THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, June 5, 1995 TAG: 9506030185
SECTION: BUSINESS WEEKLY PAGE: 05 EDITION: FINAL
LENGTH: Medium: 65 lines
Since the commercial real estate recession gripped the mid-Atlantic region in the early '90s, little has been heard from the mortgage lenders. But their business has been turning around on the strength of refinancing balloon loans as they come due.
Atlantic Mortgage & Investment Co. of Chesapeake, reportedly the largest commercial mortgage banker in private hands in Virginia, said it financed $39.5 million worth of real estate deals in the first quarter, up about 75 percent over a year ago. Financing in the second quarter probably will reach $40 million, Atlantic senior vice president Russ Hanson said.
``Very little new construction has occurred in the last five years,'' Hanson said. ``Historically, 60 percent of the financing is of new construction, but today, for the entire industry, it's probably 90 percent refinancing of existing property.''
Atlantic said recent deals included a $13.3 million loan for Chesapeake Crossing Shopping Center, a 280,000-square-foot project in Chesapeake, and a $2.7 million loan for Lake Shore Plaza Shopping Center, a 51,000-square-foot facility in Virginia Beach.
``The most significant thing we're seeing is that the commercial market across the board, except downtown Norfolk, has been really tightening up,'' Hanson said. ``Occupancy rates have grown and the lease rates have gone up.''
Atlantic invests money belonging to pension funds and insurers, which overcame recent financial woes and began pouring their cash into real estate. The investors are willing to accept thinner margins such as a 7.8 percent rate on a loan that would have fetched as much as 8.75 percent a few years ago, Hanson said.
Willcox & Savage, the prominent Norfolk law firm, has formed a committee to examine buying the next generation of office computers. Managing partner Thomas G. Johnson Jr. figures the hardware and software will cost more than $500,000.
``We tell our people, `If you're with us, we're going to stay state of the art,' '' Johnson said.
First Colony Coffee & Tea Co. of Norfolk entered a sweet agreement. It'll sell the candy of Ghiradelli Chocolate Co. of San Leandro, Calif. Ghiradelli, a premium candy maker started in 1852, will serve First Colony coffee in its stores in Chicago and the California cities of Monterey, Newport Beach and San Francisco.
Ferguson Enterprises Inc., which has its offices scattered across the Peninsula, is building a three-story headquarters in Newport News. The company, owned by Wolseley plc of Britain, sells about $1 billion worth of plumbing supplies each year in 26 states.
Norfolk Southern Corp. stock was touted in Money magazine's June issue. The Norfolk-based railroad was among four undervalued stocks recommended by the magazine's Wall Street Newsletter, which forecast a 12 percent earnings growth.
``With one of the strongest managements in the industry and a high dividend yield, this is a good stock for conservative investors,'' one analyst was quoted saying. by CNB