the Editors of Commercial Property Executive
CMBS Delinquencies Speeding Up: Fitch
Back in January 2008, long before the capital markets took their astonishing twists, Fitch Ratings made a sobering prediction: By the end of the year, its CMBS loan delinquency index would be double or triple the 0.28 percent recorded at the end of 2007. Fitch’s crystal ball turned out to be right on the money. On Friday the ratings agency reported that CMBS delinquency reached 0.64 percent for November. At this pace, Fitch projects that CMBS delinquencies could hit 2 percent by the end of 2009.A bad month or two does not necessarily make a trend, and Fitch often notes…
Report: Manhattan Trophy Offices Lose Some Luster
Weakening economic conditions in Manhattan’s office sector have begun impacting average asking rents for the city’s trophy-quality office buildings. According to a recent report from Jones Lang LaSalle, Manhattan’s top-end properties have seen average asking rental rents decline 6.2 percent, falling to $102.84, from $109.61 per square foot in the spring of this year. Rents overall continued to move higher throughout the summer months, even though vacancy rates had risen consistently since the beginning of the year. Midtown’s high-end buildings saw rates fall slightly more than 4.4 percent during the same time period, dropping to $117.46 per square foot from…
Wynn Opens $2.3B Resort in Las Vegas
Despite a crummy economy, Wynn Resorts Ltd. opens its $2.3 billion, 2,000-room Encore tower of bronze glass adjacent to sister property 3-year-old Wynn Las Vegas luxury casino hotel, Reuters reported. Meanwhile, shares of Wynn Resorts have fallen about 66 percent since February as the casino industry has grappled with tight credit markets and a downturn in gambling demand, according to the report.U.S. stocks were poised for a lower open on Monday as investors shrugged off the government’s announcement on Friday of an auto bailout and prepared for the latest housing data, according to CNNMoney.com. Despite the President’s announcement to give…
A Bailout for Commercial Real Estate?
“Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans,” reads a letter from a dozen commercial real estate trade groups to Treasury Sec. Henry Paulson, according to the Wall Street Journal this morning. In other words, the commercial side of the business, long perceived as relatively healthy compared with the residential side, is warning of dire straits ahead unless refinancing money is available in the near future. Money from where? The new $200 billion bailout recently cooked up by Paulson (pictured) and his people to infuse liquidity in the student, car and credit-card…
ProLogis Buy Eases Debt Squeeze on European Unit
Facing a looming CMBS debt maturity next summer, ProLogis European Properties is getting some much-needed breathing room from its corporate parent. In a deal valued at about 43 million euros, or $61 million, Luxemborg-based PEPR is selling ProLogis a 20 percent share of a private investment fund. The move is the latest in a series that ProLogis has taken since last month to shore up its financial position, Jan Svec, a director and REIT analyst for Fitch Ratings, told CPN. “It’s in [ProLogis’] best interest to make sure that PEPR continues to function,” she noted. PEPR holds Europe’s largest portfolio…
Ventas Sells 5 Senior Housing Facilities to Emeritus for $62M
Ventas Inc. has sold five senior housing assets with a total of 432 units to Emeritus Corp. for $62.5 million. Emeritus had been leasing the facilities, located in four states, from Ventas. The Chicago-based healthcare REIT also announced Monday that it had agreed to sell Samaritan Hospital in Lexington, Ky., to the University of Kentucky for $35 million in an all-cash transaction. If completed, Ventas expects to gain approximately $18 million from the sale. The transaction could close in the first quarter of 2009. As reported Aug. 4 by CPN, the sale of the five assisted living communities to Emeritus…
Next Century Plans $2B Mixed-Use Project in Los Angeles
Next Century Associates has unveiled a proposal to build a $2 billion mixed-use property in Los Angeles’ Century Plaza, on the current site of the Century Plaza Hotel. The redevelopment proposal entails razing the 19-story hotel and replacing it with a pair of towers. One of the towers will be primarily residential, containing 130 luxury condominiums, while the other will feature a 240-room hotel and 163 hotel residences. The project will also include 100,000 square feet of office space, 106,000 square feet of retail and restaurants (pictured), plus a spa and a fitness center.Developer Next Century Associates is a partnership…
GVA Opens First Southwest Office in Austin
GVA Advantis has opened its first Southwest office in Austin, Texas. The new location will serve as the headquarters of the firm’s newly formed land services group.Bruce and John Endendyk, a father and son team, who will lead the new office, will concentrate on selling land to investors and developers, including parcels that are not zoned and property that is available for immediate use. The Endendyks are already embedded in land sales throughout the Texas market and will eventually expand into a full-service branch to address additional client needs. Most recently, Endendyk and his team were a part of the…
First Industrial Gets $110M Loan for CalSTRs JVs, Discontinues European Operations
First Industrial Realty Trust Inc. has obtained a new $110 million term loan facility for its joint ventures with the California State Teachers’ Retirement System (CalSTRS), the second-largest public pension fund in the United States. The news came one day after the REIT said it was discontinuing its European operations as part of a cost-cutting measure. The Chicago-based REIT said Thursday that the three-year term loan is priced at LIBOR plus 2.75 percent. The loan could be expanded up to $275 million and allows for a revolving credit line of up to $175 million, for a total potential facility of…
General Growth Gets Extension on $900M Loan, Plans to Sell High-Profile Properties
Finally, another small tidbit of good news in the financial scene and this time, it is for one of the headline-grabbing commercial real estate companies–General Growth Properties. The publicly traded REIT said lenders for the $900 million Fashion Show and Palazzo mortgage loans has extended the deadline until Feb.12. In further efforts to reduce its outstanding debt, General Growth will put up for sale two of its most high-profile holdings, New York City’s South Street Seaport and Faneuil Hall in Boston, according to brokerage DTZ Rockwood L.L.C., which has been retained to market the properties. The company also put two…