of our existing investors and relationships, as well as bring in the final tranche of capital against a backdrop of extreme uncertainty due to the COVID-19 pandemic. “The pandemic has accelerated a number of existing trends across different real estate sectors in Europe, as well as created opportunities to acquire fundamentally sound but mismanaged assets at attractive prices. Our experienced team, granular approach and in excess of €3 billion of firepower means we are well positioned to make the most of these opportunities and we are actively looking to deploy capital.” About Patron Capital Patron represents approximately €4.3 billion of capital across several funds and related co-investments, investing in property, corporate operating entities whose value is primarily supported by property assets and distressed debt and credit related businesses. Since it was established in 1999, Patron has undertaken more than 170 transactions across 84 investments and programs involving over 65 million square feet (6 million square metres) in 16 countries, with many of these investments realised. Investors represent a variety of sovereign wealth funds, prominent universities, major institutions, private foundations, and high net worth individuals located throughout North America, Europe, Asia and the Middle East. The main investment adviser to the Funds is Patron Capital Advisers LLP, which is based in London, and Patron has other offices across Europe including Barcelona and Luxembourg; the group is comprised of 71 people, including a 40-person investment team.

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REAL ESTATE TECHNOLOGY

KKR is growing its Texas real estate industrial portfolio with new acquisitions in Dallas and Houston.

businesswire | December 04, 2020

KKR, a main worldwide speculation firm, today declared the securing of two mechanical appropriation properties in Texas adding up to around 1.8 million square feet at a total buy cost of roughly $171 million. The recently obtained properties are situated in the significant business sectors of Dallas and Houston. Both are best in class satisfaction focuses with a normal vintage 2019. The properties were 100% rented at securing to two distinctive speculation grade occupants on a drawn out premise. The properties were obtained from Hines, the worldwide land firm, which built up the resources. The two properties are the most recent mechanical resources procured by KKR's center in addition to land system, developing its all out modern land portfolio to around 7.2 million square feet. Over its assets, KKR claims more than 20 million square feet of mechanical property in key areas across significant metropolitan regions in the U.S. “As more consumers migrate to shopping online and expect a seamless delivery experience, the demand for modern logistics real estate in major markets continues to grow,” said Roger Morales, KKR Partner and Head of Commercial Real Estate Acquisitions in the Americas. “We are excited to help meet that demand by increasing our footprint in the Dallas and Houston markets with the addition of these two high-quality, stable assets.” Since dispatching a devoted land stage in 2011, KKR has developed land AUM to roughly $14 billion over the U.S., Europe and Asia as of September 30, 2020. The worldwide land group comprises of more than 90 committed venture experts, traversing both the value and credit organizations.

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