$196M in Funding for Affordable Housing Projects in LA County
$196M in Funding for Affordable Housing Projects in LA County
Gov. Gavin Newsom announced this week that $825M in funding will go towards new affordable housing developments across the state, with $196M of that total set to go towards 27 projects across LA City and LACounty, equating to roughly 2500 new units.
Read more here:
Capital Markets Update
A message from Greg Kavoklis, live from the Mortgage Bankers Association Conference in San Diego…
“Ending a huge week after two full days of back-to-back meetings with our trusted lender partners. If anything, I’d label it as sweet and sour. Sweet for the lenders who are well capitalized entering 2023 and who are able to commit new capital to financing CRE (with the exception of office). And sour for the lenders who were the lowest cost providers last year, but are now stuck with those loans on their balance sheet. It is hard to find buyers (to free up liquidity) for notes yielding 3.5% - 4% when you can make new loans today at 5.5% - 6% interest rates.
These banks will not sell their notes at a loss, and I don’t see borrowers paying off their loans early since market rates today are so much higher than 2022 – what a liquidity crunch!
Moving on from the lender landscape, the most important data point released this week was the CPI (inflation) print on Tuesday. The sticky report missed expectations and bond yields spiked. Not good news, right when we all started seeing the light at the end of the tunnel. The fact remains that our Feds fund rate is 4.75% and YoY inflation still sits at ~6.5%.
The textbook play from the Fed will be to keep raising the Fed funds rate to cool inflation off. This sets up another 25 bps hike in March, and most likely 25 bps more in April. Rates will be higher for longer, and any hope we had for rate cuts this year will most likely be taken off the table.”
Financing needs? Reach out to me or Greg Kavoklis, our Capital Markets Director, to set up a 5-minute call: gregory.kavoklis@matthews.com | 818-206-5835.
Weekly Market Activity – WeHo, Beverly Grove, Pico Robertson, Fairfax, Mid-City
90019, 90035, 90036, 90046, 90048, 90069
2/17/23, Last 7 Days
New Listings:
1. 1074-78 S Cloverdale Ave [90019] – 6 Units for $2.55M, 4% Cap, $443/sf, 17.6 GRM (1947)
2. 834 S Orange Grove Ave [90036] – 8 Units for $3M, $373/sf, 17 GRM, 3.41% Cap (1929)
3. 1400 S St Andrews Pl [90019] – 4 Units for $1.7M, $240/sf, 1 Vacant (1917)
4. 1227-33 N Fairfax Ave [90046] – 22 Units, Unpriced, 38 Unit Dev Site, 21K Sqft Zoned R4 (1924)
5. 1123 S Citrus Ave [90019] – 4 Units for $1.9M, $382/sf, All 2+1 Units, 18.84 GRM (1928)
6. 1211 S Crescent Heights Blvd [90035] – 2 Units for $1.43M, $406/sf, 22.83 GRM, 3+2 Units (1934)
New Closings:
1. N/A
Please reach out to me directly with any questions, and as always, thank you for reading.
