Business Specialties

“Stay alive till ’95” was a mantra for beleaguered commercial real estate interests back in the early ’90s, when various noxious economic ingredients made an ill stew for the industry. What’s a good mantra for today? Hard to say, since the noxious ingredients are a little different this time, and there’s also some feeling in the industry that the other shoe has yet to drop. The Federal Reserve’s Beige Book, which was released Wednesday, attested to the uncertainty. The report from the Sixth District (headquartered in Atlanta), for instance, noted that “commercial real estate reports were decidedly more negative than…

The prospect of un-refinanceable debt has yet another commercial property company on thin ice, in this case McLean, Va.-based Sunrise Senior Living. The assisted- and independent-living specialist not only lost $305.6 million in the fourth quarter of 2008 (and $439.2 million for all of 2008), it’s also facing an imminent–end of March–deadline on renegotiating about $95 million in debt and $24.4 million in outstanding letters of credit.In particular, the former Fountains portfolio, some 420 properties that Sunrise bought in 2005, is causing problems for the company. “The operating performance of these communities continued to deteriorate in the fourth quarter of…

“Too big to fail” has new meaning these days in the context of the never-ending black hole known as American International Group. The “too big” in this case is the insurance giant’s giant losses, which totaled $61.7 billion in 4Q08, a record. Just to give a little context, that much money is roughly equal to or greater than the gross state products of 12 states of the union–Hawaii, for instance, had a gross state product of $61.5 billion in 2007, according to the U.S. Bureau of Economic Analysis.“Public ownership of financial institutions is not a policy goal and, to the…

Warren Buffet’s annual letter to Berkshire Hathaway, published over the weekend, contains a number of interesting statements besides his opinion that the economy is in “shambles” and the hard numbers that show 2008 to have been the worst ever for his company. The letter will likely be long remembered for characterizing the systemic failure among large financial institutions like this: “Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.” Or, to put it another way, if you’re going to fail, fail big, otherwise the government isn’t going to bail you out. Another pithy observation from the Oracle of…

Every federal budget, even a proposed one, is like a big layered onion, with plenty for every interest group of every kind to complain about. President Obama’s first proposed budget in particular, since much of it represents a considerable departure from previous budgets, is likely to ruffle more than a few feathers. The man did promise change, after all. The National Association of Realtors is already not too happy about the suggestion, tucked away within the onion, that the federal tax code be charged when it comes to the mortgage interest deductions. The plan is to reduce the value of…

The equity markets yo-yoed back upward again after Federal Reserve Chairman Ben Bernanke (pictured) went to great lengths to assure Congress, and indirectly investors (who are traditionally a nervous lot) that the United States isn’t going to nationalize its financial system. He didn’t mention that the government might buy into big banks more extensively than before–40 percent is the figure usually given for Citigroup, for instance–but that isn’t nationalization. Maybe that counts as “sort of” nationalization. Some observers think the government is, despite assorted denials, on track to de facto nationalization. “The Obama administration is on track to nationalize the…

Don’t worry, we’re working on the problem, and don’t call it nationalization, please, said the most important U.S. financial regulators in a rare–unprecedented, in fact–joint statement on Monday. Actually, the text of the statement by the U.S. Treasury Department, the Federal Deposit Insurance Corp., the office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve went in part like this: “The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses.” How…

Sale-leaseback transactions, a popular way for a company with its own real estate to get a quick cash infusion while staying put in its digs, have been on the downswing for the last several months, but one wouldn’t know it looking at YRC Worldwide’s latest activities. The Overland Park, Kans.-based transportation service provider just signed sale and financing leaseback deals valued at $122 million with Richmond, Va.’s Estes Express Lines, only two months after having entered into a $150 million sale-leaseback agreement with NATMI Truck Terminals L.L.C. The transaction with Estes involves a group of YRC industrial facilities located across…

With an eye toward an investment market with drastically reduced pricing, CB Richard Ellis Realty Trust has joined the ranks of firms looking to buy. To that end, the REIT has announced its second public offering, with the goal of raising up to $3 billion to invest in commercial property in the United States and abroad. The offering will consist 90 percent of shared priced at $10.00, and 10 percent priced at equal to or higher than $9.50 per share. The common shares will be offered through CNL Securities Corp. until Jan. 20, 2011, unless extended. The REIT said it…

At a time when many big banks are reducing how much business they give to mortgage brokers, New York-based Carlton Strategic Ventures L.L.C.–the principal transaction group of Carlton–has formed a $300 million first mortgage joint venture with an institutional real estate investment firm that will originate first mortgage loans up to a 65 percent loan-to-cost ratio. CSV Mortgage Capital will be targeting first mortgage loan transactions across the country with a total transaction size of $20 million to $100 million. The venture will target borrowers who have an opportunity to acquire their loans from the existing lenders at a discount…