Business Specialties

After U.S. Treasury Secretary Timothy Geithner detailed plans to haul off about $1 trillion worth of the banking industry’s toxic assets on Monday–euphemistically called “legacy assets” by the government–the equity markets seemed happy about it. And about the fact that bond-fund giant Pimco, as well as BlackRock Inc., Colony Capital and others, have all said they would participate in the plan. Or maybe investors were buying stocks because everyone else is buying. In any case, the Dow Jones Industrial Averages shot upward to the tune of 497.48 points, or 6.84 percent, while the S&P 500 was up 7.08 percent and…

No details until later on Monday, but the latest federal government effort to apply Drano to the credit markets will be called the Public Investment Corp. (to be commonly known as PIC?). PIC will be funded by part of the original $700 billion bailout passed by Congress, along with Federal Reserve and Federal Deposit Insurance Corp. resources, with the aim of sucking up toxic assets from the banking system. If that sounds familiar, it is. It’s like the original intention of the bailout bill as passed, but later abandoned. The government will also try to encourage private investors, especially through…

A dearth of financing for acquisition and development has plagued commercial real estate and the general economy for the better part of two years. But a study by the Mortgage Bankers Association published late last week suggests that commercial real estate lending actually started increasing at the end of 2008. “Counter to what many expected, investors increased their holdings of commercial and multi-family mortgages during the fourth quarter,” said Jamie Woodwell, MBA’s vice president of research, in a statement accompanying the report. “Banks, thrifts, Fannie Mae, Freddie Mac, life insurance companies and other lenders extended additional credit to the market…

Beleaguered Freddie Mac is still making loans and Capmark Finance Inc., closing deal after deal, is actively paving the way for its clients to be on the receiving end of the funds. In separate transactions, the real estate loan servicer recently originated a total of approximately $63.9 million in permanent debt for two multi-family properties located in Philadelphia and Pembroke Pines, Fla. Acting on behalf of BR Penn Realty Owner L.P., Capmark secured $33 million for the refinancing of the 265-unit apartment community at 640 N. Broad St. (pictured) in Philadelphia. The ownership acquired the property, originally erected in 1913 as…

The current wave of bankruptcies, especially among retailers, has created one of today’s biggest headaches for single-tenant landlords. As Congress considers modifying elements of a four-year-old bankruptcy law, debate is heating up over whether to extend the 210-day period tenants can take to assume or reject existing lease terms. The demise of Circuit City, which shuttered the last of its remaining 567 stores earlier this month, has helped bring the issue to a head. In a move that could have far-reaching implications for troubled net lease tenants and their landlords, Rep. Jerrold Nadler, a New York Democrat, is proposing legislation…

Securitization took center stage last week in a debate that appears likely to ease the accounting standards that some claim were partly to blame for the CMBS freeze. Former Commercial Mortgage Securities Association president Lee Cotton told House members Thursday that current fair-value accounting standards work in a normal, functioning market. “However, CMSA strongly believes that the (fair-value accounting standard), as currently implemented, has negative unintended consequences when the markets are illiquid and/or highly volatile,” Cotton said, speaking at a hearing of the subcommittee on capital markets, insurance and government-sponsored enterprises. He asked accounting policy makers like the U.S. Securities…

It could be that executives of insurer American International Group (lately known as the “Notorious A.I.G.”) have been living on Neptune during the last six months, and haven’t heard that large bonuses are passé. More likely, a sense of entitlement, built up over years of being too big to fail, is too big to let a thing like taking $165 billion in guarantees from the federal government get in the way of bonuses. Which only total $170 million, just a bit above 1 percent of the bailout total (so far), after all.Various members of the Obama administration and Congress took…

Commercial and multi-family loan delinquencies increased during the fourth quarter of 2008, as the contracting economy and continuing credit crisis stressed property fundamentals, according to the “Commercial/Multi-family Delinquency Report” released by the Mortgage Bankers Association.The report found that the 30+ day delinquency rate on loans held in CMBS rose 0.54 percentage points to 1.17 percent. The 60+ day delinquency rate on loans held in life insurance company portfolios rose 0.01 percentage points to 0.07 percent. The 60+ day delinquency rate on multi-family loans held or insured by Fannie Mae rose 0.14 percentage points to 0.30 percent. The 90+ day delinquency…

As the recession grinds on, the retail world seems to be dividing more clearly than ever into winners and losers. Or maybe that should be a three-part division: über-winner Wal-Mart, relative winners and serious losers. As reported previously by CPN, Circuit City closed its doors forever last weekend, and thus became an example of a major loser. But does that make its rival and one-time electronics upstart Best Buy a winner? Wall Street, at least for the moment, thinks so. Best Buy shares, enjoying various upgrades by rating agencies, far outpaced the general upward movement of share prices on Tuesday…

Will TALF–the Term Asset-Backed Securities Loan Facility, in case anyone’s forgotten–bring the securitization of loans, especially non-agency RMBS and CMBS, back to life in any meaningful way? The program will get under way on March 25, and Wall Street is keeping a close eye it. And so are players in some real estate niches that used to obtain much of their capital from securitizations.”Over 70 percent of loans in the tenant-in-common business were originated through securitized product, and when that evaporated last year, it created a great hardship for TICs,” Bill Winn, president of the Tenant-in-Common Association and president of…