Business Specialties

Sale-leasebacks may yet emerge as a star of commercial real estate investment in 2009 as corporate owners unload assets in order to generate capital. But if first-quarter trends are any indication, the asset-leaseback strategy is still a star in the making.Reckoned strictly by dollar value, sale-leaseback transactions for the first three months of the year appear to have picked up where they left off at the end of 2008. Total leaseback volume amounted to $663.8 million nationwide through March 31, less than $15 million short of the previous quarter’s tally, according to Real Capital Analytics Inc. Office properties topped the…

In the past few years, the young tenant-in-common industry has taken a major hit from the credit squeeze and the virtual disappearance of the commercial real estate securitization market. In recognition of changing times, the industry’s professional organization is adopting a new name and mission. Starting June 1, the six-year-old Tenant-in-Common Association will have a new name: the Real Estate Investment Securities Association. The re-branding reflects changing strategies among those who sponsor and sell tenant-in-common securities. “Right now, with the contraction in the tenant-in-common market, most of our members are moving into other products,” explained Bill Winn, president of Passco…

Over the weekend, the Sunday Times broke the news that London-based banking group HSBC is looking to sell various office assets, including its headquarters in the Canary Wharf district of London (HSBC Tower), property on the Champs Elysées in Paris and unspecified office buildings in New York. The Times said, without citing sources, that the company is hoping to raise about £2.7 billion (nearly $4 billion) from sale-leaseback deals.HSBC is thought to be relatively healthy among British banks, but not quite out of the woods, having spent a whopping $53 billion in the last three years to cover bad loans….

Commercial real estate defaults are predicted to continue their upward march for the foreseeable future as the industry groans under the weight of un-refinanceable debt and sagging property values. That’s why commercial real estate lobbyists are busy asking for–pleading for–five-year loans via the Term Asset-Backed Securities Loan Facility (TALF) for commercial real estate refinance, instead of the standard three-year terms. The difference, it’s hoped, will provide a bridge to a time when credit is easier to get and property values have recovered. Whatever TALF ends up offering the commercial real estate industry, that doesn’t mean that commercial property owners are…

Only a few years ago, it would have been just another bit of the M&A torrent, but these days the acquisition of homebuilder Centex by the even larger homebuilder Pulte Homes in a $1.3 billion stock-for-stock deal is considered a survival gambit. Small wonder: as separate entities, Centex lost $664 million in the quarter ended in December, while Pulte lost $338.2 million in its most recent quarter. One day, perhaps, the combined strengths of the two–somewhat different demographics in somewhat different parts of the country–might help the larger entity back to profitability. “By acting decisively now, we’re creating unrivaled firepower…

The deleveraging of the American consumer continued apace in February, according to the Federal Reserve. In the report published on Tuesday, the Fed said that consumer credit outstanding decreased $7.5 billion during the month to $2.564 trillion. That’s the sharpest monthly drop since the Fed started tracking consumer credit more than 40 years ago, and represents a seasonally adjusted annual decline of 3.5 percent. The inability to borrow may be a factor in the decline, but just as likely is the reluctance to borrow in the face of job fears and income loss–an entirely rational reaction. In any case, the…

As the single-family housing market went kaput, the multifamily market picked up the slack, but with the economy in a freefall, even the rental market is on shaky ground. However, multi-family REITs, according to Moody’s Investors Service, have shored up their operations in an effort to brace for the worst.The apartment sector is beginning to lose much of its luster, as increasing job loss chips away at occupancy rates. However, many multi-family REITs have taken various steps to protect themselves. Among the list of strategic moves pursued is the reduction of development activities, the decreasing of asset sales, the increased…

For some time now, commercial real estate defaults have been one of the other shoes waiting to drop on the economy, and that day may be closer at hand. Real Capital Analytics has reported that delinquent commercial real estate loans grew by 43 percent by the end of the first quarter of 2009 to $65.9 billion, compared with $46 billion at the end of last year.That hardly means that investment activity is going to grind to a halt, though. Indeed, one owner’s serious misfortune is another’s opportunity. A large (even trophy) example of that would be last week’s sale of…

A subset of the overall job loss numbers in March included the evaporation of 48,000 retail positions, according to the U.S. Department of Labor. That number, though large, is down considerably from the recent peak of retail job-cutting, which was 91,000 jobs in November of last year. The Labor Department tracks employment in 12 different kinds of retail operations, and of those exactly one category had any kind of employment growth last month–namely general merchandisers, which includes discounters. That category saw a net gain of 13,800 jobs in March. Aside from the discount sector, where are retailers looking for growth…

Staying liquid is job one for many equity REITs these days, and the lack of a CMBS or unsecured market makes that a formidable task. Most of the choices bring both answers and potential pitfalls at a time of unusual urgency, contends Fitch Ratings in a recent report. “In essence, the clock is ticking for REITs to maintain adequate liquidity,” the report stated. Of all potential sources of capital, bank lines of credit will be the leading source of liquidity for REITs through 2010, Fitch predicts. By the end of last year, revolving credit facilities represented 64.4 percent of the…