So today I decided to go check out the grand opening of the Microsoft retail store at Simon’s Shops at Mission Viejo. I must say the store is impressive but the design does remind me of another retail store but I just can’t quite put my finger on which store that might be….. The store [...]
Oct
28
CRE Takeaways From Bill Gross’ Investment Outlook
Bill Gross, PIMCO’s revered managing director, has just published his most recent investment outlook. In it, he calls the end of the recent market rally and warns of a necessity to come to grips with the fact that a new normal is headed our way. The closing sentences sum up his point nicely and he [...]
Oct
28
Quick Comments on NYC Office Sublease Market
DealBook has an article up today about the office sublease market in NYC and the impact lower offering rates are having on space offered directly by building owners. Every time I read about NYC rents my head just spins. The numbers are just astronomical. According to the article, average asking rents for Class A office [...]
Oct
28
Vitamin Shoppe Completes I.P.O.
Vitamin Shoppe has just completed an IPO, raising about $155 million. You can read more about it at DealBook. What I thought was most interesting was the fact that this was first I.P.O. by a traditional retailer since December 2007! The proceeds from the offering are being used to pay down debt and to pad [...]
Oct
28
Buyer Requirement Email Done Properly
Yesterday I wrote a post about a buyer requirement email that was so all encompassing it was essentially useless to the author. This morning a new buyer requirement email landed in my inbox and, as luck would have it, the email was well targeted and gives me some good content for a follow-up post. If [...]
Oct
27
Buyer Requirement Email – What Not to Write
Below is the text of an email I received this morning from a broker seeking investment property submissions from the CRE community. The only problem is that the stated requirement is a buyer’s dream wish list and it warrants nothing more than an immediate “delete.” Here is the email: Please forward me available properties that [...]
Oct
26
CMBS Bonds Downgraded on Special Servicing Action
Standard & Poor’s had downgraded 15 classes of bonds backed by a $425 million loan secured against the Four Seasons Hotel in New York and 3 other luxury resort hotels. The action was triggered by a drop in cash flow which was 46% below S&P expectations. Surely, the expected cash flow figure had already been [...]
Oct
23
Fresh & Easy Display Ad Spotted in the Wild
This is just a quick follow-up post about Fresh & Easy. I mentioned in my last post about Fresh & Easy that I had recently heard radio advertisements for F&E. Well coincidentally, I spotted a Fresh & Easy skyscraper ad on the home page of 89.9 KCRW while looking up the name of a song [...]
Oct
22
A Few More Words on Vacancy Factors in CRE Underwriting
I wanted to make another quick point on CRE underwriting as it relates to vacancy. Some of the more “with it” sellers have begun allowing vacancy factors underwritten into their offering memorandums. What is often overlooked is the actual relation of the vacancy factor to operations. Often you will see a vacancy factor of 3% [...]
Oct
22
Is A New Underwriting Trend Emerging in CRE?
I received a marketing brochure today that, quite frankly, left me a bit shocked. The property is a multi-tenant retail building in a power center in Southern California. The shocking part of the offering was that the seller and broker were NOT attempting to capitalize income from the vacant suites. Maybe CRE practitioners are starting [...]
Oct
14
Dow 10K: Celebrating 10 Years of 0% Return
Here’s a great email I received from a friend at Citibank this evening: Dow 10K: Celebrating 10 Years of 0% Return Congratulations investors. The Dow has hit 10,000 on October 14th, 2009. You now have made officially 0 percent return if you invested in this index when the Dow first hit this magical level in [...]
Oct
08
Interesting Fresh & Easy Article
Below is an interesting article published by the Arizona Republic on Tuesday. Based on the published numbers of $267 million in first half sales from 130 stores, Fresh & Easy’s full year sales should be approximately $534 million or $4.1 million per unit. The average Fresh & Easy store is 14,000 square feet so their [...]
Oct
08
Vocal Attack on Realty Income
Realty Income, the publicly traded single-tenant REIT saw its share price drop 4.6% on a statement from hedge fund manager William Ackman of Pershing Square Capital Management. Mr. Ackman announced that his firm has taken a short position in the REIT citing concerns about the REIT’s portfolio. From the New York Post article: ….[Mr. Ackman] [...]
Oct
08
CREOBA Resorting to Shilling
This is getting out of control. The highly credible (cough) Commercial REO Brokers Association (CREOBA) has resorted to shilling as a counter to the negative press they have been receiving. If you read the comments to this post you can see the evidence for yourself. I wonder if these guys really thought that I wouldn’t [...]
Oct
07
Office Vacancy at 16.5%
Another post from Calculated Risk showing office vacancy rates since 1991. We are not as bad as we were in 1991 but it looks like we are heading there. Graph below from CR.