Business Specialties

As a sale looms for Lehman Brothers Inc., the effect of the bank’s possible demise on commercial real estate finance remains hazy, according to some veteran market-watchers. “I’m not sure how much of a direct impact that’s going to have,” commented Dan Fasulo, managing director for Real Capital Analytics Inc. Lehman’s disappearance would have little effect on the securitization market, which has been almost nonexistent this year, he noted. Instead, the impact on the real estate capital markets would probably be indirect; Fasulo speculated that Lehman’s impending fate could increase worries about the capital market’s stability that could nudge up…

Even with REITs’ stock prices going every way but sideways over the past week, Kimco Realty Corp. has set the pricing of its public offering of 10 million shares at $37.10 per share. Kimco estimates its net proceeds at about $356.5 million, or up to $410 million if the underwriters exercise their option to purchase up to 1.5 million shares to cover any over-allotments. Kimco owns and operates the nation’s largest portfolio of neighborhood and community retail centers. As of the end of the second quarter, it owned interests in more than 1,900 properties comprising 180 million square feet of…

With the completion of $420 million in unsecured and secured financing deals involving four retail assets, Pennsylvania Real Estate Investment Trust has been able to repay the $400 million outstanding balance on a real estate mortgage investment conduit that was cross-collateralized with 15 properties. The Philadelphia-based company had assumed the REMIC, which carried an annual interest rate of 7.43 percent, in relation to its $1.3 billion acquisition of Crown American Realty Trust in 2003.  As for the secured loans, PREIT attained a total $290 million on four properties. The company received a $97 million non-recourse mortgage loan through Newark, N.J.-based…

Lehman Brothers Holdings Inc., after posting its largest quarterly loss in its 158-year company history–some $3.9 billion, or $5.92 a share–has unveiled plans to spin most of its commercial real estate assets off into a new and separate public company. The move is part of a larger effort by the beleaguered investment bank to turn its fortunes around that also includes selling most of the firm’s asset-management unit and cutting its dividend to five cents a share from 68 cents a share. The plan to spin off commercial real estate to Lehman shareholders will involve roughly $25 billion to $30…

Houston-based Hartman Income REIT has completed a $67.6 million facility with an affiliate of J.P. Morgan with the dual intent of consolidating debt while taking advantage of a weakened real estate market for more acquisitions. “We are very gratified to have this transaction go through given the state of the current economic environment,” firm president Al Hartman (pictured) told CPN. “It is a testament to the solidity and stability of Hartman Income REIT to close on a transaction of this size.” The debt was structured by Tom Melody and Bernard Branca of CBRE | Melody on behalf of the commercial…

The federal government’s takeover of Fannie Mae and Freddie Mac is a necessary step to stabilize the U.S. housing market, according to industry experts who are still examining the ramifications of the announcement. The takeover will go a long way toward solving what Stuart Saft, partner in the law firm of Dewey & LeBoeuf called a “catch 22” that has been bedeviling a critical part of the economy, housing. Real estate, being an illiquid asset, needs a steady stream of capital inflows. The credit freeze-up has meant that home prices have fallen, thus causing lenders to be much more cautious…

Buzz about a possible sale of Lehman Brothers escalated today after a top official at state-owned Korea Development Bank confirmed that KDB was trying to form a consortium with private banks to buy a stake in the troubled investment banking firm. Several news reports out of Seoul quoted Min Euoo-sung, CEO of KDB, as saying talks about Lehman Brothers were ongoing but were running into problems over prices. Min, who had been head of Lehman’s operations in Seoul until joining KDB in June, did not indicate how much of a stake a the consortium would seek. But Britain’s Sunday Telegraph…

As a second summer of discontent for the capital markets draws to a close, finance experts are eyeing a new category of player that is helping fill the void. “The hedge funds are here to stay for the foreseeable future until the capital markets fix themselves,” declared Cliff Mendelson (pictured), a senior managing director for Transwestern’s structured finance group. Strictly speaking, of course, hedge funds are hardly newcomers to commercial real estate; the real novelty is their higher profile. It is no secret that hedge funds have taken a stepped-up role in providing mezzanine debt, preferred equity, and other products…

Net-lease sales may be down from those easy-credit days before the summer of 2007, but Howard Sands, founding principle of Los Angeles-based Corporate Partners Capital Group Inc., thinks that the lower deal volume still includes a good many relatively healthy net-lease transactions. As both sellers’ and buyers’ expectations come closer together, the market is approaching a new equilibrium, he says. Sands’ own company, which engages in both single-asset and portfolio net-lease transactions, has been an active participant in the market itself recently, typically buying one-off net-lease properties ranging from $5 million to $100 million and portfolios of up to $300…