Comments on: Sam Zell Optimistic on Economy http://www.squarefeetblog.com/commercial-real-estate-blog/2009/11/12/sam-zell-optimistic-on-economy/ Commercial Real Estate Blog Thu, 18 Mar 2010 20:55:26 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Tampa Commercial Property Agent http://www.squarefeetblog.com/commercial-real-estate-blog/2009/11/12/sam-zell-optimistic-on-economy/comment-page-1/#comment-3360 Tampa Commercial Property Agent Sun, 15 Nov 2009 16:53:58 +0000 http://www.squarefeetblog.com/?p=3539#comment-3360 New FDIC guidance from 2 weeks ago shows what the govie can do without "throwing money" at the problem. I tend to agree with Zell. We are in for some tough times, but the prediction of supreme apocalypse is very exaggerated. Eric W Odum http://www.floridatriplenet.com/blog New FDIC guidance from 2 weeks ago shows what the govie can do without “throwing money” at the problem. I tend to agree with Zell. We are in for some tough times, but the prediction of supreme apocalypse is very exaggerated.

Eric W Odum
http://www.floridatriplenet.com/blog

]]> By: Froggy http://www.squarefeetblog.com/commercial-real-estate-blog/2009/11/12/sam-zell-optimistic-on-economy/comment-page-1/#comment-3351 Froggy Sat, 14 Nov 2009 07:11:42 +0000 http://www.squarefeetblog.com/?p=3539#comment-3351 Rents are rents period. If you lost a tenant and replace them for 25% lower rent, you just ate some TIs and your NOI is impaired. If you paid top dollar for that asset in 04-08, you are not getting that NOI back in time to refi the deal anywhere near your purchase loan was. That is not to mention that LTV parameters and spreads are less favorable, and full recourse is what's for dinner. Cap rates will not dip below 7% until all of the CMBS trash is flushed out well into the next decade, so he's way off base here. Kudos on selling his office at the top, but he gave a lot back on the Tribune deal. At ICSC in May, he said residential was going to bottom out this summer. Not so much. Zell likes to hear himself talk, and he isn't the stakeholder that he once was so he doesnt' really care what he says. Rents are rents period. If you lost a tenant and replace them for 25% lower rent, you just ate some TIs and your NOI is impaired. If you paid top dollar for that asset in 04-08, you are not getting that NOI back in time to refi the deal anywhere near your purchase loan was. That is not to mention that LTV parameters and spreads are less favorable, and full recourse is what’s for dinner. Cap rates will not dip below 7% until all of the CMBS trash is flushed out well into the next decade, so he’s way off base here. Kudos on selling his office at the top, but he gave a lot back on the Tribune deal.

At ICSC in May, he said residential was going to bottom out this summer. Not so much. Zell likes to hear himself talk, and he isn’t the stakeholder that he once was so he doesnt’ really care what he says.

]]> By: Joshua http://www.squarefeetblog.com/commercial-real-estate-blog/2009/11/12/sam-zell-optimistic-on-economy/comment-page-1/#comment-3319 Joshua Thu, 12 Nov 2009 22:40:23 +0000 http://www.squarefeetblog.com/?p=3539#comment-3319 the second paragraph really is the key. it COULD happen zells way. but the govt has basically said they wont throw cash at CRE but that they will be favorable to banks. the employment issue will be a major issue for YEARS to come. so, the CRE mess can be extended and massaged to make it for 2, 3, 7 more years. but then what? when our economic situation is stagnate or slowly growing how does that FIX the issue with CRE loans/properties traded at highs? it fixes nothing. thats the arbitrage. how much can you squeeze out before getting out. the second paragraph really is the key. it COULD happen zells way. but the govt has basically said they wont throw cash at CRE but that they will be favorable to banks. the employment issue will be a major issue for YEARS to come. so, the CRE mess can be extended and massaged to make it for 2, 3, 7 more years. but then what? when our economic situation is stagnate or slowly growing how does that FIX the issue with CRE loans/properties traded at highs? it fixes nothing. thats the arbitrage. how much can you squeeze out before getting out.

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