the Editors of Commercial Property Executive
New Report: CRE Pricing Continues to Stumble
As the economy continues to struggle, commercial real estate prices remain on a downslope. 2008 saw negative price growth across all indices, the first time on record dating back to January 2001, according to the latest report from the Moody’s/REAL National All Property Type Aggregate Index from Real Estate Analytics L.L.C., the latest in a series of worrisome idicators for the industry released over the past week.The report’s index measures 164.00 for November–a decrease of 3.4 percent over the previous month–making it the second largest monthly decline in the history of the index. Representing a decline of 14.5 percent over…
MBA Finds Short-Term Floating-Rate Loans Top 2009 Maturities
The Mortgage Bankers Association’s analysis of loan maturity volumes has determined that while concerns about a large volume of loans maturing this year are valid, the majority of those loans are short-term floating-rate CMBS and mortgages held by credit companies, warehouse facilities and other investors. Other loans, including fixed-rate CMBS, mortgages held by life companies and multi-family mortgages held or guaranteed by the general-services enterprises are in the minority. Indeed, of the $171 billion, or 11 percent of non-bank commercial and multi-family mortgages coming due in 2009, just $19 billion are fixed-rate CMBS, noted MBA vice president of commercial real…
Green Lending Picks Up Despite Credit Market Woes
At a time when securing a real estate development loan is an uphill battle, ShoreBank Pacific has decided to pave the way for those builders who are dedicated to eco-friendly development. With the establishment of its new Green Building Loan Program, the bank has joined the ranks of those financial institutions that are making an extra effort to step up the support of green commercial development in the midst of the credit crisis. “The only people who are going to build today are, one, very serious builders–no one’s building on spec unless they’re idiots–and, two, people with a fair amount…
Big Week Ahead for Federal Intervention
On Friday, the U.S. Department of Labor reported that nearly 600,000 people lost their jobs in January, the most since the slumping economy of 1974. That report is expected to give further impetus for federal invention in the economy, and this week’s events aren’t likely to disappoint in that regard. First, there’s TARP II: The Obama Administration’s Turn on the horizon, which has been in the works since the election. Official word on the direction of the second tier of last fall’s bailout package will come on Tuesday, and as ever, banks are hopeful that more money will come their…
Another NYC Project Delayed as Recession Continues to Hammer Office Sector
Just days after news broke that Manhattan’s $1 billion Hudson Yards project would be delayed, another major development in the city has been put on hold as a result of the economy’s continuing struggles. Boston Properties Inc.’s $980 million 250 West 55th St. saw one of its major planned tenants scrap plans to relocate to the 1 million-square-foot tower, forcing the developer to suspend construction. The delays are two of the most visible signs yet of just how much the office market has been battered by the recession, which is eroding tenant demand and limiting financing options for owners.Boston Properties,…
Economic Update — A Bottom in Sight for Retail?
Is it good news when things aren’t getting worse any faster? When it comes to retail sales in the United States and the retail real estate industry that depends on it–both of which have taken terrific beatings lately–maybe so. According to the most recent survey of 40 major U.S. retailers by consultancy TNS Retail Forward, January same-store sales declined 1.4 percent, a bit better than the 1.5 percent decline the company reported in December and down from the 1 percent gain reported in January 2008. “It isn’t an improvement–it would be too soon to expect that–but the rate of decline…
Report: CRE to Continue to Be Hobbled by Economic Doldrums
As the world economy continues to slump, commercial real estate assets are likely to see rents fall and vacancies rise throughout 2009, according to a new report issued by NAI Global. At a conference on Thursday morning to discuss the report, Jeffrey Finn, NAI Global’s president & CEO, said vacancy across all product types worldwide could increase by 150 to 200 basis points as the year progresses, with rental rates falling in the 10 to 20 percent range. “It will be late 2009 to 2010 before we are going to see the beginning of a resurgence,” Finn said. In a…
As Retail Woes Continue, CVS Among Few Firms Expanding
With retailers across the country closing stores and filing for bankruptcy in the face of a weakening economy, CVS pharmacy is among the few bucking that trend. The firm is making plans to accommodate growing distribution demands with the development of a new 750,000-square-foot facility in Chemung, N.Y. The project carries a price tag of $90 million to $100 million. Circuit City, KB Toys, Linens ’n Things and Mervyns are among the many retail companies that have had to shut their doors as the economy continues its tailspin. As per a report by Marcus & Millichap Real Estate Investment Services,…
Despite Challenging Times, Firms See Opportunities for Growth
While the recession continues to advance, some real estate companies are finding opportunities to do business. Most recently, HEI Hotels & Resorts, identifying some softening in hotel prices, has thrown its hat into the ring, with plans to shell out billion of dollars this year on acquisitions and developments.HEI Hospitality Fund III L.P., a fund of HEI Hotels & Resorts, has approximately $500 million in equity, and in spite of the gloomy economy, plans to purchase and build between $1.5 billion and $2 billion in hotels and resorts over the next two years.Steve Mendell, HEI’s executive vice president of acquisitions…
$1B Hudson Yards Latest Development Hung Up by Rough Economy
The gloomy economy has caused yet another hiccup for a major development project. The Metropolitan Transportation Authority revealed that the partnership period of conditional designation with Related Cos. and Goldman Sachs, the team the MTA selected to develop the $1 billion Hudson Yards project in New York City, has been extended one year beyond its originally agreed upon finalization date that was not to exceed Jan. 31. The announced delay involves the contract, not the development of Hudson Yards, as a construction schedule was never set. “We’re still moving through the government and zoning approval process so we can’t set…