the Editors of Commercial Property Executive
Lehman May Accelerate Mortgage Asset Sales
Lehman Brothers Holdings Inc., in an effort to both staunch its massive losses and tap into a burgeoning market for commercial real estate debt, is reportedly exploring a strategy that would have it set up a company to acquire some of its mortgage assets. The company would be capitalized by other investors. The plan, which Lehman has not confirmed for CPN or any other media outlet, comes in the wake of a $2.8 billion loss for the company ($5.14 per share) in its second fiscal quarter of 2008, compared with net income of $1.3 billion for the second quarter of…
Healthcare REIT Snaps Up Wellness Centers in $100M Sale-Leaseback Deal
Four wellness centers operated by Life Time Fitness Inc. have come under the ownership of Senior Housing Properties Trust, courtesy of a $100 million deal. Life Time Fitness will continue to occupy the properties under a triple-net lease agreement through its subsidiary, LTF Real Estate Co. The deal calls for the company to pay SNH rent totaling $9.1 million per-year, in addition to fixed increases over the life of the lease, which is scheduled to expire in 2028. The assets account for a total of nearly 460,000 square feet in Georgia, Illinois, Nebraska and Texas.Developed between 2005 and 2007 the…
Maguire Wraps Up $211M Orange County Office Sale
Los Angeles-based Maguire Properties Inc. has closed the disposition of Main Plaza, selling the 607,000-square-foot trophy office complex in Irvine, Calif., to Shorenstein Properties L.L.C for $211 million including the assumption of $161 million of project level financing. The transaction reached completion two months after the parties entered into the agreement, and leaves Maguire with net proceeds totaling $48 million to be used for debt reduction and general corporate purposes. Maguire revealed in June that reducing debt through the sale of certain Orange County assets would be one component of its multi-faceted plan to revitalize the company, which has seen…
American Realty Closes $53M Deal For 39 Surplus Wachovia Branches
American Realty Capital L.L.C. has closed on a $53 million deal to acquire 39 bank branches from Wachovia Corp. Under an agreement to purchase Wachovia’s surplus bank branches, American Realty plans to buy more than 70 branch Wachovia locations over the next year.Of the 39 branches, 15 have sold primarily to financial institutions. Four more will be leased to banks. In a prepared statement, Nicholas S. Schorsch (pictured), CEO of American Realty said that many commercial banks are returning to retail banking to build their depository bases, provide fee-based services to depositors, borrow FDIC-insured funds at low rates and lend…
SoCal Lender Kicks Off Another $100M Mortgage Pool Fund
Los Angeles-based Wilshire Finance Partners has introduced Wilshire Income Fund II, its second real estate mortgage pool fund. The fund will raise $100 million to make commercial property loans. This time around, however, the company will be able to welcome investors and borrowers from beyond the borders of the State of California. Wilshire Income Fund II, like the first vehicle, is designed to tap into a market hungry for alternative lending sources in the face of a credit crisis and diminishing property values. The fund consists of several well-underwritten trust deed loans; investors purchase shares of the fund, and money…
Equity Residential Gets $550M Loan
Chicago-based Equity Residential Inc. has closed on $550 million in financing, putting up 15 of its multi-family properties as collateral. Originated by Wells Fargo for repurchase by Fannie Mae, the secured interest only loan has an all-in effective interest rate of about 6 percent and matures in 11.5 years, the first 10.5 of which will carry a fixed rate, with the final year carrying a floating rate. Equity Residential will lump the $550 million with $1.4 billion in unsecured revolving credit and $145 million in unrestricted cash to use for its 2008 and 2009 funding requirements. Details on the properties…
Fire Brought Down 7 WTC: Report
At a technical briefing this week, Shyam Sundar, lead investigator for the federal building and fire investigation of the World Trade Center disaster conducted by the National Institute of Standards and Technology, revealed in detail how fire brought down the 7 World Trade Center building. The reports conclusions were first announced last week. The collapse had been the source of much speculation as no planes hit the building, which appeared to collapse much the same way one would have had charges been set to bring it down in a controlled fashion. According to NIST, “There was damage to the building…
New Real Estate Securities Firm Comes to the Fore
Five X Securities Inc. has just come on the real estate securities scene with industry hotshot Daniel Young at the helm. Young, former president & CEO of NFP Securities of Austin, Texas, will operate the new start-up from Oakton, Va., home base to its first client, multi-family real estate investment and operating company Mission Residential L.L.C. Five X will join forces with leading real estate sponsors like Mission Residential to unearth prospects, predominantly in the apartment sector, for starters. “We’re going to have several different vehicles, private and public,” Young (pictured), who carries the title of Five X principal &…
Trumbull Fund Refis $207M in Properties
Taking advantage of a good interest rate, Trumbull Property Fund refinanced six Class A multi-family properties throughout the country as part of a $207 million refinancing effort. The Hartford office of Holliday Fenoglio Fowler L.P. secured first mortgage financing totaling $206.99 million for six Class A multi-family communities–a total of 2,157 units–located in Chula Vista and Orange, Calif.; Atlanta; Chicago; and Durham, N.C.HFF senior managing director Dana Brome (pictured) worked exclusively with UBS Realty Investors in arranging the five-year, fixed-rate loans through MetLife Real Estate Investments on behalf of the Trumbull Property Fund. “This was a refinance deal and our…
Grubb & Ellis’s Bach: Construction Costs May Be at Peak
The soaring cost of construction, spurred in recent years especially by the rising cost of inputs into the process–the energy needed, the costs of raw materials and so forth–may be at its peak, according to Robert Bach, senior vice president & chief economist at Grubb & Ellis Co., in his most recent Weekly Market Insight.The most recent such price-spur came early this summer as oil hit record levels, but nevertheless Bach expects that construction prices will level off or even fall in the not-too-distant future. As of mid-year 2008, according to the Bureau of Labor Statistics and Grubb & Ellis,…