the Editors of Commercial Property Executive
Unsecured $372M Federal Realty Loan a Rarity in Today’s Credit Market
Despite credit still playing hard-to-get, several REITs have recently managed to get their hands on sizable financing deals. The latest firm to add its name to the list of firms receiving funding is Federal Realty Investment Trust, which just closed a new $372 million unsecured term loan facility. Less than two weeks ago, CPN reported that H&R Real Estate Investment Trust secured C$425 million in financing to complete construction of a 58-story office tower in Downtown Calgary, Canada. The 42-month financing was provided by a syndicate of lenders led by RBC Capital Markets and TD Securities. On Tuesday, ProLogis closed…
Economic Update – Developers Plan for Eventual Rebound
In light of the current doldrums for both commercial and residential real estate, what’s a developer to do? Be ready for the eventual turnaround, if possible. Development is typically a multi-year activity, after all. It also helps to plan your project in an area that’s more economically resilient than many others, due to relatively high household income. This week the village council of Winnetka, Ill., an affluent northern suburb of Chicago, granted approval of a 167,800-square-foot mixed-use development downtown. Construction won’t begin for at least a year on the project’s 31 condos and 35,300 square feet of retail or other…
LaSalle Looks South of Border with $300M Fund
The economic crisis has gone global, but real estate investors with funds on hand are still plunking down cash in desirable markets like Mexico, where LaSalle Investment Management will invest heavily through a new fund. Launched in 2007, LaSalle Mexico Fund just closed with $300 million in equity that, with leverage, will allow for the acquisition and development of $600 million in assets. “It is a good time to invest in Mexico given the continued demand for quality real estate in the Mexican market due to the favorable demographics and the existing inventory,” Eduardo Güémez, CEO Mexico, LaSalle Investment Management,…
Filene’s Basement Becomes Latest Retail Chain to Go Bankrupt
Another victim of the country’s shattered retail market, popular discount fashion store Filene’s Basement has filed for Chapter 11 bankruptcy protection, and has struck a deal to sell 17 of its 25 stores–including its flagship destinations in Boston and New York City–to Crown Acquisitions and The Chetrit Group for $22 million. The writing has been on the wall for the century-old Filene’s for quite some time. The bankruptcy filing comes just two weeks after Retail Ventures Inc. sold Filene’s to an entity formed by the Buxbaum Group, citing the chain’s considerable liquidity challenges. Even before the change in ownership, 11…
Economic Update – The Week Starts with Some Good News
Is that the glimmer of good economic news ahead, or just a mirage? Time will tell, but for the moment it’s good to know that the pending home sales index rose 3.2 percent in March when compared with February, and 1.1 percent when compared with the same month a year ago, according to the National Association of Realtors. Not only that, the U.S Department of Commerce reported that construction outlays rose 0.3 percent in March compared with February, an uptick no one was expecting. The largest gain was in nonresidential construction, which scored a 2.7 percent increase. Public works was…
Undeterred by Grim Conditions, Sovereign Wealth Funds Eye U.S. Real Estate
The U.S. commercial real estate market, plagued by high vacancies and declining property values, is not at its most appealing right now, but according to a new report by Deloitte, sovereign wealth funds are beginning to see a great opportunity for investment.Entitled Sovereign Wealth Funds: Real Estate Partners in Growth?, the report concludes that for SWFs, the acquisition of commercial real estate in the U.S. today has its benefits, including the opportunity to circumvent currency depreciation and take advantage of capital appreciation upon a turnaround of the market. For a bevy of other reasons, SWFs, government entities charged with investing…
Economy Can’t Stop Retrofit Trend
Despite the widespread financial challenges presented by the debilitated economy, commercial property owners continue to invest in retrofitting their buildings today in order to achieve great savings tomorrow, and it seems the trend is only going to grow. According to a new report by Pike Research, comprehensive efficiency retrofits will increase in annual revenue three-fold to $6.6 billion by 2013.As noted in the report, entitled Energy Efficiency Retrofits for Commercial and Public Buildings,approximately 20 billion square feet of the country’s existing 70 billion square feet of public and private commercial building space is in need of major renovations, presenting a…
Economic Update — M-F Finance Deals Squeak Through
Things are looking up a little for the U.S. apartment market, if the latest quarterly survey by the National Multi Housing Council, which queried 79 CEOs and other senior executives of apartment-related firms nationwide, is any indication. That isn’t to say that conditions are strong in the multi-family rental segment–just better than in the early dark days of the Panic of 2008. The NMHC’s sales volume index, for instance, is at 30 as of April 2009, a considerable improvement from the October 2008 dismal reading of 4. A sales volume index reading above 50 means that sales volume around the…
CMBS Sector Sees Jump in Special Servicing Loans
CMBS loan delinquencies and defaults are pushing up special servicing volume at a blistering pace, according to a pair of first-quarter updates published last week by Fitch Ratings. During the first three months of 2009, the balance of loans rated by Fitch in special servicing jumped 48 percent to $23.7 billion, representing 758 loans. Imminent default was cited as the reason for 73 percent of the special-servicing transfers as measured by unpaid loan balances. That trend picked up the momentum from 2008, when specially serviced loan balances ballooned 248 percent to $16 billion. Since the end of 2007, the percentage…
Net Lease Deals Surge in Q1 as Prices Slide: Boulder
At least one category of commercial real estate investment is enjoying a surge in activity, though not in pricing. Net lease transactions rose several hundred percent for all three major net lease property sectors during the first quarter compared to the last three months of 2008, according to a study by Boulder Net Lease Funds L.L.C. The number of industrial net lease properties trading in January, February and March jumped 464 percent compared to the previous quarter, an increase Boulder described as “astounding.” Perhaps more remarkable, industrial net-lease trades rebounded from a fourth quarter during which sales had hit their…