This is just a quick opinion on the role assumable financing plays in the value of an investment property. It is very interesting that many properties are marketed with the assumable financing being a major benefit, when many times it really is more of a detriment or unattractive. Even worse is that some sellers believe [...]
Apr
20
No Debt Available For Good Deals? Correct.
Yesterday, John Reeder wrote a post on Marketwise titled "There’s No Debt Available, Even for Good Deals." In the post he pokes fun at the masses crying about the lack of available debt and makes the point that the only reason they can’t get debt is because the deals suck. This may be true for [...]
Mar
01
Sale/Leaseback Article from Phoenix Business Journal
This article published on Friday, February 26th, 2010 is quite possibly one of the worst articles you will ever read discussing the merits of a sale/leaseback transaction. I feel sorry for the brokers quoted in the publication. It feels like the author chopped up their quotes and used them where she thought best rather than [...]
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
02
Staying Alive – Blockbuster Gets a Lift
Blockbuster has secured $675 million in new debt (due in 2014) which will be used to pay off old debt. The loan is nice and cheap at an 11.75% interest rate and represents 94% of par value. Blockbuster is continuing its aggressive cost-cutting strategy in hopes that people will stop using the internet and go [...]
Oct
01
Calls From Appraisers Increasing – Banks Clearly Worried About Losses
Lately I have been receiving a high volume of calls from appraisers. Appraiser calls are nothing new. Normally, I receive a handful a month calling to ask questions about properties I have sold or asking for my opinion on a particular property they are trying to value. Now, I am receiving several appraisal calls per [...]
Sep
24
Citi Considering Reducing Retail Branch Count
Citigroup may be looking to sell or shut down some of its 1,001 retail bank branches in the U.S. and Canada. Citi wants to focus on their core markets of New York, Washington, Miami, Chicago, San Francisco and Los Angeles. DealBook has more here. Needless to say, this is not good news for capitalization rates [...]
Sep
23
S&P DowngradeS 4 Month Old Re-REMIC
Just saw this post on Zero Hedge about a downgrade of a recent Re-REMIC issue by Standard & Poor’s. re-REMIC’s are repackaged mortgage-backed securities of a supposedly more secure pedigree as they were to have been constructed of securities identified to be of better quality and thus less likely to default. Now, just 4 months [...]
Aug
31
OAKTREE PPIP PRIVATE FUND, L.P.
I have embedded a presentation from Oaktree Capital Management, L.P. outlining their strategy for participating in the PPIP program. It is quite interesting as it outlines their view of the investment opportunity presented through PPIP. One key item that caught my eye was their prediction that retail property capitalization rates will be 900 basis points [...]
Jul
27
The Diminishing Value of Appraisals
Retail News Blog put up good post this morning titled Capitalization Rates Without Market Activity which addresses the problem in the marketplace of determining property values with little or no market data available. With fewer and fewer sale transactions taking place, appraisers are left in the dubious position of valuing property without comparable sales data. [...]
Jul
23
CMBS Scandal – Standard & Poor’s No Longer Credible?
There have been a handful of blog posts and various articles written about the curious decision of Standard & Poor’s to upgrade several commercial mortgage backed securities (CMBS) to a triple-A rating just one week after downgrading those same securities to junk or near-junk status of double-B and triple-B minus. What is interesting is that [...]
Jul
23
Fair Warning
The Financial Times reported yesterday that Morgan Stanley and Wells Fargo have issued warnings that the trouble in the commercial real estate industry continues to mount. Some key points from the FT article: Morgan Stanley takes a $700 million CRE write-down in the 2nd quarter 3rd straight quarterly loss for Morgan Stanley Wells Fargo states [...]
Jul
22
Real Estate Advisory: The Buyer’s Guide to Distressed Real Estate and Loans
From an email I received from the law firm of McKenna Long & Aldridge LLP: The Buyer’s Guide to Distressed Real Estate and Loans Important Legal and Business Considerations for Buyers of Distressed Real Estate and Loans Due to the current state of the real estate market, the capital markets, and the overall economy, there [...]
Jul
17
Vineyard Bank And Temecula Valley Bank Fail
Vineyard Bank of Rancho Cucamonga, California and Temecula Valley Bank of Temecula, California have become the 56th and 57th bank failures respectively in the US this year. California Bank & Trust of San Diego, California will assume the deposits of Vineyard Bank and First-Citizens Bank and Trust Company of Raleigh, North Carolina will assume the [...]
Jul
17
Commercial Real Estate Refinancing Crisis
Nothing shocking here. Just a very well written and quantified report on the pending refinance crisis coming in commercial real estate. Some telling excerpts from the Deutsche Bank report (emphasis mine): While most attention in commercial real estate today is focused on the dramatic deterioration in term loan performance (i.e. the performance of loans prior [...]