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Commercial Real Estate Blog

Howard Marks of Oaktree on the Economy

Hedge Fund Manager Howard Marks of Oaktree Capital put out a client memo discussing the economy. The 12-page letter is interesting, but the underlying theme is uncertainty.
The document can be found on the below linked site.
[via Business Insider]

Moody’s: CRE Prices Will Continue To Fall

Despite seeing a 1% uptick in November prices, Moody’s is indicating that it is very likely that commercial real estate prices will continue to fall.
“We anticipate further deterioration in property fundamentals and increases in cap rates,” he suggested, acknowledging that “the worst of the value declines is likely over.”
This goes to the heart of what [...]

Wilbur Ross, LeFrak Interested in Stuyvesant Town

A partnership between Wilbur Ross and Richard LeFrak have expressed interest in Stuyvesant Town, from management to outright acquisition. And they have the funds to back it up:
“We are not really capital-constrained, so we can put up whatever is needed,” Ross said in a telephone interview. “We’re prepared to go all the way.”
The complex is [...]

CRE Values At Bottom?

There’s been increasing confidence among some industry players to come out and indicate that we are at or near a bottom in prices. We’re not willing to make a call at this point, but our general feeling is that the bottom will form when we see that property which otherwise would have likely never hit [...]

Receivers In Demand

About a week ago, we posted an article about receivership. The LA Times today has an article out about the hot receivership market and the upswing in activity as projects falter (like this one).
It’s not a particularly captivating read, but if you’re interested, here is a link to the article.

Simon “Agrees” to $2.25B Note Sale

My, how far we’ve come. In less than twelve months, we have gone from capital crisis, to reading articles about how “Simon Property Group L.P. has agreed to sell $2.25 billion of its senior unsecured notes”.
Fine, fine, I’ll take your $2.25B.
[via Retail Traffic]

Tishman Walks on Stuy Town

Tishman Speyer and company has decided to throw in the towel on Stuyvesant Town. This comes as little surprise as they were so far under water on the deal that it would be rather meaningless for lenders to keep them in the deal. Tishman originally paid $5.4B for the asset back in 2006 and without [...]

California Unemployment Rate Hovers at 12.4%

Unemployment in California is sitting pretty steady, and now sits at 12.4%. December of 2008, the unemployment rate was a 8.7%. The job market continued to be extremely weak, with 80% of the states reporting an increase in unemployment.

The biggest sectors to lose jobs over the past twelve months are:

Construction, down 16.1%
Manufacturing, down 7.7%

The unemployment [...]

Fitch: Life Insurers To Face More Losses

Fitch is predicting that US Life Insurers (a la MetLife) may be looking at an additional $15B in commercial real estate related losses. The estimate is that they have taken about 25% of the losses thus far, and most of the losses will take place within the next two years.
The life insurers have already booked [...]

Bair: Bank Charge Offs Related to CRE Higher in 2010

The Chairwoman of the FDIC, Sheila Bair, indicated that the charge-offs will continue.
Federal Deposit Insurance Corp. Chairman Sheila Bair said in a speech that regulators expect banks to report higher delinquencies and charge-off rates for commercial real estate properties in the first three months of 2010. Speaking to the Commercial Mortgage Securities Association, Bair said [...]