Finance

One rippling effect of mall behemoth General Growth Properties’ bankruptcy may be that it will help re-establish something that’s been missing from much of the commercial property investment market for a while now: pricing.Sellers have been sitting on the sidelines, and so have buyers, waiting. GGP can no longer warm the bench regarding the disposition of at least some of its properties now. The market will thus ascertain those prices, probably to the benefit of healthier REITs and other major potential buyers, such as Simon Property Group or Vornado. High-profile bankruptcy sales may not be the only way for commercial…

“Forbearance into foreclosures” was how the Wall Street Journal characterized prospects for the commercial mortgage-backed securities market over the coming years, when many billions of loans underlying CMBS will come due–$22 billion of which will be this year and next. For now, banks have been extending maturities in hopes of some kind of recovery in underlying asset values. But how long they will keep doing that is an uncertainty. It isn’t just a U.S. problem, either. Rating agency Moody’s Investors Service said this week that it might cut ratings for ¥1.4 trillion ($14 billion) worth of Japanese CMBS. Roughly ¥1.72…

On Tuesday President Obama spoke of “glimmers” of hope for the economy, while Fed chairman Ben Bernanke, speaking separately, also waxed a tad optimistic by noting that there are “tentative signs” that the decline of the U.S. economy is slowing. Bernanke also said that the U.S. is faring better than other train-wreck economies around the world, though he was too diplomatic to put it quite that way, or name any names. The glimmers of hope might not apply to the retail industry just yet. Also on Tuesday, the U.S. Department of Commerce reported that retail sales were down 1.1 percent…

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…