Jumbo Borrowers Get the Red-Carpet Treatment

My website: www.sandralew.com

As the economy grew in 2014 more affluent home buyers are having the confidence to take on more debt for both primary and secondary homes. The jumbo home market has been driven by new home purchases to a share of 19% of all home mortgages in 2014. The average rate for a 30-year fixed jumbo mortgage has dropped below 4% and was at a historic low of 3.92% on week ending Jan. 30. The refinance of jumbo loans volume has also skyrocket to 71% of total applications which is the highest level since July 2013.

Jumbo Borrowers Get the Red-Carpet Treatment

A growing economy in 2014 meant that affluent home buyers had the confidence to take on debt for both primary residences and second homes.

 

By Anya Martin   Feb. 18, 2015 11:31 a.m. ET

 

It’s awards season in the U.S., when the entertainment industry celebrates its top movies, music and TV shows. If the mortgage industry gave out prizes, jumbo borrowers would be big winners.

Some highlights from 2014:

• For a five-week stretch between August and September, jumbo rates were lower than those for comparable conforming mortgages.

• Many banks and credit unions began offering more jumbo options, some with down payments less than 20% and no private mortgage insurance requirements.

• Competitive housing markets in some areas fueled a rise in first-time home buyers who took out jumbo mortgages.

A growing economy and stock market meant the more affluent had money and confidence to take on debt not just for primary residences but also second homes, says Tom Wind, executive vice president of mortgage operations of Jacksonville, Fla.-based EverBank. “The jumbo share of the market was much more purchase-driven in 2014,” he adds.

In 2014, the jumbo share of the market grew to 19% from 14.4% in 2013, its highest percentage increase since 2002, according to Inside Mortgage Finance, a publication that tracks the industry.

Mortgage lending overall decreased 34.4% year over year, but jumbo lending was only down 12.5%, with a total volume of $238 billion compared with $272 billion in 2013, according to the publication.

Jumbo mortgages have loan amounts higher than the limits for government-backed loans, which are $417,000 in most areas and $625,500 in some high-price places.

The top areas for high-paid professionals were also the places with the highest priced homes, such as the San Francisco Bay Area/Silicon Valley and Los Angeles in California, metropolitan New York City, Washington, D.C., and Boston, says John Schleck, centralized and online sales executive at Bank of America Home Loans.

Tight high-price housing markets also helped fuel a 3% increase last year, from 33% to 36%, in first-time home buyers with nonconforming loans at Bank of America, Mr. Schleck says. The average age of the bank’s jumbo borrower decreased from age 46 in 2013 to 44 in 2014, he adds.

‘Low interest rates are spurring more older affluent Americans to consider a mortgage.’

Wells Fargo Home Mortgage also saw growth in its share of first-time jumbo buyers in Texas and Florida, where there are concentrations of high-price homes, says Brad Blackwell, executive vice president at Wells Fargo Home Mortgage, the nation’s largest jumbo-loan provider. “Texas is the second largest jumbo-mortgage market [after California] because in Dallas, Houston and Austin, there is a lot of jumbo opportunity,” he adds.

New lower-down-payment jumbo products also have played a role in allowing more first-time home buyers to qualify for loans, Mr. Blackwell says. Wells Fargo introduced an 89.9% loan-to-value jumbo product in midsummer 2014, and many other banks and credit unions now offer jumbo loans with down payments less than 20%—an industry standard postrecession. These loans have higher interest rates but don't require private mortgage insurance like their government-backed counterparts.

Still, most jumbo borrowers must meet tight standards. For example, EverBank’s jumbo-client profile remained roughly consistent with 2013—average balance of $802,000, loan-to-value ratio of less than 70% and FICO score of 767 in the fourth quarter of 2014, Mr. Wind says.

Low interest rates are spurring more older affluent Americans to consider a mortgage, says Guy D. Cecala, CEO and publisher of Inside Mortgage Finance. “I am hearing anecdotally about more people in their 60s buying a new home or a second home who are getting sizable mortgages for the tax deduction and to keep more in investments,” he adds.

The average interest rate for a 30-year, fixed-rate jumbo mortgage started at 4.59% in January 2014, but stayed below 4.25% from July through December, according to HSH.com, a real-estate financing website. Adjustable-rate mortgages, popular with jumbo borrowers, also had low monthly average rates, with the five-year ARM staying around 3%, HSH.com data showed.

Fewer jumbo borrowers refinanced in 2014—many had already done so in 2013, and interest rates last year, while low, weren’t low enough to trigger another frenzy, says Mike Fratantoni, chief economist for the Mortgage Bankers Association.

As 2015 began, the average interest rate for a 30-year fixed jumbo mortgage dropped below 4% and was at a historic low of 3.92% on the week ending Jan. 30, according to HSH.com. On the week ending Jan. 9, refinance volume had rocketed to 71% of total applications, its highest level since July 2013, according to the M.B.A. “[Wells Fargo] is seeing a lot of strong refinance application activity, and a lot of that is coming from the jumbo sector,” Mr. Blackwell says.

Source:http://www.wsj.com/articles/jumbo-borrowers-get-the-red-carpet-treatment-1424277069

 

Playa Vista’s Reserve Sells for $316 Million

My website: www.sandralew.com

Lots of positive investments continue taking place in Playa Vista as more businesses are moving to Silicon Beach. Tenants such as TMZ, Microsoft Corp, Sony Playstation, Verizon Communications and Team One have already moved into the Reserve which used to be the old post office distribution center. IMAX and Google are anticipated to move in starting end of this year and over the next 3 to 5 years.

Housing demand and especially the rental market has been climbing steadily as more and more working professionals will need housing in the local area.

Playa Vista’s Reserve Sells for $316 Million

By Cale Ottens Thursday, February 5, 2015 

 
The Reserve, a nearly 400,000-square-foot creative office campus in Playa Vista, was sold last week to Atlanta real estate fund Invesco for $316 million. At about $790 a square foot, the price was among the highest paid for an office property in the region.

The seller, a joint venture of Santa Monica’s Worthe Real Estate Group and San Francisco’s Shorenstein Properties, bought the property for about $46.5 million in 2011, according to county records.

Roughly $30 million was invested to transform the property – a former U.S. Post Office distribution center built in 1971 – into a creative office campus, boasting sand volleyball courts, a dog park, car wash and a fitness center, among other amenities.

Since the extensive renovation, the office park has been a hit. The developers attracted tenants like TMZ, Microsoft Corp., Sony Playstation, Verizon Communications and Team One, an advertising agency.

Representatives of Worthe, Shorenstein and Invesco could not be reached for comment.

Source: http://labusinessjournal.com/news/2015/feb/05/playa-vistas-reserve-sells-316-million/

My website: www.sandralew.com

Playa Vista is the new high tech cluster of the Westside. It's proximity to LAX, the beach, easy access to freeways, and vast amounts of open space are all rare finds thus making it a boom for high tech companies anticipating growth in the future. Meanwhile, its creating a vibrant community of young ambitious professionals. Centering tech's biggest players in one Southland spot is bringing a cohesion to the L.A. tech scene that entrepreneurs had long worried wouldn't be attainable in the sprawling metropolis. Definitely a benefit to Playa Vista and its surrounding areas.

Playa Vista turning into Silicon Valley South as tech firms move in

 

Yahoo has signed a long-term lease for about 130,000 square feet at the new Collective campus, which is still under construction in Playa Vista. (Marcus Yam / Los Angeles Times)

By Andrea Chang and Peter Jamison ; January 17, 2015

First came Facebook and YouTube. Then Microsoft moved in. Google is on its way. And now Yahoo, too, is joining the high-tech cluster that has sprouted in Playa Vista.

The burgeoning Westside neighborhood is fast becoming the Southern California hub of Silicon Valley, with a growing number of tech companies choosing the relatively undeveloped area as their gateway to the region's entertainment and media offerings. As digital entertainment takes off, tech companies say close ties with Hollywood are more important than ever.

Centering tech's biggest players in one Southland spot is bringing a cohesion to the L.A. tech scene that entrepreneurs had long worried wouldn't be attainable in the sprawling metropolis.



It's also fueling rapid change to the self-contained neighborhood of more than 6,500 residents. Already, new housing and office complexes, restaurants and co-working spaces have opened, and more developments — including an 11-acre retail, residential and office center — are underway.

Tech firms point to a number of reasons for opening outposts in Playa Vista. At first, proximity played a major role: The neighborhood is close to major freeways, the beach and Los Angeles International Airport. Moreover, there were vast expanses of land yet to be developed, a rarity in Southern California and a boon for enormous tech companies anticipating future workforce growth.

Now there's something more. The rise of Playa Vista tech has created a vibrant community of young, ambitious employees, and that's attracting related firms and organizations to the fold. Along a mile-and-a-half stretch, you can find media companies, ad agencies, university-affiliated institutes and start-ups working alongside the established tech juggernauts.

"There's a herd mentality to the tech industry, so when one guy does something, everyone else follows," said Michael Pachter, a tech analyst at Wedbush Securities in Los Angeles.
When YouTube began looking for a facility in L.A., it struggled to find a complex large enough — until discovering Playa Vista, said Liam Collins, head of YouTube Space L.A., which opened in late 2012.

The YouTube hangar has quickly become a gathering place for the business community there. It began hosting regular happy hours two years ago, with some 25 people showing up. Now 400 people swing by "and many are just walking over," Collins said.

"We found what we needed logistically in this neighborhood, and now we hope to be a catalyst for more like-minded companies and people to come," he said. "Our model is really built on the idea that bringing creative people together will enhance the work product of everyone involved. Having a creative, vibrant community is critical for our success, and it's heartening to see that grow in the last couple of years."



Tech companies and their typically well-paid, highly educated employees are plum tenants for the city and for commercial real estate brokers, who have been pulling out all the stops to get leases signed.

Los Angeles Mayor Eric Garcetti heavily wooed Yahoo, which announced Thursday that it would move its Santa Monica operations to Playa Vista. He has been aggressively pushing for the city to become a tech-entertainment powerhouse and has been enticing companies over the Santa Monica border with attractive perks.

The plan to lure Yahoo began last year, when the Sunnyvale, Calif., Internet company started looking beyond Santa Monica, where it had been for a decade, for a bigger office complex.

Yahoo considered and passed over several other potential sites, including the Bloc development in downtown L.A. and the Pacific Design Center in West Hollywood, according to city officials familiar with the process.

In November, Garcetti sent a letter to Yahoo Chief Executive Marissa Mayer offering a "menu of incentives and resources," including a three-year business tax exemption and "white glove service" to ensure that the build-out of the campus would proceed quickly and that the company's dealings with the city would be fast-tracked.

"The consolidation of your employees into one singular campus in the city would help elevate L.A. as [a] tech leader, ensuring that we're able to retain quality engineers and attract and grow local funding sources," Garcetti wrote in the Nov. 20 letter, obtained by The Times. "Personally, I view this move as paramount to our continued success."

The pitch worked. Yahoo signed a long-term lease for about 130,000 square feet at the soon-to-open Collective campus in Playa Vista. The move, expected this fall, will bring at least 400 jobs from Yahoo's current location, with space to accommodate growth. Internet companies generally set aside 200 square feet per employee, so Yahoo's Playa Vista presence could expand to 650 employees.

Yahoo Chief Financial Officer Ken Goldman said the new office better matched the company's space requirements and would enable it to be closer to the "ambience of this area" and its talent pool.

The deal was a blow to Santa Monica, which had been poised to be the region's tech epicenter. But entrepreneurs there have long complained of traffic congestion, high office rents and cramped quarters with little to no room for growth.

"Things have gotten a little too cozy at Riot HQ in Santa Monica," the video games company wrote in a blog post announcing that it would relocate to West L.A. this spring. "As we've grown, we've squeezed ourselves into every cranny and we've spread across multiple floors and buildings."

The short migration from Santa Monica into L.A. has led to a rivalry between the two cities, with each jostling to become the premiere place for tech in the Southland.

Los Angeles "is just taking our overflow," Santa Monica Mayor Kevin McKeown said. "The excitement is in Santa Monica."

McKeown is confident that the Colorado Center space vacated by Yahoo will soon be grabbed by another company, and noted that the city was willing to work with businesses seeking to expand. Still, he acknowledged that Santa Monica doesn't have the space like Playa Vista to accommodate large concentrations of workers.

Garcetti, meanwhile, said he was tired of watching his city lose out to its next-door neighbors.
"L.A. city will get its fair share," he said. "That absolutely is important to me."

Whether it's L.A. or Santa Monica, the region's tech sector is thriving.

The Los Angeles County Economic Development Corp. recently released a report showing that the area has more high-tech jobs (368,600) than Boston-Cambridge, Santa Clara County and New York City. The direct high-tech workforce generated $32 billion in wages in 2013, accounting for 16.8% of all wages paid in L.A. County, the report said.

As more start-ups have emerged in the area, venture capitalists have followed.

In the Los Angeles metro region, the total amount of equity financings for venture-backed companies jumped sharply last year, up 44% to $2.3 billion across 146 deals, according to Dow Jones VentureSource.

An ever-expanding tech force in Playa Vista — Google last month spent nearly $120 million on 12 acres that it will develop in the coming years — will further bolster the region's tech environment and the economy overall, said Wedbush's Pachter.

Yahoo's move to L.A. from Santa Monica is hardly a win for the region's economy

"Anything that diversifies the economy is great for L.A., anything that creates high-paying jobs is great for L.A. and anything that hires educated people is great for L.A."

Source: http://www.latimes.com/business/la-fi-silicon-valley-south-20150118-story.html#page=1

 

My website: www.sandralew.com

Yahoo is coming to Playa Vista with their new operations expanding to about 130,000 square feet. They are moving 400 employees from its current Santa Monica location to accommodate their planned growth and collaboration needs. They will be joining many other high tech companies in this booming Westside neighborhood. Google, Facebook, Microsoft, YouTube and Belkin International are already contributing to making this area a real hub of Silicon Beach.

Yahoo to move Santa Monica operations to booming tech hub Playa Vista

 

Yahoo Inc., the Sunnyvale, Calif.-based Internet company, is moving its Santa Monica operations to Playa Vista, joining other major tech companies that have opened offices in the booming Westside neighborhood. (Damian Dovarganes / Associated Press)

By Andrea Chang ; January 15, 2015

Yahoo Inc. is moving its Santa Monica operations to Playa Vista, joining the droves of major tech companies that have opened offices in the booming Westside neighborhood.

The Sunnyvale, Calif., Internet company signed a long-term lease for about 130,000 square feet at the new Collective campus in Playa Vista. The move will bring at least 400 jobs from its current location, with space to accommodate growth.

"We worked hard to identify the right office situation for Yahoo in Southern California to better match our space and collaboration needs," Yahoo Chief Financial Officer Ken Goldman said in a statement. "While we have always had a presence in Southern California, working out of the city of Los Angeles is a priority for us now more than ever."

Goldman said the company chose Playa Vista because of its "access to talent" as well as the culture of the area. The move, which had been expected, is scheduled to happen in the fall; a Yahoo spokeswoman said the company would keep its current office space in Burbank.

Yahoo is just the latest company to join the burgeoning technology hub in Playa Vista.

Google last month spent nearly $120 million on 12 vacant acres in Playa Vista next to a historic hangar where aviator Howard Hughes built his famous "Spruce Goose" airplane. The land is zoned for nearly 900,000 square feet of commercial space that could house offices or studios, vastly more room than Google now occupies in a handful of buildings in Los Angeles County.

Google is also expected to lease the Hughes hangar, which was built in 1943. The 319,000-square-foot building has recently housed soundstages for movie and television production.

Microsoft Corp. opened a roughly 20,000-square-foot space in Playa Vista in 2013 to house 130 employees who had previously been in downtown L.A. Facebook Inc. has operations nearby. The neighborhood boasts the headquarters of online advertising platform Rubicon Project, consumer electronics and accessories maker Belkin International and ICANN, the nonprofit organization responsible for assigning Internet domains.

Playa Vista is also home to USC's Institute for Creative Technologies, which has attracted several top virtual reality researchers. The institute is where Oculus Rift founder Palmer Luckey once worked as a designer.

Los Angeles Mayor Eric Garcetti has been aggressively pushing to make L.A. a tech power player. His Office of Economic Development worked closely with Yahoo to encourage the company to make the move.

"I'm proud that Yahoo is moving to Los Angeles and sending a strong message to the business community that our city is where the next big thing is going to be," Garcetti said. "This move proves that L.A. is accelerating as a center of technology and entertainment."
Techies and L.A. City Council members say they hope the move will spur further tech growth in the area.

"Playa Vista is a perfect home for smart, innovative tech firms, and Yahoo will add to a growing energy and spirit as Playa Vista becomes the real hub of Silicon Beach," said Councilman Mike Bonin, who represents Playa Vista.

Yahoo has media and tech operations in Southern California and has been at its Santa Monica space since 2005, when it signed a 10-year lease agreement at the Colorado Center. The complex was built in phases beginning in the early 1980s.

The Collective at Playa Vista, scheduled to open July 1, is a 204,422-square-foot, five-building office campus on nearly nine acres. Yahoo will occupy roughly two-thirds of the property. Now that the campus has an anchor tenant, it will begin to fill the rest of the space.

Source: http://www.latimes.com/business/la-fi-yahoo-playa-vista-20150116-story.html