Finance Investment Banking
Economy Watch: Capmark Files for Bankruptcy
Oct 26, 2009
Major commercial real estate lender Capmark Financial Group Inc. and
various subsidiaries have filed for Chapter 11 bankruptcy, which last
month the company had warned was coming. The move will allow the
Capmark to reorganize and, very likely, delay selling off some of its
$20 billion-plus in assets at less-than-desirable prices.
Economy Watch - Homebuyer Tax Credit Sees Some Cheating
Oct 23, 2009
In testimony reminiscent of dogs getting credit-card applications
approved back during the mid-2000s credit bubble, a Treasury Department
inspector told Congress that kids as young as four years old have been
able to receive $8,000 first-time homebuyer tax credits. “Some key
controls were missing to prevent an individual from erroneously or
fraudulently claiming the credit,” J. Russell George told the House
Ways and Means Committee’s oversight panel on Thursday.
Economy Watch: Beige Book Describes Modest Recovery
Oct 22, 2009
The Federal Reserve’s most recent Summary of Commentary on Current Economic Conditions,better known as the Beige Book, wasn’t exactly cheerful about the stateof the U.S. economy toward the end of annus horribilis 2009. But itwasn’t precisely pessimistic either.
Economy Watch: No Rush to Build More Houses
Oct 21, 2009
U.S. housing starts posted a gain in September, but only a modest one,pointing to a still-modest rate of recovery for the overall economy.According to the U.S. Department of Commerce, the rate of new homestarted inched upward by 0.5 percent during the month to a seasonally adjustedrate of about 590,000 units. Ever-optimistic economists, it seems, wereexpecting more.
Economy Watch: More Medicine for Ill Housing Market
Oct 20, 2009
The U.S. housing market might not be quite as deathly ill as it was a
year ago, but no one is suggesting--to stretch the health
metaphor--that it will get up and run a marathon any time soon. In
fact, the industry is wheezing and gasping a little at the thought of
the looming expiration of the $8,000 first-timer tax credit, so plans
have been hatched in Congress to keep the credit in place.
Economy Watch - Foreclosures Trend Upward in Usual Places
Oct 16, 2009
More than 925,000 U.S. homeowners received a foreclosure notice of some
kind -- a default notice, scheduled auction or bank repossession --
during the third quarter of 2009, according to RealtyTrac, a figure
that represents a 5 percent increase over the second quarter and a 23
percent increase over 3Q08. One in every 136 U.S. housing units
received a foreclosure filing during the quarter, which was the highest
quarterly foreclosure rate since the company began issuing its report
in the first quarter of 2005 -- though admittedly, that was during the
run up to the bubble peak.
Economy Watch - Feds to Publish CRE Loan Modification Guidelines Soon
Oct 15, 2009
The heads of the Federal Deposit Insurance Corp., Office of the
Comptroller of the Currency and Office of Thrift Supervision were all
before the U.S. Senate Subcommittee on Financial Institutions on
Wednesday sounding a warning about bad commercial real estate loans and
their threat to the health of the banking system, none of which is
news, but all of which is troubling.
Economy Watch - Mortgage Reforms From Out West
Oct 14, 2009
California Gov. Arnold Schwarzenegger signed green legislation over the weekend, as covered by CPE
on Monday, but also nestled in the raft of bills that he signed were
major overhauls of the rules governing residential mortgages. The
thrust of the reforms was to help prevent some of the mortgage
origination abuses that were rampant in the mid-2000s, and which did
their part to inflate the housing bubble.
Economy Watch - California Incentivizes Green Rooftops
Oct 13, 2009
Gov. Arnold Schwarzenegger was busy over the weekend signing off on
policies that could have an impact on green real estate development.
Among other things, he signed a memorandum of understanding with U.S.
Secretary of the Interior Ken Salazar to expedite the siting of
California renewable energy projects, thus making California the first
state to do so. The memorandum commits the federal government to work
with California to review and approve renewable energy applications in the state.
Economy Watch - Foreclosure Efforts Not Paying Off?
Oct 12, 2009
Is the federal effort to forestall residential foreclosures all the administration is cracking it up to be? As reported by CPE,
late last week the U.S. Treasury Department was trumpeting 500,000 as
the number of homeowners who have had their mortgage payments
(temporarily) lowered under the Making Home Affordable program, which
began earlier this year.
Economy Watch: Fannie, Freddie Still Vexed by Mortgage Defaults
Oct 09, 2009
Federal Housing Finance Agency acting director Edward J. DeMarco told
Congress on Thursday that it ain’t over till it’s over when it comes to
the problems caused by U.S. housing mortgage delinquencies. And for
Freddie Mac and Fannie Mae especially, it’s not nearly over.
Economy Watch: Blackstone Takes Amusement Parks
Oct 08, 2009
It seemed like an announcement from the good old days (2006, say):
Blackstone Group L.P. is buying a sizable chunk of real estate. But it
was in fact on Wednesday when the buyout giant told the world that it
was going to spent some $2.7 billion to buy Anheuser-Busch InBev NV’s
amusement parks.
Economy Watch: Retail Group Sees Less Holiday Spending
Oct 07, 2009
In contrast to the mildly positive forecast by the International
Council of Shopping Centers about the upcoming retail holiday sales
season (1 percent growth), as covered recently by CPE,, the
National Retail Federation is predicting a mildly negative holiday
sales season for the nation’s put-upon retailers—namely, a 1 percent
decline during November and December, as compared with the same two
months in 2008.
For FirstService, Expansion via Investment
Oct 07, 2009
When an advisory firm is looking to expand its geographic presence,
that typically means it will either establish a new office, or partner
with—or buy out—a local firm. But FirstService Real Estate Advisors, a
subsidiary of FirstService Corp., has taken a different strategy in its
bid to expand its operations abroad.
Economy Watch: MGM Cuts Condo Prices
Oct 06, 2009
In an effort to keep buyers from wriggling out of their deals, and as a
simple acknowledgment that the luxury condo market just isn’t what it
used to be, MGM Mirage and its partner Dubai World are slashing prices
for condos at their City Center development in Las Vegas by 30 percent.
Apartment REITs See Record Jump in Returns
Oct 06, 2009
While it's probably early to label it a full-fledged resurgence, apartment REITs bounced back in a big way last quarter. The National Association of Real Estate Investment Trusts reported that the FTSE NAREIT All REITIndex was up 31.52 percent in the third quarter--the index's best-ever quarterly gain--bringing year-to-date total returns to 17.73 percent through Sept. 30.
Economy Watch: Greenspan Sees Recovery, Except for the Part About Jobs
Oct 05, 2009
Former Fed Chairman Alan Greenspan tossed out two more cents on the
economy on Sunday, estimating that the recovery will be a little more
V-shaped than he previously thought, with 3 percent growth in the
quarter just ended instead of 2.5 percent (and “possibly even higher.”)
Economy Watch: What the Fed Wants
Oct 02, 2009
Ahead of the report on Friday about unemployment from the U.S.
Department of Labor, from which no one is expecting particularly good
news, various members of the Federal Reserve were on the speaking
circuit talking about the economy and the role of the Fed.
Economy Watch: Mortgage Delinquencies Rise Again
Oct 01, 2009
The U.S. Office of the Comptroller of the Currency reported on
Wednesday that 5.3 percent of all residential mortgages that it tracks
(about 64 percent of the outstanding total nationwide, or about $6
trillion in principal balances) were seriously delinquent, or more than
60 days behind, in 2Q09. That’s up from 4.8 percent during the first
quarter of the year, and up from 3 percent a year ago.
Economy Watch: Home Prices Edge Upward, But Consumers Still Nervous
Sep 30, 2009
Home prices in the 20 metro markets surveyed by the S&P
Case-Shiller home-price indexes were up in July from June by 1.6
percent, which is believed to be a sign that there’s finally a floor
under the U.S. housing market, especially since it’s the third monthly
increase in row. The floor is in the basement, since prices are still
13.3 percent lower than in July 2008, and roughly at the same levels as
in 2003.
Mergers Continue as Federal Capital Snaps Up ACPT
Sep 29, 2009
Three weeks after American Community Properties Trust formed a special
committee to consider strategic alternatives, the St. Charles,
Md.-based real estate company has entered into a merger agreement with
Washington, DC-based real estate investment entity Federal Capital
Partners' FCP Fund I L.P.
Economy Watch - ICSC Predicts Slightly Improved Holiday Season for Retailers
Sep 29, 2009
The International Council of Shopping Centers expects holiday sales
among U.S. retailers to rise 1 percent this year compared with last
year, when retail sales fell off a cliff (down 5.8 percent compared
with the pre-recession holiday season of 2007). It's a slightly more
optimistic forecast than some other organizations that track retail
activity, such as the flat 2009 holiday sales predicted by Retail
Forward, as previously reported by CPE.
Economy Watch - New Home Sale Eke Out August Uptick
Sep 28, 2009
New home sales were up in August according to the U.S. Department of
Commerce, but only by 0.7 percent when compared with July. New-home
sales were 429,000 in August, up from 426,000 in July; the August 2009
total was 3.4 percent less than in the same month in 2008. Reportedly
economists, as polled by Thomson Reuters, were surprised that sales
weren't more robust. But apparently a technical recovery from a
recession isn't a terrific impetus to run out and buy a house.
Economy Watch - Existing Home Sales Take August Dip
Sep 25, 2009
First, the good news. Jobless claims dropped unexpectedly last week,
according to the U.S. Department of Labor. Some 530,000 claims were
filed for the week ended September 19 compared with 530,000 the week
before.
Economy Watch - CRE Buying Opportunities: Not as Many as Anticipated
Sep 24, 2009
REIT IPOs may have been the big thing this summer in commercial real
estate finance, but there are signs that the party is cooling off.
Namely, both Apollo Commercial Real Estate Finance Inc. and Colony
Financial Inc., which specialize in mortgage holdings, cut their IPOs
in half on Wednesday, according to filings with the SEC. Apollo now
plans to sell 10 million shares instead of 20 million, while Colony
reduced its offering from 25 million shares to 12.5 million.
Economy Watch - Retailers Face Flat Holiday Season
Sep 23, 2009
The 2009 holiday sales season (along with the rest of the fourth
quarter of this year) will be bad for retailers, predicts Retail
Forward, in a bit of forecasting that's hard to disagree with. The
retail consultancy is predicting average 4Q09 retail sales will neither
grow nor decline when compared to abysmal 4Q08 retail sales. Zero
percent growth, Retail Forward pointed out, will be the second-worst
growth in more than 40 years--only 2008 being worse.
Economy Watch - Leading Economic Indicators Wax Positive
Sep 22, 2009
The Conference Board's index of leading economic indicators rose again for the fifth month in a row, the longest positive stretch for the indicies in five years, adding more weight to the notion that the recession is over, at least technically. According to the New York-based organization, the index--which forecasts the economic outlook for the next three to six months--rose 0.6 percent in August.
Economy Watch - IRS Changes Rules for Securitized Loan Modification
Sep 21, 2009
From the nether reaches of the Internal Revenue Service a new tax rule recently emerged (Revenue Procedure 2009-45), the effect of which will be to let real estate borrowers pursue possible modifications to securitized loans--ones that are at risk of default--without triggering tax penalties. Previously, administrative tax rules imposed severe penalties for changes made to commercial mortgage pools or investment interests after the startup date of the securitization vehicle. This naturally had the effect of keeping borrowers mum until default had actually occurred or was nigh.
RE Shares Continue Positive Run
Sep 21, 2009
Real estate stocks are continuing to rebound, according to a new report by ING Clarion Real Estate Securities.
Economy Watch - Multifamily Leads the Way in Housing Starts Increase
Sep 18, 2009
Housing starts and building permits in August were at their highest
level all year, rising 1.5 percent to an annual rate of 598,000 units,
while building permits were up 2.7 percent during the month, according
to the U.S. Department of Commerce. All of the increase was in the
multifamily segment of the housing market: starts spiked up 25.3
percent for multifamily, while single-family home starts dropped 3
percent.
Economy Watch - Bernanke Says Recession Over--Technically
Sep 16, 2009
Federal Reserve Chairman Ben Bernanke, speaking at the Brookings
Institution on Tuesday, said that the recession is "very likely" over.
Or, to quote the chairman more fully: “From a technical perspective,
the recession is very likely over at this point.”
Economy Watch - Lessons Learned from Lehman?
Sep 15, 2009
A year after the failure of Lehman Brothers, President Obama came to
Federal Hall in New York--the literal Wall Street--to push for reform
of the financial sector, including a "resolution authority" that would
let the federal government deal with companies that pose "systemic
risk" for the economy. Such as Lehman or other even bigger institutions
that were not allowed to fail last year. Unlike other audiences
recently, the president was reportedly met with mostly silence by the
gathered financial executives, members of Congress and other assorted
non-nattering nabobs at the speech.
Economy Watch - One Year Later, No Agreement on Impact of Lehman
Sep 14, 2009
On the eve of the first anniversary of the Lehman Brothers Holdings
Inc. collapse, economists are busy doing what they do best--disagreeing
with each other about what it meant, and what has changed since then
(besides the fact that many people are poorer than they used to be) and
where things are headed from here.
Economy Watch - Dollar Stores Still U.S. Retail Winners
Sep 11, 2009
Dollar stores, one of the few categories of retail winner during 2009
(besides Wal-Mart), keep piling on the positive numbers. Dollar General
Co. reported numbers for its second fiscal quarter on
Thursday, turning in 8.6 percent increase in same-store sales compared
with 2Q08. Its quarterly net income increased 238 percent.
Economy Watch - Beige Book Offers a Little Optimism
Sep 10, 2009
The Federal Reserve's latest Beige Book, released on Wednesday, was
redolent with cautious optimism, a fairly common sentiment in this
fifth--sixth?--seventh? inning of the Great Recession (which could also
go into extra innings).
Economy Watch - Health Care Jobs Help Spur Investor Interest in Sector
Sep 08, 2009
Just ahead of Labor Day, the U.S. Department of Labor pegged the official U.S. unemployment rate at 9.7 percent in August, a surprising uptick, but actually not that much of a jump since at the same time its figures for June and July were both revised upward. A net of some 216,000 people lost their jobs in August, with construction and manufacturing still accounting for a large share of those numbers(65,000 and 63,000, respectively).
Economy Watch - Retail Sales Drop, But Only a Little
Sep 04, 2009
Retailers are already looking ahead to the holiday season with some
trepidation, but on the other hand, the back-to-school sales season
wasn't a complete disaster for most of the big retailers. Same-store
sales for 32 of the largest chains in August 2009 were down compared
with last year, certainly; some 2 percent. But in retail these days,
down a little counts as reasonably good news.
Economy Watch - CRE Sales to Dwell in Cellar for Years, Says Report
Sep 03, 2009
Commercial real estate investment sales in the first half of 2009
totaled $16 billion, down 80 percent from the same period in 2008,
according to Jones Lang LaSalle Inc.'s U.S. Mid-Year Capital Markets
bulletin, released on Wednesday. Compared with the all-time high-volume
six-month period for such sales during the first half of 2007, when
some $231.4 billion in commercial real estate traded hands in the
United States, $16 billion seemed positively like chump change.
Economy Watch - Buyers Flock to Cheaper Houses
Sep 02, 2009
The volume of pending U.S. home sales increased again in July,
according to the National Association of Realtors, representing the
sixth monthly increase in row. The association's Pending Home Sales
Index increased 3.2 percent in July to 97.6, which is 12 percent points
higher than in July 2008, back before the full force of the recession,
but not before the housing bubble popped.
Economy Watch - CRE Default Rate More Than Doubles Since Last Year
Sep 01, 2009
Rents and occupancies are down, meaning that commercial real estate
defaults are up--way up, according to Real Estate Econometrics L.L.C.
Such loans in default, that is more than 90 days past due, stood at
2.88 percent as of 2Q09, compared with 1.18 percent during the same
quarter last year. Both banks that hold commercial mortgages and CMBS
bondholders are suffering because of the swelling rate of defaults.
Economy Watch - More REIT IPOs Hatched
Aug 31, 2009
More REIT IPOs are in the works, with the filing of the necessary
documents with the Securities and Exchange Commission by Brookfield
Realty Trust and Marathon Real Estate Trust on Friday for entities that
will invest $500 million and $300 million in various kinds of debt.
Brookfield said it will use the money to originate and buy mortgage
loans, and mezzanine loans, and possibly CMBS. As for Marathon, it will
go shopping for MBS, mortgage loans and other real estate-related loans.
Economy Watch - GDP Shrinks, But Not by Much
Aug 28, 2009
The U.S. Department of Commerce offered yet another clue that, with any
luck, the panic and the recession will someday merely be bad memories.
According to Commerce, the U.S. GDP contracted at a 1 percent
annualized rate during 2Q09, less than expected. The rate was also
considerably less than the annualized rate of contraction seen in the
first quarter, 6.4 percent, and the rate of contraction during the
fourth quarter of 2008, 5.4 percent.
Economy Watch - Surge in New Home Sales Surprises Everyone
Aug 27, 2009
"Uptick" isn't the word for the latest increase in new home sales; "surge" is more like it. The U.S. Department of Commerce reported on Wednesday that sales rose 9.6 percent from June to July, to an annual pace of 433,000. It's the fourth month in a row that new home sales have increased, though the July 2009 pace was still 13.4 percent lower than that of July 2008.
Economy Watch - Case-Shiller Index Sees Another Uptick
Aug 26, 2009
Is this the bottom? For sure? Everyone in the housing industry, and a
lot of other people besides, are probably asking that question after
the release of the latest S&P/Case-Shiller index report on Tuesday.
The index, which measures home prices in 20 major metro areas, ended
June up 1.4 percent, turning in a second monthly gain in a row. Prices
were up in 18 out of the 20 metro areas, and it was the second monthly
increase in the index since the mid-2006, just before the bubble popped.
Economy Watch - Is Delinquency Forever? Mostly, Says Fitch
Aug 25, 2009
The next big concern about the housing market might the concept of
delinquency cure rates, according to a new study by Fitch Ratings. The
cure rate is the percentage of delinquent prime loans returning to a
current payment status each month, and for most of this decade (2000 to
2006), the rate averaged about 45 percent.
Economy Watch: Existing Home Sales Spike
Aug 24, 2009
Sales of existing homes, which had been in the doldrums for quite a
while, have picked back up briskly, says the latest report. According
to the National Association of Realtors, sales spiked 7.2 percent in
July, to an annualized total of 5.24 million, the fourth monthly
increase this year. In the ten years that the association has been
tracking existing home sales, there has never been a larger monthly
increase.
Economy Watch - 2Q Mortgage Delinquencies Set Dubious Record
Aug 21, 2009
The Mortgage Bankers Association has been keeping track of residential
mortgage delinquencies (those more than 30 days late) and residential
foreclosures since 1972, and the percentage of delinquencies has never
been higher than it was during the second quarter of 2009. At the end
of 2Q09, the seasonally adjusted rate of mortgage delinquencies stood
at 9.24 percent, up 12 basis points from 1Q09, while the non-adjusted
rate is 8.86 percent, according to the MBA's most recent calculations,
released on Thursday.
Economy Watch - CRE Price Declines Slow
Aug 20, 2009
U.S. office, retail and apartment property prices fell 1 percent in
June, according to the Moody's/REAL Commercial Property Price Index
released on Wednesday. It's a decline, but as was quickly noted, not
very much of a decline when compared to this spring--which saw drops by
the index of 7.6 percent and 8.6 percent in May and April, respectively.
Economy Watch - IMF, Other Economists Feeling (A Little) Optimistic
Aug 19, 2009
The worldwide recovery is under way, according to the International
Monetary Fund, but the organization isn't breaking out the party hats
just yet. In an article released Tuesday, IMF chief economist Olivier
Blanchard said that most countries are going to see growth in the near
future, but sustaining a recovery will not be automatic. "The crisis
has left deep scars, which will affect both supply and demand for many
years to come," he wrote.
Economy Watch - TALF Gets Longer Life
Aug 18, 2009
The real estate securitization business, which has had enough problems
lately, got a bit of good news on Monday when the Federal Reserve
extended the Term Asset-Backed Securities Loan Facility, better known
as the TALF. For new CMBS--the little that there is--the extension runs
through June 30, 2010, while legacy CMBS has until March 31.
New Hines REIT is Latest to Eye Public Offering
Aug 17, 2009
On the heels of Brookfield Properties Corp.’s announcement of a major
public offering late last week, another REIT is hoping to raise capital
via a stock sale as Hines unveils a new global trust to be seeded by a
$3.5 billion share offering of its own.
Economy Watch - CRE Valuation Takes a Thrashing in First Half '09
Aug 17, 2009
U.S. commercial property valuations have dropped more in the first six
months of 2009 than all of 2008, according to a report by the
Investment Property Databank. The IPD US Annual Property Index for last
year showed an annual capital return of minus 12.2 percent; during the
first half of 2009, the return was about minus 17 percent.
Economic Update - Brookfield Looks to Public Offering For Dough
Aug 13, 2009
Brookfield Properties Corp. is the latest REIT--and there have been a
good many of them lately--to turn to public offerings to raise
much-needed capital. On Wednesday, Brookfield priced $900 million worth
of common shares, or 95 million shares at $9.50 each, a discount of
about 7.4 percent compared with the company's closing price on Tuesday.
Economic Update - Zillow: Residential Price Slide Slows
Aug 12, 2009
Another day, another report about the continuing decline in residential
real estate prices -- but at least one tinged with the kind of optimism
that comes when things aren't getting as bad as fast as before.
According to the real estate web site Zillow.com, which tracks home
sales prices and tries its Zillow best to estimate how much homes not
on the market would fetch, the value of U.S. homes fell 12.1 percent in
2Q09 compared with 2Q08, just before the panic set in.
Economic Update - Maguire Vows to Avoid Bankruptcy
Aug 11, 2009
The question of what to do with commercial buildings weighed down by
mid-2000s vintage securitized debt is one that's going to have to be
worked through building by building and loan by loan, it seems. But
there are going to be some bellwether cases, such as Maguire Properties
Inc., which is the process of relinquishing ownership of a portfolio of
prominent Los Angeles-area office buildings.
Economic Update - Glimmers of Recovery on the Horizon
Aug 10, 2009
In news that caught most everyone's attention on Friday, the U.S.
Department of Labor said that the nation's unemployment rate actually
went down 10 basis points in July, to 9.4 percent. It's being called a
sign of stabilization because monthly changes in the unemployment rate
that small tend to be revised out of existence eventually, but at this
point, "stabilization" looks pretty good.
Economic Update - Roundtable Survey Finds CRE in Poor Mood
Aug 06, 2009
The latest quarterly survey by the Real Estate Roundtable, released
Wednesday, found the commercial real estate sector in a funk, squeezed
by poor financing prospects, decreasing valuations and lower demand for
commercial real estate of all varieties.
Economic Update - MIT/CRE Index Takes Hit in 2Q09
Aug 05, 2009
Commercial real estate took a drubbing in the second quarter, according
to Massachusetts Institute of Technology Center for Real Estate, whose
index tracking commercial properties sold by institutional investors
dropped 18.1 percent during 2Q09. The index is down 32 percent from the
end of 2Q08, and 39 percent from its mid-2007 (that is, bubble) peak.
Economic Update - Disney Weighs in on the Economy
Jul 31, 2009
Is Disney a major lagging indicator for the U.S. economy? Maybe. In any
case, Walt Disney Co. CEO Robert Iger sounded like a central banker on
Thursday during the company's second-quarter conference call: "We do
see signs of economic stabilization, but the pace and strength of
recovery remain uncertain, and we are managing accordingly," he said.
Economic Update - Could Be Worse, Says Fed
Jul 30, 2009
The latest Beige Book from the Federal Reserve is out, and the
message is that the economy is still fairly bad, but not quite as bad
as it was, or could be. Employers are still laying workers off, but not
as quickly as before. Lenders are still reluctant to lend and borrowers
are still reluctant to borrow. but there's a modicum of activity.
Regarding real estate, some member banks--Atlanta, Cleveland, San
Francisco--reported rising real estate loan delinquencies.
Economic Update - New Home Sales See Uptick
Jul 28, 2009
New single-family home sales recorded an uptick in June, increasing 11
percent compared with May, to an annualized rate of 384,000. It looks
like a little pent-up demand for new homes is being unleashed,
especially since prices are still falling. The Commerce Department also
reported that the median price for a new house stood at $206,200 in
June, down 12 percent from last June.
Economic Update - Four More Years for Bernanke?
Jul 27, 2009
Economist Nouriel Roubini, also known as Dr. Gloom (or is it Dr. Doom?)
for his voice-in-the-wilderness prediction of the soon-to-pop bubble
back during the bubble's expansion phase, opined in the New York Times
on Sunday that Federal Reserve chairman Ben Bernanke deserves another
term after his current one expires in January, crediting him with
"decisions [that] prevented the Great Recession of 2008-2009 from
turning into the Great Depression 2.0."
Economic Update - Housing Treads on the Bottom?
Jul 24, 2009
Could spring 2009 have been the housing bottom everyone has beenwaiting for since the pop of the bubble? Residential real estatespecialists hope so. According to the National Association of Realtors,U.S. existing home sales were up 3.6 percent in June to an annualizedrate of 4.89 million. That's more than economists were predicting, andthe most since October 2008.
Economic Update - Fed Paying Attention to CRE Time Bomb
Jul 23, 2009
Federal Reserve Chairman Ben Bernanke, wrapping up two days of
testimony to Congress on Wednesday, talked about a number of weighty
economic issues, including concerns about commercial real estate. The
ticking time bomb analogy didn't come up--pundits talk that way, not
central bankers--but the commercial real estate debt problem
nevertheless got a fair amount of attention.
Economic Update - Panning for Gold in CRE Debt
Jul 22, 2009
Federal Reserve Chairman Ben Bernanke, high oracle of the U.S. economy,
began two days of testimony before Congress on Tuesday, and said that
things will slowly get better, eventually. He also noted that he and
his banking brethren are watching developments in the commercial real
estate industry--that ticking time bomb--with all the attention that a
ticking time bomb deserves. Meanwhile, down in the trenches, there's a
gold rush of sorts going on to find profits in real estate debt.
Economic Update - Green Shoots a Little Greener, but CRE Not Overjoyed
Jul 21, 2009
It was a good way to start the week, economically speaking. According
to the Conference Board, the U.S. index of leading economic indicators
rose 0.7 percent in June, marking the third rise in the index in as
many months. In the first half of 2009, the index improved at an
annualized rate of some 4.1 percent , a clear contrast to the way it
shrank in the last half of 2008 at an annualized rate of 6.2 percent.
Economic Update - Homebuilding Unexpectedly Perks Up, For Now
Jul 20, 2009
The residential market made a surprising turn on Friday, with the U.S.
Department of Commerce reporting that housing starts were up 3.6
percent in June when compared with May: an annualized total of 582,000
units versus 562,000 units. Economists weren’t expecting that many.
Economic Update: Retailers Term CIT Too Big to Fail; TALF Attracts Interest
Jul 17, 2009
As if the retail industry didn't have enough trouble, the prospect of a
CIT Group bankruptcy is blowing through the industry like an unexpected
squall. On Thursday, those new worries were reflected in the S&P
Retail Index, which fell 0.8 percent. If CIT does go under, many
smaller and mid-sized apparel retailers might also have trouble staying
afloat later this year, especially during the critical holiday season.
Economic Update - CalPERS Takes Rating Agencies to Task
Jul 16, 2009
Another California trend? CalPERS, the nation's largest pension fund, has filed suit against the three largest credit-ratingsagencies, essentially asserting that the agencies gave away highratings like gold stars to kindergartners back in the days when realestate only went up. Or to use the language of the lawsuit, "wildlyinaccurate and unreasonably high" ratings on various structuredinvestment vehicles caused the pension fund to lose a cool billiondollars.
Economic Update: On Cars, Gas and Lipstick Sales
Jul 15, 2009
Closely watched retail figures from the National Retail Federation show
that June retail sales took a small dip of 0.2 percent when compared to
May, and were down 3.8 percent when compared to June 2008. These
figures differed somewhat from those of the U.S. Department of
Commerce, which released its own retail sales figures last week that
showed a slight improvement in sales in June when compared with
May--growth of 0.6 percent. The difference is that Commerce includes
cars, gasoline and restaurant sales, . In fact, the only category to
have grown since this time last year was health and personal care
stores, up 3.7 percent since 2008. Could it be due to the "lipstick
effect"?
Economic Update - CMBS Delinquencies Spike
Jul 14, 2009
U.S. Commercial mortgage-backed securities delinquencies grew in June
by a record $2.2 billion, according to Fitch Ratings. Last month there
was a 2.6 percent delinquency rate among U.S. CMBS, up 48 basis points
from the previous month. In June, at least, problems in retail
properties and the hospitality industry inspired much of the upward
bounce in delinquencies. But there's more to come, especially in the
beleaguered hotel sector.
Economic Update - Christmas in July to Boost Retail Sales?
Jul 10, 2009
As expected, June was a lousy month for retail sales--except at a few
retailers, probably including Wal-Mart Stores Inc., though the giant
retailer doesn't report monthly comparable-store sales. Target Corp.,
on the other hand, reported a 6.2 percent comp-store drop from June
2008, while Costco Wholesale Corp. dropped 6 percent. Major department
store chains took a comp-store drubbing as well: Nordstrom Inc., down
10 percent; Macy's, down 8.9 percent; J.C. Penney down 8.2 percent;
Dillard's Inc. down 14 percent.
Economic Update - Discount Retailers Still on Top
Jul 09, 2009
Even in a recession, there will be winners. Even in the retail world,
which has taken such a beating lately, there will also be winners--such
as Family Dollar Stores Inc., which reported its fiscal third-quarter
numbers on Wednesday. Its earnings spiked upward by 36 percent, which
the discount retailer attributed to strong sales of necessities.
Comparable-store sales, an important metric in the retail game, were up
6.2 percent.
Economic Update - Loan Delinquencies Edge Ever Upward
Jul 08, 2009
It's an age of loan delinquency. According to a report released Tuesday
by the American Bankers Association, delinquencies on consumer debt --
those debt holders more than 30 days late -- stood at a record 3.23
percent during 1Q09. That's only up a little from 4Q08, yet still the
highest rate since the organization began tracking such things in 1974.
Economic Update - Economy Ekes Out One More Green Shoot
Jul 07, 2009
Those economic green shoots, so eagerly awaited this spring, got a
blast of frost here in mid-summer when jobs numbers came in weaker than
expected for June late last week. Yet on Monday, the Institute for
Supply Management’s index of non-manufacturing businesses, which gauges
the pulse of about 90 percent of the economy, improved for the third
straight month.
Economic Update - Home Sellers, Appraisers Quarrel Over Valuations
Jul 06, 2009
Writing in the Wall Street Journal late last week, Stan
Liebowitz noted that "the evidence from a huge national database
containing millions of individual loans strongly suggests that the
single most important factor [in foreclosures] is whether the homeowner
has negative equity in a house..." Blaming subprime mortgage lending
for the current housing crisis, he asserted, misses the point.
Economic Update - Wal-Mart Takes Historic Healthcare Position, But Why?
Jul 02, 2009
It's a peculiar time in history when a retailer can influence the debate about national healthcare policy. Yet Wal-Mart is doing just that by coming out earlier this week in favor of the government forcing employers to provide health insurance to workers. It was seen as something of a surprise. The Wall Street Journal characterized the National Retail Federation as "flabbergasted" by Wal-Mart's decision. (Were NRF officials sitting around in conference rooms, being flabbergasted together?)
Economic Update - ProLogis Sells in Big Way to Deleverage
Jul 01, 2009
The difficult year 2009 is half over, and recent deals by one of the
world's largest landlords show two things about the current climate.
First, deleveraging is in. Second, there are buyers out there to help
sellers who want to raise some cash to do that deleveraging.
Economic Update - Worldwide CRE Still Feels Recession's Reverberations
Jun 30, 2009
Sometimes lost in the din of bad economic news in the United States isthe worldwide impact of the current recession on commercial realestate. Markets everywhere have been affected to some degree, someworse than others, and players in those markets are only now beginningto sort things out, as they are here at home.
Economic Update - Consumer Spending, Saving Up; Will Retailers Benefit?
Jun 29, 2009
This might count as good news: U.S. consumer spending and personal income both rose in May. Spending jumped by a small but noticeable 0.3 percent when compared with April, and personal income spiked upward by 1.4 percent, the strongest jump in more than a year, according to the U.S. Department of Commerce. The question now for retailers and their landlords is how much of that is going to go toward buying things.
Economic Update - CRE Still Faces Stress, Distress
Jun 26, 2009
Not-quite-so-bad news still passes for good news: the U.S. Department
of Commerce has revised its estimate of the annualized contraction of
the American economy in the first quarter of 2009 to 5.5 percent,
instead of the 5.7 percent previously estimated. Still, paired with the
4Q08 annualized contraction of 6.3 percent, the six months between last
October and this March represent the poorest economic performance for
the U.S. economy in over a half century.
Economic Update - No Green Shoots in New Home Sales
Jun 25, 2009
Earlier this week, there were glimmers of green shoots in existing home sales, which have been trending upward lately. No such shoots have been sprouting in new home sales, however, to the apparently surprise of economists forecasting an uptick. Compared with April, new home sales in May were actually down 0.6 percent, according to the U.S. Census Bureau on Wednesday.
Economic Update - Homebuyers Slowly Returning to Existing Home Market
Jun 24, 2009
Homebuyers seem to be returning to the existing-home market this summer, according to the latest report by the National Association of Realtors on existing U.S. housing sales. The sales of single-family homes, condos and coops rose 2.4 percent in May compared with April, coming on top of a gain for that month compared with March, thus marking the first back-to-back monthly increase in existing home sales since 2005.
Economic Update - Housing Reports See Short-Term Funk, Long-Term Hope
Jun 23, 2009
The residential refinancing boom that budded so promisingly in the spring has wilted, according to the latest predictions by the Mortgage Bankers Association. Back in March, the organization predicted refi activity to the tune of about $2.75 trillion nationwide by the end of 2009, spurred by historically low interest rates. Now that those low rates have evaporated, MBA says that total originations for the year will probably come in just above $2 trillion.
Economic Update - Tesco Completes Sale-Leaseback, CMBS Deals
Jun 22, 2009
British retailer Tesco Plc. inked a sale-leaseback of 14 properties. The sale-leaseback followed on the heels of the company's successful
completion of the sale of commercial mortgage-backed securities. The offering by Tesco may mark the glimmering beginnings of a new, simpler CMBS market.
Economic Update - Unemployment Numbers Mixed, But Outlook Promising
Jun 19, 2009
Despite jobless number climbing yet again, there appears to be some light at the end of the tunnel as the number of already unemployed workers filing claims dropped for the first time in more than six months. Couple that with the four-week average of job cuts at its lowest since mid-February and you’ve got a one-two punch of what passes these days as some very positive news.
Economic Update - Obama Unveils Financial Overhaul Plan
Jun 18, 2009
Responding to the economic crisis facing the United States, President Obama has proposed vast regulatory changes, including the creation of a new consumer agency aimed at guarding against the kinds of lending abuses which resulted in many Americans being saddled with far more mortgage debt than they could handle.
Economic Update - Recovery or Continued Slowdown?
Jun 17, 2009
Is the economy picking up or continuing to struggle? It seems to depend upon who you talk to and when you talk to them. While many reports gave a variety of accounts Tuesday, most supported bets that the pace of the recession is slowing.
Stocks, Retail Sales Rise, But So Does Unemployment
Jun 12, 2009
Stocks were higher Thursday closing at highs for recent
months with hopes that economic recovery is on its ways, while investors
concerned that the government’s spending spree and mounting debt will lead to
inflation caused treasuries to surge as an $11 billion sale of 30-year bonds
drew the highest yield in almost two years.
Economic Update - CRE Defaults Head for High Ground
Jun 10, 2009
A new report by Real Estate Econometrics, based on FDIC data, puts thecommercial real estate loan default rate at its highest level in morethan a decade and a half, at least those loans held by regulateddeposit-taking institutions—banks and thrifts, for the most part. Thedefault rate soared from 1.62 percent in the last quarter of 2008 to2.25 percent in the first quarter of 2009. That rate doesn’t includedefaults on loans associated with multi-family rental properties, whichReal Estate Econometrics put at 2.45 percent in the first quarter of2009, up 68 basis points from the previous quarter.
Economic Update - Fast-Track Chrysler Reorganization Stalls
Jun 09, 2009
The Chrysler reorganization and sale to Fiat, which
was to have been a model of a quick turn-around, has hit a snag in the
form of a court order by U.S. Supreme Court Associate Justice Ruth
Bader Ginsburg. Pension funds that hold some of Chrysler’s secured loan
are objecting to the goings-on, claiming it isn’t fair to them, and so
petitioned Justice Ginsburg for the measure. It isn’t clear how long
the temporary stay will delay the sale, or whether it will kill the
sale, or whether the full court will reverse the stay in a few days.
It’s unlikely, though, that the legal wrangling will affect the fate of
the Chrysler dealerships slated for closing, or change the amount of
real estate their closing will put on the market.
Economic Update - Starwood Eyes Distressed Sector with $500M Fund
Jun 08, 2009
Yet another deep-pocketed real estate entity has jumped into the grave-dancing game—only please, don’t call it that, but rather strategic investment in distressed properties. The player is a newly formed investment company called Starwood Property Trust Inc., a creation of Starwood mogul Barry Sternlicht, which filed with the Securities and Exchange Commission late last week for a public offering that aims to raise half a billion dollars to do the distressed-property boogie. It will invest in not only physical properties, but mortgages and mortgage-backed securities.
Economic Update - Retailers See May Malaise
Jun 05, 2009
May comparable-store sales numbers are filtering down from various retailers, and the results aren't inspiring confidence in the prospects for recovered consumer spending. Actually, most analysts expected average retail same-store sales to decline in May 2009 when compared with May 2008, but the trouble was they declined more than expected.
Economic Update - CRE Buyers Looking for Deals
Jun 04, 2009
Turns out that the recession is still on, at least if the latest
numbers from payroll firm ADP accurately reflect the state of hiring
and firing in the nation. According to ADP on Wednesday, U.S. companies
cut an estimated 532,000 employees from their payrolls last month, with
goods producers laying off 267,000 workers, and service providers
shedding 265,000 positions.
Signs of Life in 2Q as Sales Volume, Capitalization Jump
Jun 03, 2009
Despite overall sales figures down double digits from last year, transactions are still move forward, albeit in smaller amounts. Another good sign of real estate activity is the re-equitization of the REIT industry that continued in May as more companies deleveraged their balance sheets with equity capital raised in the public markets.
Economic Update - Seismic Shifts in Auto Industry Have CRE Implications
Jun 02, 2009
Monday was an historic day in Detroit, and arguably for the entire U.S.
manufacturing sector, even though GM's formal announcement of
bankruptcy, along with President Obama's promise for more than $30
billion for a company in which the U.S. Government will soon own a
controlling interest, weren’t surprises . A little more surprising
(only a little) was the quick approval by Chrysler's bankruptcy judge
of the sale of most of its assets to a group led by Fiat SpA, meaning
that the Detroit automaker will continue to exist in one form or
another, albeit with Italian bosses. But the fact that both events
happened the same day is an unusual coincidence indeed.
Economic Update - Mortgage Rate Worries Weigh on Housing Market
Jun 01, 2009
General Motors was in the news over the weekend before the largest
bankruptcy in U.S. history (that is, its own), but more worrying for
many policymakers, economists and ordinary borrowers is last week's
sudden spike in mortgage interest rates.
Economic Update - Foreclosures Spike Among Prime-Mortgage Holders
May 29, 2009
The tsunami of residential foreclosures may have started, back in the
days of easy mortgage money, with borrowers whose only qualification
was being able to fog a mirror. About half of those kinds of subprime
mortgages have resulted in a foreclosure outcome, and Alt-A-inspired
foreclosures are spiking too. But now, according to the Mortgage
Bankers Association, foreclosures on prime fixed-rate loans represent
the largest share of brand-new foreclosures.
Fitch: General Growth Chapter 11 Ruling a Mixed Blessing for Bondholders
May 26, 2009
The special-purpose entity structure that has helped to power real
estate finance in recent years remains intact after recent court
decisions tied to the General Growth Properties Inc. Chapter 11
bankruptcy filing. However, the rulings may turn out to be less than a
total victory for bondholders in the long run.
Economic Update - Legacy CMBS Now Under TALF
May 20, 2009
In a major expansion of the Term Asset Backed Securities Loan Facility (TALF), the Federal Reserve said on Tuesday that investors will be able to buy existing securities backed by commercial real estate loans--so-called "legacy" CMBS. The commercial real estate industry has been pushing for this for some time, and it will at last be possible starting in July.
Pocketing $387M, SL Green Becomes Latest REIT to Raise Equity Via Public Offering
May 19, 2009
SL Green Realty Corp. has jumped on the bandwagon of REITs that, facing credit markets that are frozen like a block of ice, have opted to raise funds through public offerings. The company, which is still New York City's largest office landlord, just walked away with net proceeds of approximately $387.4 million after selling 19.55 million shares of common stock.
Economic Update - Spooked by Economy, Consumers Consume Less
May 14, 2009
The U.S. Department of Commerce reported that retail sales dropped by 0.4 percent in April, compared with the previous month. The decline was a little more than expected, but less than the revised March drop of 1.3 percent. The recent two months of decline followed unexpected increases in consumer spending in January and February.
Economic Update - AIG Unloads Choice Tokyo Property for $1.2B
May 12, 2009
American International Group is finally in the news for something other than being a multibillion-dollar black hole for the U.S. Treasury; namely, a property sale. The beleaguered insurer has inked a deal to sell the AIG Otemachi Building and a one-acre site in Tokyo to Nippon Life Insurance Co.
Economic Update - Smaller Banks Face CRE Woes
May 07, 2009
On Wednesday, the eve of the stress test results, observers were
wondering just how much trouble sour commercial real estate loans are
going to cause those banks that hold them. Knee deep, waist deep, or up
to their eyeballs?
Economic Update - The Week Starts with Some Good News
May 05, 2009
Is that the glimmer of good economic news ahead, or just a mirage? Time
will tell, but for the moment it's good to know that the pending home
sales index rose 3.2 percent in March when compared with February, and
1.1 percent when compared with the same month a year ago, according to
the National Association of Realtors.
Economic Update - Corporate RE Plays New Role in Tough Times
Apr 28, 2009
It's a whole new world for corporate real estate owners, according to the 2009 State of the Industry Report by CoreNet Global, which was released Monday. The report distilled the views and opinions of more than 60 corporate real estate executives from around the world, along with information gleaned from various corporate real estate case studies.
Economic Update - Bear Stearns' Bum Real Estate, Revealed
Apr 24, 2009
Bear Stearns Cos. was in the news again Thursday, in case anyone
remembers back far enough to recall the last time it was big news--a
time when the disappearance of that company into JPMorgan Chase seemed
unfortunate, but not necessarily a harbinger of vast financial problems
ahead. Which, in fact, it turned out to be.
Economic Update - Credit Woes Put Kibosh on $2.5B Midway Deal
Apr 21, 2009
Citi Infrastructure Investors--a joint venture of Citigroup Inc., John Hancock Life Insurance Co. and Vancouver Airport Services-- will be unable to go through with a deal that would have seen the group buy Midway International Airport in Chicago for $2.5 billion. After previous extensions, the City of Chicago decided not to give the group any more time to close on the deal.
Buchanan Street's Brunswick Looks Back at '08, Eyes Future
Dec 22, 2008
Robert Brunswick, founder, president & CEO of real estate investment management firm Buchanan Street Partners, spoke with CPN
senior editor Eugene Gilligan about the Treasury Department’s rescue
package, the major trends of 2008 and what he will be watching for in
2009.
Where Real Estate Investing Professionals Find Answers
Those concerned with commercial real estate loans and the state of commercial development
realize that knowledge improves profits. That's why real estate
professionals turn to Commercial Property News to gather the latest
information on real estate investment banking and other financial
industry news.
|
|
Subscribe to this blog's feed
