U.S. Commercial, Multifamily Mortgage Debt Reaches $3.5 Trillion

WORLD PROPERTY JOURNAL | June 13, 2019

According to the Mortgage Bankers Association's latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report, the level of commercial/multifamily mortgage debt outstanding in the U.S. rose by $45.4 billion (1.3 percent) in the first quarter of 2019. Total commercial/multifamily debt outstanding climbed to $3.46 trillion at the end of the first three months of the year. Multifamily mortgage debt alone increased $17.9 billion (1.3 percent) to $1.4 trillion from the fourth quarter of 2018. "Mortgage debt backed by commercial and multifamily income-producing properties continues to grow at a strong pace, with three of the four major capital sources - banks, life companies, and the GSEs and FHA - growing their holdings by more than one percent during the first quarter of 2019," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "REITs, finance companies and nonfinancial corporate businesses also showed strong appetites last quarter, with each growing their holdings by more than $1 billion. The depth and breadth of growth among investors signals the interest in the sector."

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REAL ESTATE TECHNOLOGY

JPAR - Real Estate Enters Lubbock, Texas Market Through Acquisition Of John Walton Realtors

JPAR - Real Estate | March 23, 2022

JPAR Real Estate, America's #1 fastest-growing, full service 100% commission brokerage, announced the acquisition of John Walton Realtors in Lubbock Texas. John Walton Realtors has been serving the Lubbock community for more than 45 years. With nearly 40 sales associates, they have a long standing legacy of serving the West Texas market that is consistent with the values of JPAR - Real Estate - integrity, productivity and service. We are excited to join forces with Wayne and Wendy Walton and all the associates of this amazing firm. Over the last 45 years they have created a market presence and legacy of service that we take very seriously. Both firms are known for exceeding customer expectations and serving the local community. We look forward to continuing that tradition of excellence." Mark Johnson, President of JPAR - Real Estate The firm's Lubbock office will remain at its current location and Wayne Walton will join the JPAR - Real Estate staff as a support broker. Wayne Walton said, "I am excited to join the JPAR - Real Estate family. Mark Johnson is an exceptional leader and visionary who has his pulse on how best to serve today's real estate professionals and the consumer. Our associates will benefit from a world-class technology platform and full service, a capped, transaction-based financial model." Lubbock is a new market for JPAR - Real Estate and is the 11th-most populous city in Texas. With a population of 257,141 in 2020, the city is also the 86th-most populous in the United States. Lubbock's nickname, "Hub City", derives from it being the economic, educational, and health-care hub of the multi-county region, north of the Permian Basin and south of the Texas panhandle. "It was important for us to partner with a solid operator like JPAR – Real Estate. Mark Johnson and the JPAR team understand the real estate brokerage business," stated Wayne Walton. We support their mission to develop influential industry leaders and we feel confident its industry-leading marketing, technology and training programs will benefit all of our associates and extend our legacy for years to come." About JPAR - Real Estate JPAR - Real Estate and JPAR Franchising is a full-service real estate brokerage and franchise platform offering a highly competitive transaction fee-based model and agent-centric culture. The JPAR platform provides agents 7 day-per-week broker support, physical office locations, a comprehensive tech stack and open architecture, physical office locations, marketing, lead generation, training, coaching, mentoring and agent health care. The company boasts more than 3,300 agents operating in 65 offices across 25 states and closes more than $8B annually in sales volume.

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REAL ESTATE INVESTMENT

ExchangeRight Fully Subscribes $124 Million 30-Property Net-Leased Portfolio

ExchangeRight | April 20, 2022

ExchangeRight, one of the nation's leaders in diversified real estate investments and strategies, has fully subscribed its $124 million Net-Leased Portfolio 50 offering, containing 30 net-leased properties covering 676,976 square feet across 17 states. The portfolio of single-tenant properties was structured to generate consistent investor distributions starting at an annualized rate of 6.12 percent. ExchangeRight has fully subscribed a $124 million 30-property net-leased portfolio focused on essential businesses. The fully occupied portfolio, offered at $124,160,000, includes properties tenanted by CVS Pharmacy, Dollar General, Dollar Tree, Family Dollar, First Midwest Bank, Fresenius Medical Care, Octapharma Plasma, Publix, Sherwin-Williams, Walgreens and WellMed. The offering launched with 10-year, fixed-rate, interest-only financing at 3.26 percent. We are grateful for those investors, advisors and representatives who have placed their trust in us to steward the wealth they have invested in Net-Leased Portfolio 50. We are intent on constructing diversified net-leased portfolios for DST investors designed to produce stable income through economic cycles, preserve investor wealth, defer investors' taxes and provide a strategic exit." Warren Thomas, a managing partner in ExchangeRight ExchangeRight and its affiliates' vertically integrated platform features over $4.8 billion in assets under management, diversified across over 1,050 properties, over 19 million square feet and throughout 44 states. More than 6,600 investors have trusted ExchangeRight to manage their capital. All of the company's current and past offerings have met or exceeded targeted cash flow distributions to investors since the company's founding. The past performance of ExchangeRight and its previous offerings does not guarantee future results. About ExchangeRight ExchangeRight pursues its passion to empower people to be secure, free and generous by providing REIT, fund and 1031 DST portfolios that target secure capital, stable income and strategic exits. The company strategically syndicates net-leased portfolios of assets backed primarily by investment-grade corporations that successfully operate in the necessity-based retail and healthcare industries, as well as diversified value-add portfolios of inline and outparcel retail spaces shadow-anchored by strong-performing grocery tenants.

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REAL ESTATE INVESTMENT

Walker & Dunlop Structures $47 Million in Financing for Savannah Opportunity Zone Development

Walker & Dunlop, Inc. | May 13, 2022

Walker & Dunlop, Inc. announced that it structured $47,000,000 in financing for the development of The Line, a 219-unit, Class A+ multifamily project in Savannah, Georgia. Situated just three blocks from the Savannah River, the development is within walking distance to all of Savannah's outstanding retail and lifestyle amenities. Located in Savannah's downtown area, the property is within the bounds of a designated Economic Opportunity Zone census tract. Opportunity zones were established by Congress in the Tax Cuts and Jobs Act of 2017 and encourage long-term investments in designated low-income areas by offering incentives in the form of lower or deferred capital gains taxes. Led by Chris Rumul and Taylor Williams, Walker & Dunlop arranged the construction financing on behalf of the developer, Standard Communities, a leading national multifamily housing investor and developer and repeat client. Collaborating across the Walker & Dunlop platform, the team pooled resources from their FHA Finance and Capital Markets groups to identify the ideal financing source for their client. The resulting financing was sourced from a regional life insurance company and includes both construction and permanent financing in a single loan. The team worked to ensure the financing terms were consistent with opportunity zone guidance, securing a 12-year construction term with four years of interest-only payments. We are incredibly proud to play a part in the development of such a unique project and are excited to bring this distinctive, elevated living experience to Savannah. Thanks to the diligent work by our funding partners, The Line will fulfill a much-needed demand for multifamily rentals in this rapidly growing area." Jeffrey Jaeger, Co-Founder and Principal of Standard Communities Standard's primary goal will be to maintain the integrity of the property's original structure while combining the benefits and amenities of a new construction, modern apartment community. The resulting community will include two buildings in total and will fit seamlessly into the old-meets-new vibe of downtown Savannah. The Line will feature a full upscale amenity package, including a terrace level with a pool, sundeck, fitness center, and grill area. The project will also include onsite parking, a clubroom with views of Downtown Savannah and the Savannah River, and resident storage. Savannah boasts a vibrancy that attracts young professionals, relocated families, and tourists. The region's dynamic economy has drawn large corporations, such as Gulfstream, Savannah's largest employer, which employs around 9,800 people at its production facility. Walker & Dunlop is the third largest provider of capital to the U.S. multifamily market, originating $49 billion in transactions and lending over $42 billion for multifamily properties in 2021. With one of the strongest networks in the industry, the firm's 2021 brokered loan originations totaled $30 billion, a 170% increase over 2020. About Walker & Dunlop Walker & Dunlop is one of the largest providers of capital to the commercial real estate industry, enabling real estate owners and operators to bring their visions of communities — where Americans live, work, shop and play — to life. The power of our people, premier brand, and industry-leading technology makes us more insightful and valuable to our clients, providing an unmatched experience every step of the way. With over 1,300 employees across every major U.S. market, Walker & Dunlop has consistently been named one of Fortune's Great Places to Work and is committed to making the commercial real estate industry more inclusive and diverse while creating meaningful social, environmental, and economic change in our communities.

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REAL ESTATE TECHNOLOGY

Innovative Industrial Properties Acquires Massachusetts Property and Enters Into Long-Term Lease with TILT

Innovative Industrial Properties | May 17, 2022

Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced that it closed on the acquisition of a property comprising approximately 104,000 square feet of industrial space in Taunton, Massachusetts. The purchase price for the property was $40.0 million (approximately $384 per square foot), which is fully built out and operational as a regulated cannabis cultivation, processing and dispensing facility. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement for the property with a subsidiary of TILT Holdings Inc. (TILT). TILT was a tenant of the prior owner of the property, and executed a purchase agreement with the prior owner to acquire the property for $13.0 million (approximately $125 per square foot). In addition, during TILT’s tenancy with the prior owner, TILT invested in excess of $27.0 million (approximately $260 per square foot) of its own funds in improvements to the building. IIP’s investment of $40.0 million consists of the original purchase price for the approximately 12-acre site and standard industrial building to the prior owner and a portion of the costs invested in the building by TILT for buildout of the facility, which included the HVAC, electrical, plumbing, cultivation, extraction and processing room buildouts and other building systems infrastructure necessary to support regulated cannabis cultivation and processing. The property consists of approximately 60,000 square feet of cultivation space, 8,000 square feet of production space (including a full commercial kitchen and extraction facility), 2,400 square feet of retail space and mechanical, office, administrative and storage space. The property currently produces a wide variety of form factors, both in-house and with third-party branded partners, including packaged and pre-rolled flower, concentrates, edibles and vaporizers. As the pioneering real estate investment trust (REIT) for the regulated cannabis industry, IIP partners with experienced, regulated cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions. TILT is a vertically integrated enterprise with a portfolio of companies focused on inhalation technology and regulated cannabis operations, and in 2021 generated approximately $203 million in revenues. Jupiter Research LLC, a wholly-owned subsidiary of TILT and leader in the vaporization segment, focuses on hardware design, research, development and manufacturing with customers across the United States, as well as Canada, Israel, Mexico, South America and the European Union. TILT also conducts regulated cannabis operations in Massachusetts, Pennsylvania, Ohio and New York (through its partnership with the Shinnecock Indian Nation). TILT owns a vertically integrated license in Massachusetts, with its Taunton facility dually licensed for both medical and adult-use cultivation, product manufacturing and retail. In addition to the Taunton facility, TILT operates a dispensary in Brockton that is licensed for both medical and adult-use cannabis, and expects regulatory approval soon for an additional medical-use dispensary in the city of Cambridge. TILT’s products recently were awarded first-place gold in “solvent concentrates” and second-place silver in the “edibles category” at the 2022 NECANN Canna Competition in Boston. According to the Massachusetts Cannabis Control Commission, 2021 regulated cannabis sales in Massachusetts were approximately $1.6 billion. Including this property, IIP owns nine properties in Massachusetts, comprising approximately 879,000 rentable square feet (including square footage under redevelopment) and representing a total investment, including commitments to fund future improvements, of approximately $282.7 million (approximately $322 per square foot). As of May 16, 2022, IIP owned 110 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington, representing a total of approximately 8.2 million rentable square feet (including approximately 2.4 million rentable square feet under development / redevelopment). As of May 16, 2022, IIP had committed approximately $2.2 billion across its portfolio, including capital invested to date (excluding transaction costs) and additional capital commitments to fund future construction and improvements at IIP’s properties. These statistics do not include an $18.5 million loan from IIP to a developer for construction of a regulated cannabis cultivation and processing facility in California and up to $55.0 million that may be funded between June 15, 2022 and July 31, 2022 pursuant to IIP’s lease with a tenant at one of IIP’s Pennsylvania properties, as the tenant at that property may not elect to have IIP disburse those funds and pay IIP the corresponding base rent on those funds. About Innovative Industrial Properties Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.

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