Capital Pacific News

$75.5M Shopko Portfolio Closes

Capital Pacific — Wed, 07 Feb 2007 16:07:00 +0000

Capital Pacific has closed the $75.5M Portfolio disposition of 7 Shopko locations totaling over 700,000 square feet. The properties were located in Utah, Idaho, Oregon and Washington. Capital Pacific structured the sale and disposition of the sale-leaseback transaction that successfully closed within the seller’s pricing and timing expectations. The recent acquisition of Shopko, resulting in the company being taken from a publicly traded company to private required Capital Pacific to create a story focusing on the re-positioning and re-branding of the company moving forward.

1031 Exchange Buyer Takes Down $6.3M Suburban Office Building

Capital Pacific — Wed, 07 Feb 2007 16:08:00 +0000

Capital Pacific has closed the Tanasbourne Corporate Park II, a 42,000 SF Class A office building in Hillsboro, OR for $6.3M. The transaction closed within 35 days from start to finish, which included an assumption of an existing life insurance loan. Capital Pacific sourced a private equity 1031 exchange buyer from out of state and closed the transaction during the typically quiet holiday period.

Capital Pacific previously represented the sellers in the disposition of Tanasbourne Corporate Park I in 2004.

Staying Ahead of the Curve

Capital Pacific — Tue, 02 Jan 2007 22:20:00 +0000

With the Federal Reserve holding interest rates steady for the fourth straight meeting, investors are speculating about when or if the nation's central bank will begin to cut rates. With the 10-year Treasury rate hovering around 4.7% and having fluctuated 80 basis points throughout the year (4.40%-5.20%), ending only 20 basis points higher than 12 months ago. What does this mean for the commercial real estate market? Historically, the rise and fall of capitalization rates in correlation with the adjustment of the 10-year can be highly observable as demonstrated in the graph below. With the future uncertainty of the movement around the 10-year, investors will want to stay ahead of the curve and take advantage of historically solid market conditions.

Deals:

January 2006- Washington Green (Party City, Circuit City Anchored) - 6.00%
June 2006- Colonnade Shopping Center (Pet Smart, Office Depot, Best Buy Anchored) -6.67%
October 2006- Meridian Place (Pier 1, Michaels, Sports Authority Anchored) – 6.29%

Within One Week, Capital Pacific has Closed 2 of the 3 Largest Published Retail Transactions in the Pacific NW for 2006

Capital Pacific — Thu, 02 Nov 2006 21:20:00 +0000

Carrying over its 3rd Quarter transaction velocity, Capital Pacific is pleased to announce the closing of two trophy assets in the Pacific NW within the past week. These sales represent 2 of the 3 largest published retail transactions in the Pacific NW for 2006.

Capital Pacific has successfully closed the prestigious Forum Shopping Center within the heated market of Bend, Oregon. This deal represents the largest published retail transaction in Oregon for 2006.

Within the Seattle submarket of Puyallup, Capital Pacific has also closed Meridian Place Shopping Center for approximately $33,000,000. Meridian Place Shopping Center was previously marketed by other firms with no immediate success. Capital Pacific successfully stepped in and maximized pricing for the seller by sourcing a private 1031 exchange buyer.

West Coast Capital hits Illinois: $9 Million Single Tenant Closing

Capital Pacific — Tue, 30 Jan 2007 17:00:00 +0000

Capital Pacific recently closed a $9 M Gordmans store, located within a 30-acre Power Center in Peoria, IL.

What made the deal challenging was a non-credit tenant, unfamiliar to most investors outside of the mid-west. In reality, Gordmans is a low-cost department store with annual sales of over $350 M, and 63 locations in 15 states. It took some grit, but Capital Pacific was able to identify a semi-institutional West Coast buyer.

Recently Sold: High Profile North Bay Office Park

Capital Pacific — Mon, 29 Jan 2007 22:24:00 +0000

Capital Pacific recently represented the buyer and seller in the sale of a Santa Rosa Office Park, which closed for $5.1 M.

The two buildings were well situated across from a newly redeveloped Safeway-anchored shopping center, and enjoyed excellent visibility with 1.5 acres of land on one of the main traffic arteries through Santa Rosa.

The buildings had a history of high occupancy rates; the majority tenant (who now comprises 85% of the square footage) first moved into the building twenty years ago.

Prior to the sale, the building underwent considerable renovation to the roof and exterior to increase the sale value. Each of the two buildings is located on a separate legal parcel with a private parking area, allowing the subsequent owner unusual flexibility.

The Ratewatch

Capital Pacific — Tue, 23 Jan 2007 17:10:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

After a rough week two of ’07, the Treasury bond market settled down in week three. The benchmark 10-year UST did move around – down 2 bps, then up 4, then down 4 and finally, up 2 - but ended at 4.78% on Friday, the same as the previous Friday. LIBOR continued a trend of remaining essentially flat on the short end. Remember when short term rates were the most volatile? Not so any more.

It turned out that the CPI increased by a mere 2.5% in 2006, its best showing since 2003 when it rose only 1.9%. On the other hand, the core CPI - which excludes food and energy and is the index the Fed seems most concerned with - didn’t fare as well: 2.6% in 2006, above the 2.2% in each of the previous two years. This doesn’t strike us as good news on the rate-cutting front (and puzzles us as to why the big yawn last week in the debt markets).

We have a bonus attachment this week entitled, “Capital Markets Presentation,” a review of several years of key interest rates.

Download The RateWatch: A one-page analysis of institutional lending rates

Download the Capital Markets Presentation

The RateWatch

Capital Pacific — Mon, 08 Jan 2007 23:31:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

The short first week of 2007 produced mixed signals on the economy. On Wednesday and Thursday we found out that: (1) construction spending continued to fall; (2) preliminary indications showed December retail sales falling short of expectation after posting strong gains in November; and, (3) Initial Jobless Claims for the last week of December were higher than expected. Then along came Friday with reports that the unemployment rate remained at a low 4.5% rate while December Employment Growth was higher than anticipated.

All these numbers will, of course, be revised later. Nonetheless, all bets came off for a near-term interest rate cut by the Fed and all the equity market indices suffered losses as traders began to fret about the potential for a rate increase. On the other hand, curiously, the Treasury bond market seemed to take it all in stride as the benchmark 10-year UST yield fell 5 bps for the week, closing at 4.64% on Friday.

Download The RateWatch: A one-page analysis of institutional lending rates

Capital Pacific San Francisco Celebrates!

Capital Pacific — Tue, 12 Dec 2006 21:56:00 +0000

Last Friday, Capital Pacific’s San Francisco office celebrated a year of success with a holiday party at the San Francisco Art Institute’s dining room.

After unwinding with some cocktails, our team sat down to delectable meal of Filet Mignon. As tradition dictates, the newest member of the team began the evening’s entertainment with a solo Christmas carol. Not to be outdone, everyone else soon took to the stage.

Thank you to all of our clients and contacts for helping to make 2006 a fantastic year for Capital Pacific San Francisco!

Capital Pacific Closes the Elleven Building

Capital Pacific — Mon, 11 Dec 2006 23:10:00 +0000

Capital Pacific expands its West Coast presence with the recent closing of the ground floor retail component within the Elleven building in downtown Los Angeles. Elleven is part of a three tier mixed-use development in the up and coming South Park neighborhood of LA. The residential component of this mixed-use development is Los Angeles’ first downtown building to be certified by the U.S. Green Building Council (USGBC) for Leadership in Energy and Environmental Design (LEED). Capital Pacific represented Portland, OR based developers in the disposition of the asset.

The RateWatch

Capital Pacific — Mon, 11 Dec 2006 19:35:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

Almost like clockwork, the Treasury market gave back virtually all of last week’s gains in the wake of new employment reports suggesting the economy continues to expand. Job growth was stronger than expected and new unemployment claims were down. On the other hand, ironically, the unemployment rate was up slightly but not nearly enough to offset the otherwise strong employment data.

So, the traders and pundits did a one-eighty from last week’s mantra that the Fed would soon have to decrease rates. After dipping as low as 4.40% during mid-day trading in the middle of the week, the commercial fixed rate mortgage benchmark 10-year Treasury yield closed Friday at 4.55%, up 13 bps from the previous Friday.

Tomorrow’s meeting of the Federal Reserve Board is not expected to produce any action with respect to interest rates. All eyes will be fixed upon the statement the Fed will issue at the close of the meeting for clues about a “bias.” More importantly, consumer price figures for November will be revealed on Friday, which will be viewed as a report card on Fed policy.

Download The RateWatch: A one-page analysis of institutional lending rates

The RateWatch

Capital Pacific — Mon, 27 Nov 2006 22:12:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

In a short week that was supposed to be uneventful, Treasury Bonds resumed their rally and the yield on the 10-year UST fell 5 bps to close at 4.55% on Friday, the lowest week-ending close since late February. Reports on housing and inflation due this week – the former expected to be “soft” and the latter benign - could continue to fuel the rally.

The wise men of Wall Street seem to have given up on the Fed for any near term interest rate decrease. The guessing game now seems to revolve around when the Fed will drop the “bias” from its statements accompanying their meetings (the bias being the statement that, “inflation pressures may necessitate further tightening”). So, we can expect interest rates to continue to bounce around, responding to expectations of nuanced statements, unencumbered by action or any objective reality.

Download The RateWatch: A one-page analysis of institutional lending rates

The Ratewatch

Capital Pacific — Mon, 13 Nov 2006 22:02:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

The on-again, off-again Treasury rally was “on” again last week as the 10-year UST yield fell 13 bps to close Friday at 4.58%. It seems there was a drop in consumer debt in September – the largest single month decrease in over 14 years. This, coupled with a drop in the trade deficit (due mostly to falling oil prices) and lower-than-expected first time jobless claims were proposed as last week’s reasons for the rally. The stock indices were up as well, continuing to break with the historical trend of moving in the opposite direction of the bond markets.

This Wednesday, the minutes of the last Fed meeting will be released. Without a doubt, it will be thoroughly dissected and then retrospectively offered as the reason for whatever movement occurs - up or down - in the Treasury markets this week.

However, we think what is really driving the Treasury yields is old fashioned supply and demand. The cycle begins with cash sitting on the sidelines, concerned about how much air is left in stocks but unwilling to accept Treasury bond yields. As soon as yields begin to rise the cash flows into the debt market, driving prices up (yields down). As yields decline, the flow dries up. And then the cycle repeats.

We know that a lot of the capital in the Treasury market is foreign. Our guess is that yields will continue to move up and down without a strong connection to economic statistics, the equity markets, or Fed attitude or action, as long as we continue to finance our domestic budget deficits with cash from large foreign trade deficits.

Download The RateWatch: A one-page analysis of institutional lending rates

The RateWatch

Capital Pacific — Mon, 30 Oct 2006 23:48:00 +0000

Commentary by Bill Brizendine of Melody Capital Markets

After peaking Tuesday afternoon at 4.85%, the yield on the 10-year Treasury began dropping on Wednesday to close Friday at 4.67%, down 11 bps week-to-week.

While we at the RateWatch avoid predicting interest rates – even their direction – we do think about them constantly, but never saw this one coming. In advance of last week’s FOMC meeting, inflation, growth, housing and unemployment figures were sending mixed signals to the data-driven Fed. These reports seemed to confirm the belief that a reduction in short term rates was much further down the road than the market seemed to think during the summer bond rally (a change in expectation that was behind the early October run-up in 10-year yields). No one expected the Fed to drop rates last week, but most everyone anticipated a stern warning regarding the need for continued vigilance against inflation to accompany the “no change” announcement. Those willing to predict suggested that bond yields would continue to rise through the end of the year.

What we got from the Fed was a “dovish” let’s-have-it-both-ways statement: “inflation pressure [will] continue to moderate over time,” and the economy, “seems likely to expand at a moderate pace.” (Hmmmm . . . sounds like they are declaring a policy victory.)

Meanwhile, expect the fixed rate mortgage markets to remain on edge, buffeted about as traders attempt to divine the impact of every new economic report on the Fed’s mood.

Download The RateWatch: A one-page analysis of institutional lending rates

Power Breakfast Series: Presentation Now Available

Capital Pacific — Tue, 24 Oct 2006 20:39:00 +0000

Last month, Capital Pacific's San Francisco office hosted fifty top clients and contacts for an informative breakfast presentation, as part of our "Power Breakfast Series."

Kathy Holcomb of Pensco Trust company presented a comprehensive overview of self-directed IRAs, including information on how to invest in both traditional and less-traditional permitted investments, including real estate.

We're pleased to make a copy of the presentation available to you.

Please click here to download a copy.