the Editors of Commercial Property Executive
Construction Loan Performance Not as Bad for Smaller Banks
The credit crunch and the downturn in the economy have had the inevitable negative impact on the real estate industry, leaving banks that have handed out construction loans facing their share of delinquencies and the like. On certain levels, however, the situation is far worse for banks with assets exceeding $50 billion or more, than smaller banks with assets under $1 billion, according to a new study involving federally insured banks by Oldwick, N.J.-based credit rating firm A.M. Best Company.For smaller banks, those with assets under $1 billion, the construction loan sector comprises a greater portion of business than it…
U.S. Bailout Ready, Europeans Rescuing Firms, Wachovia Deal Nears
The monster 110-page bailout bill has been finalized. The proposed legislation would allow Treasury Secretary Henry Paulson (pictured) to start buying bad mortgage-backed assets — or any other assets — from any firms at any price. Various strings have been attached, or at least they seem to be strings, including the government taking an equity interest in the companies it helps, and allowing the Treasury department to modify some of the troubled loans, partly by forgiving outstanding debt. Congress will vote on it in short order. Will it work? As a financial leap of faith, no one can say. Across…
Bush Addresses Nation, Urges Prompt Passage of Bailout Bill
Early this morning President George Bush addressed the American public from the White House. Speaking before a group of reporters, the President spoke in favor of swift passage of the bailout bill slated to be taken up by the House this morning.He stressed the “bipartisan” nature of the agreement and described the legislations as ” urgently needed to address a crisis in our financial system that threatens the entire U.S. economy.” He took the position that the bill as drafted would provide the “the necessary tools and funding to help protect our economy against a system-wide breakdown.” He also noted…
CBRE Snaps Up $50M of Retail near Charlotte
CB Richard Ellis Realty Trust, acting in a joint venture with Childress Klein Properties, has acquired nearly 296,400 square feet in the 470,300-square-foot Afton Ridge Shopping Center in Kannapolis, N.C., in a transaction valued at $50 million. Afton Ridge sits within a 260-acre master planned destination, serving as the mixed-use development’s retail segment. CBRE Realty Trust worked on the acquisition with CBRE Investors. Located at the intersection of I-85 and Kannapolis Parkway, about 25 miles north of Charlotte, Afton Ridge has a tenant roster that includes such national chain stores as Ashley Furniture, Best Buy, Dick’s Sporting Goods, Hallmark, Lane…
With FDIC as Midwife, Citigroup to Acquire Wachovia’s Banking Operations
In a transaction orchestrated by the Federal Deposit Insurance Corp., Federal Reserve and Department of the Treasury, Citigroup Inc. will acquire the banking operations of Wachovia Corp. According to Citigroup, the deal will make it the largest U.S. bank in terms of total deposits. The announcement by the FDIC noted that “Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC.” For a payment of about $2.16 billion in stock, Citigroup will acquire the majority of Wachovia’s assets and liabilities, including five depository institutions, and will assume…
Shanghai Mixed-Use Tower Breaks Ground
Skidmore, Owings & Merill L.L.P. have announced the groundbreaking for the White Magnolia Plaza in Shanghai. Skidmore, Owings & Merrill and their partner in the project, Shanghai Jinjang North Bund Realty Co. began construction on Sept. 26, having just recently received authorization for the plans from the Shanghai City Planning Administrative Bureau. The plans for the White Magnolia Plaza call for a 320-meter-high office building and two hotel towers to be built atop a mixed-use base and an underground parking facility. The development is located on a 57,000-square-meter plot of land on the Huang Pu River. Skidmore, Owings & Merrill’s…
JV Takes Boston-Area Properties for $28M
Taurus Investment Holdings L.L.C. and DivcoWest have acquired two properties in North Reading, Mass., from Teradyne Inc., for $27.5 million. CB Richard Ellis Inc. of New England arranged the transaction.The properties are two separate buildings in the Riverpark Office Park in the Boston suburb, located in Middlesex County. Riverpark is a one-million square-foot property with a total of seven buildings.One of the two buildings purchased is a 150,000 square-foot office building. The other is a 200,000 square-foot light industrial research and development facility.As part of the deal, Teradyne has arranged to lease back 50,000 square feet for five years. Teradyne’s…
House Says No Way, Market Plummets
In a shocking turn of events, the U.S. House of Representatives voted down the Bush administration’s proposed $700 billion financial system bailout package. The stock market tumbled in the wake of the news, with the Dow Jones index closing the day down a massive 778 points, its largest point drop ever.Hammered out in late night weekend meetings in a bipartisan effort among republican and democratic House and Senate leaders and administration officials, the “Emergency Economic Stabilization Act of 2008” aimed to stave off a crisis termed the greatest economic threat since the Great Depression. The vote was 227 to 206…
After the Closing Bell-Monday, Sept. 29
Bailout? The U.S. House of Representatives said, We don’t need no stinkin’ bailout. Just barely. Some Democrats and fewer Republicans voted aye; some Republicans and fewer Democrats voted nay. In the end, it was 228 against, 205 for. Predictably, the stock market tanked on word of the congressional cold shoulder. The Dow Jones Industrial Average ended down 777.68 points, or about 7 percent for the day. According to Bloomberg, about $1.1 trillion in market value–phantom wealth, that is–vanished. The Dow is now down 21.86 percent year-to-date. The tech-based Nasdaq took it on the chin as well, down 199 points, or…
GM’s New $349M Michigan Plant Joins Roster of Planned Car Manufacturing Facilities
Undeterred by the overall decline in the auto industry, General Motors has announced plans to develop a 552,000-square-foot plant in Flint, Mich. where it will manufacture engines for its Chevrolet Volt line of fuel efficient vehicles. GM will shell out $349 million to construct the facility and another $21 million for vendor tooling to back facility operations. The new plant will sit about an hour from GM’s Detroit-based global headquarters, which the company acquired from its landlord for $626 million in May. GM considered building the Volt plant at other locations around the country, but overseas sites were not among…