http://www.moodynational.com/news/ Moody National Companies News en adam@image202.com Copyright 2008 2008-03-17T16:48:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_approximately_24_acres_in_houstons_boomin/ http://www.moodynational.com/news/moody_national_companies_acquires_approximately_24_acres_in_houstons_boomin/ [Houston] – Moody National Companies acquired approximately 2.4 acres in the Westchase Submarket at the corner of Beltway 8 and Westpark Drive. Moody National Companies will develop a 142-room Hyatt Place Hotel, along with close to 6,500 square feet of hotel meeting space, on the site. The seller, Simmons Vedder will tear down the currently-existing Tinseltown Theater in order to develop two office buildings immediately north of the subject site. Moody National Companies was attracted to the site because of its close proximity to several of the most-profitable energy firms in the world. Also, rapid growth along I-10 West and Beltway 8 is creating technical pressure that is pushing Houston's center westward along Westchase and the I-10 corridor. Alex Sims, Acquisitions Associate with Moody National Companies, sourced the land acquisition. Stan Creech of Stan Creech Properties represented the seller. This transaction represents Moody National Companies' second land acquisition in West Houston over the past six months. Moody National Companies is actively sourcing additional raw land near high concentrations of office buildings within the East Coast, West Coast and Sunbelt. 2008-03-17T16:48:00-06:00 http://www.moodynational.com/news/moody_national_companies_announces_orange_county_expansion/ http://www.moodynational.com/news/moody_national_companies_announces_orange_county_expansion/ Moody National Companies will open an Orange County office in Irvine, California, in September 2007. The office space will be located at Maine and McArthur, in the heart of the Irvine CBD. Moody was the second-largest producing sponsor in the TIC industry for 2006, and a California office was essential to maintain their interaction with California representatives and investors, according to CEO Brett Moody. Mary Smith will join the Moody Orange County Office as General Counsel of Securities after serving as an attorney for Luce, Forward, Hamilton & Scripps LLP, where she acted as counsel on over $1 billion of tenant in common acquisitions while working with preeminent industry attorney Darryl Steinhause. Mary Smith holds a JD from the University of California, Berkley. Brett Moody said, "Mary Smith worked under a TIC industry leader in Darryl Steinhause, so the opportunity to acquire someone with that level of training was too good to pass up." Moody is headquartered in Houston and has satellite offices located in Austin, Dallas, and Orange County. Moody expects to hire additional industry talent to join its Orange County operation. 2007-10-01T06:44:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_19_hotel_portfolio/ http://www.moodynational.com/news/moody_national_companies_acquires_19_hotel_portfolio/ Moody National Companies acquired a national 19-hotel portfolio comprising 2,556 Marriott rooms primarily on the East Coast. Moody National Mortgage Corporation sourced the financing, the bulk of which came from Citibank. Mark Elliott, with Hodges Ward Elliott, represented the seller, Concord Hospitality Enterprises Company. HVS provided third party valuation services. With this acquisition, Moody National Companies has 68 hotels in its portfolio. Moody National Companies is actively sourcing additional select-service hospitality opportunities in the East Coast, West Coast and Sunbelt, noting strong technical pressures and high replacement costs. Moody National Companies declined to disclose the purchase price for the subject transaction. 2007-09-05T06:46:00-06:00 http://www.moodynational.com/news/moody_national_companies_completes_nw_houston_medical_office_development/ http://www.moodynational.com/news/moody_national_companies_completes_nw_houston_medical_office_development/ Moody National Companies completed the development of TOPS Comprehensive Breast Center - a diagnostic center serving breast cancer patients. The medical office building development was equipped with state-of-the-art technological equipment. Brett Moody, Chairman and CEO, said that Moody National is bullish on medical office buildings both from an economic and humanitarian perspective. Moody noted that demographics portend growth in demand for medical office space, while this space also provides doctors with an opportunity to save lives. TOPS is located at 17080 Red Oak Dr, in the rapidly-growing area of far Northwest Houston. Moody National Companies retained management of the project. Moody now manages over one million square feet of office space in the Houston area. Troy Malish, Vice President of Development with Moody National Companies, was General Contractor for the development. Mr. Malish brought over 10 years of sophisticated medical office development to the project. Moody National Companies is actively sourcing more medical office building development opportunities, especially within suburbs along the East Coast, West Coast and Sunbelt. 2007-07-24T06:43:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_sugarland_site_for_build_to_suit_pro_bono/ http://www.moodynational.com/news/moody_national_companies_acquires_sugarland_site_for_build_to_suit_pro_bono/ Moody National Companies acquired its fourth Houston MSA site this year with the purchase of 6.282 acres located in the Sugar Land Business Park. Moody National Companies plans to develop 12 office condominiums on the site. The development plan originated as a pro bono build-to-suit for Houston Center for Christian Counseling - a marriage and family counseling practice with offices in Sugarland and Katy. As Moody National Companies underwrote the development, Moody saw an opportunity to profit by developing additional office condos in order to offset the cost of developing the Houston Center for Christian Counseling pro bono. Alex Sims, Acquisition Associate with Moody National Companies, sourced the commercial land acquisition, while Steve Darnall of Fuller Realty represented the seller. Moody National Companies finds the Sugarland site attractive for its strong demographics as well combined with the decreasing availability of raw land in the popular business park. The forthcoming Moody office condos will benefit from the synergy of being located near several new medical office buildings as well as the nearby Granite office development. Moody National Companies is actively sourcing more development opportunities in the East Coast, West Coast and Sunbelt; and the firm is also interested in pursuing additional charity development opportunities in the future. 2007-07-18T06:41:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_approximately_15_acres_in_the_texas_medic/ http://www.moodynational.com/news/moody_national_companies_acquires_approximately_15_acres_in_the_texas_medic/ Moody National Companies acquired 7807 Kirby, approximately 1.5 acres in the Texas Medical Center Submarket near the Northeast Corner of Kirby Dr and Main St. Moody National Companies has plans to develop a 200-room Hilton Garden Inn on the site, which is located less than a mile from 7575 Kirby Condominiums and Residence Inn at Moody Plaza, both of which are Moody projects. Moody National Companies was attracted to 7807 Kirby because of its location proximity to the largest medical center in the world, which is projected to grow by 25% percent over the next five years. Moody anticipates the block looking revitalized as industry leaders Fidelis and Simmons Vedder develop projects in immediate vicinity of the subject site. Alex Sims, Acquisitions Associate with Moody National Companies, sourced the land acquisition for Moody; while Ellis Antone represented the Seller. This transaction represents Moody National Companies' fourth land acquisition in the Texas medical Center. Moody is actively sourcing additional raw land within major medical centers and high concentrations of office buildings within the East Coast, West Coast and Sunbelt. Moody National Companies declined to disclose the purchase price. 2007-06-27T06:47:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_third_texas_medical_center_site/ http://www.moodynational.com/news/moody_national_companies_acquires_third_texas_medical_center_site/ Moody National Companies acquired its third Texas Medical Center site with approximately 1.25 acres of land at the southwest corner of Woodbury and Cambridge, within 100 feet of both the Michael DeBakey VA Hospital and Baylor's forthcoming 2.7 Million square feet hospital. Moody National Companies plans to develop a high-rise multifamily property on the site. Alex Sims, Acquisitions Associate with Moody National Companies, sourced the commercial land acquisition in an off-market transaction. Moody National Companies was attracted to the Texas Medical Center site because of the technical pressure on the submarket's housing due to its proximity within an inelastic submarket containing one of the densest concentrations of intellectual capital in the world. With several new Texas Medical Center hospitals in the pipeline, the forthcoming Cambridge multifamily development will provide medical professionals with immediate access to their work establishments. Moody National Companies is actively sourcing additional development opportunities in the East Coast, West Coast and Sunbelt, noting strong demographic pressures and rising replacement costs. Moody National Companies declined to disclose the purchase price for the Texas Medical Center site. 2007-04-17T06:40:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_trophy_office_in_the_central_core_of_hous/ http://www.moodynational.com/news/moody_national_companies_acquires_trophy_office_in_the_central_core_of_hous/ Moody National Companies acquired its fifth Houston office building in recent months with 2100 West Loop South, a 16-story, 165,399 Square Foot asset located in the central core of the prestigious Galleria/Uptown submarket. Kyle Bebee, Director of Real Estate Investment with Moody National Companies, sourced the office acquisition. Dan Miller, Senior Vice President with Trammell Crow, represented the seller, a private equity partnership. Moody National Companies was attracted to 2100 West Loop South because its irreplaceable Galleria Area location and below-market rents provide opportunity for revenue growth. 2100 West Loop South is 90% occupied, and major tenants include EMS Pipeline Services, Telwest Network Services, Layton Energy, and Imedia It. EMS Pipeline Services provides pipeline maintenance to the energy industry. Telwest Network Services is a Seattle-based telecommunications company. Layton Energy is an upstream energy exploration and production firm. Imedia It provides interactive media and marketing services. Located in the central core of the Houston's Uptown District, 2100 West Loop South is in close proximity to 5 Million square feet of retail space, 27.7 Million square feet of office space (approximately equivalent to downtown Los Angeles), as well as Loop 6-10, Interstate 10, and U.S. Highway 59. According to Trammell Crow, the Galleria submarket has experienced nine consecutive quarters of positive office absorption, with a Class A office absorption of 295,592 during the fourth quarter of 2006. Moody's Investor Services' quarterly Red-Yellow-Green CMBS ratings report indicated that demand for Houston office space maintained pace with supply for each quarter of 2006. Moody National Companies is actively sourcing additional Class A office opportunities in the East Coast, West Coast, and Sunbelt, due to strong technical pressures and high replacement costs for the asset class. Moody National Companies declined to disclose the purchase price for 2100 West Loop South. 2007-02-21T06:39:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_fourth_houston_metro_class_a_office/ http://www.moodynational.com/news/moody_national_companies_acquires_fourth_houston_metro_class_a_office/ Moody National Companies acquired its fourth Class A Houston office building in recent months with Weatherford Plaza, a 216,000 Square Foot asset located in the North Belt/Greenspoint submarket. Teddy Dykoski, Acquisitions Associate with Moody National Companies, sourced the office acquisition. Ken Page, Executive Director with Cushman & Wakefield, represented the seller, KBS Realty Advisors of Orange County, CA. Moody National Companies was attracted to Weatherford Plaza because it is a well-maintained asset with strong tenancy and opportunity for rent increase. Weatherford International, the world's fourth largest diversified upstream oilfield service company, occupies 39% of the building with a long-term lease. Other major tenants include FMC Technologies and Kraton Polymers US, both of whom supply services to the energy sector. Located at 15710 JFK Boulevard, Weatherford Plaza is in close proximity to Bush Intercontinental Airport, Highway 59, I-45, Beltway 8 and the Hardy Toll Road. According to Cushman & Wakefield's Third Quarter 2006 Office Submarket Review, "North Belt has the lowest Class A direct vacancy rate in the Houston area at 1.9% with a direct rental rate of $21.72," making it one of the most vibrant office submarkets in Houston. Mr. Dykoski indicated that Moody National Companies is actively sourcing additional Class A office opportunities in the East Coast, West Coast and Sunbelt, noting strong technical pressures and high replacement costs. Moody National Companies declined to disclose the purchase price for Weatherford Plaza. 2007-02-09T06:37:00-06:00 http://www.moodynational.com/news/moody_national_companies_acquires_124_acres_in_houston_energy_corridor/ http://www.moodynational.com/news/moody_national_companies_acquires_124_acres_in_houston_energy_corridor/ Moody National Companies acquired 12.4 acres in the Energy Corridor/Park 10 Submarket at the Northwest Corner of I-10 and Highway 6. John Tobin, with Stan Creech Properties, represented the seller, Granite Properties of Dallas, TX. Granite Properties developed the first phase of Granite Park 10, which is occupied by Accenture. Alex Sims, Acquisitions Associate with Moody National Companies, sourced the land acquisition. Moody National Companies will develop phases two and three of Granite Park 10 on the 12.4 acres. Troy Malish, Vice President of Development with Moody National Companies, declined to comment on specific plans for these two development phases. Industry speculation suggests a mixture of hospitality, office and restaurants. Moody National Companies was attracted to the Granite Park 10 site because of its immediate proximity to several of the most-profitable energy firms in the world. Also, rapid growth along I-10 West is creating technical pressure that is pushing Houston's center westward along the I-10 corridor. This transaction represents Moody National Companies' second acquisition in the Energy Corridor over the past six months. Mr. Sims noted that Moody National Companies is actively sourcing additional raw land near high concentrations of office buildings within the East Coast, West Coast and Sunbelt. Moody National Companies declined to disclose the purchase price. 2007-02-01T06:34:01-06:00 http://www.moodynational.com/news/sponsor_upclose_moody_national_companies/ http://www.moodynational.com/news/sponsor_upclose_moody_national_companies/ In November of 2003 Brett C. Moody, chairman and CEO of Moody National Companies., was heading several real estate investment funds that delivered their investors 15%, even 18% returns. But he says he recognized changes in the acquisitions market that made that not likely to continue. It was time for a change on the equity side of Moody's multiple business line real estate investment company, which he started in 1996 with Moody National Mortgage Corp. "We can no longer buy assets that return a 15% to 18% cash-on-cash current pay," Moody recalls saying. "We were going to need to pursue a different capitalization for our real estate acquisitions, either partnering with a Wall Street opportunity fund or pursuing capital in the 1031 market." The 1031 market it would be. However, it would take slightly more than a year before Moody would actually get to its first TIC transaction (the investments are offered through another of his affiliated entities, Moody National Realty Co.). He and his staff spent about six months putting together a platform that would bring investments to the market as a strictly real estate product. But by the summer of 2004, Moody recalls, "I began to become more knowledgeable about the risk and the process, and deemed it necessary to be a security." He adds, "I think that for retirees investing their retirement money in properties that they are unfamiliar with, in states and markets that they are unfamiliar with, Reg D disclosures are more appropriate." So Moody went back to the drawing board, spending another half-year or so gearing up for a securitized platform. The company's first TIC transaction was a portfolio of five hospitality assets in the Philadelphia area, which it put under contract in January 2005. It closed out the approximately $100 million deal that May. Since then it has been a very active sponsor, having done 22 offerings with a total value of $486.2 million. A key reason Moody attributes to having done so much TIC business in that time period is the complimentary expertise of the other four Moody companies (more details of which are below), particularly its original mortgage banking firm entity. "Having financed real estate owners and developers in 42 states gives us a breadth of markets to draw from with existing relationships," says Moody. "Therefore, we have the ability to access properties prior to being publicly marketed, and that is extremely important to our acquisition criteria. We do not like to be the highest bidder on a property that has been marketed nationally. As a matter of fact, we just say no." Current TIC/DST Portfolio: 22 investments totaling $486.2 million, including $170.3 million of investor equity. 2005 Equity Raised/Total Property Value of TIC/DST Investments: Nearly $193.73 million of office and hospitality assets, including $68.76 million of equity. 2006 Equity/Total Property Value Projections: The company expects to raise $178.8 million of equity for $510.5 million of total property value. TIC/DST Properties Gone Full Cycle: None. Property Type Focus: At today's prices, Moody is most bullish on hospitality and office assets for TIC transactions. He cites industry market reports of the past two or so years that indicated the hospitality sector will be the only one of the five major product types to deliver double digit returns for a 10-year period. "We think that the hospitality space has the most market inefficiencies that exist between supply and demand," says Moody. What he won't buy as far as hotel properties are concerned, though, are "destination properties" prone to a single event like an oil spill or a shark attack, says Moody,or those tied to a city's ability to attract convention business. As for office, he adds, "We really like the fact that with well located office right now, the cost of replacement creates an economical barrier to entry." Current dynamics in the multifamily and retail sectors make them unable to meet both of the company's two goals for TIC transactions, says Moody: asset preservation and cash flow stability. Regional Focus: Moody concentrates on buying class A assets in major metro-markets. The East and West coasts and the Sunbelt region are Moody's focus. It looks for markets that have strong population growth, expanding federal and/or state employment bases that also have major universities. Drilling down to the submarket level, the sponsor looks for properties in areas with high concentrations of office buildings and those located near the entrances of universities or within medical centers. Recent Transactions: One example of an office property transaction is the US headquarters of Philips Lighting Co.,a 200,000-sf building in Somerset, NJ. The credit tenant had 16 years of a 20-year triple-net lease remaining at the time the deal, structured as a DST, closed. In the hospitality sector, Moody's sold a three-property master leased portfolio of Marriott-branded hotel properties located in metro Atlanta markets. Securities or Real Estate: Securities. Master Lease or Property Management Structure: In addition to structuring one transaction as a Delaware Statutory Trust, Moody has experience with both master lease and property management agreement structures. The latter it used with a property that had only three public company tenants, two of which were credit tenants, and each with long-term leases. In that kind of scenario, says Moody, a master lease was not necessary. But for the majority of transactions he says, and generally when multi-tenanted properties are involved, the master lease is the way to go. "The reason is, we believe that a sponsor stands behind the real estate they bring to the marketplace," he says. "There are only two ways to baby the cash flow, and when you put a 7% or an 8% in a PPM, the investors count on that 7% or 8%. They're counting on the proformas. And real estate does not increase every year in cash flow, property over property...They go up, they go down, they have good months and bad months with tenant rollover." Moody continues by saying that for any sponsor with a master lease program, transparency holds great importance, adding that registered reps and broker-dealers should be familiar with more than just a particular offering at hand. "We think it's important that they are made aware of every transaction that the sponsor has structured as a master lease, so that they can understand the financial viability of all their assets," he says. "Then they can see if the company is solvent, or if the company is feeding its past transactions." His company provides that information, he says, in the spirit that a sponsor should do what's best for the investor,not best for the sponsor. TIC vs. DST: Moody has used the DST structure once, when it fit the single-tenant, triple-net leased Philips Lighting transaction. In the case of most of its deals, though, multi-tenant properties lend themselves to the master lease and the TIC structure, Moody says. Debt Financing Typically Used: Differs, but typically 10-year loans. Financial Capability & Closings: Moody has in-house capabilities for the financing of acquisitions. It prefers to buy property first, allowing investors flexibility on the timing of closings. Other relevant entities: Moody National Cos. is comprised of five entities. In addition to the TIC sponsor, they are: Moody National Development Co., which currently has 1,004 multifamily units, a condominium tower and three hotels under development and has completed such projects in the past as the Red Oaks Medical Center in Houston; Moody National Equity Funds, which has led a series of partnerships and investment funds; Moody National Management Co., which manages 3,706 apartments, 3,117 hotel rooms and 550,934 sf of office space and Moody National Mortgage Corp., which has placed about $2 billion of debt, equity and structured financing. 2006-09-25T20:40:00-06:00