Finance

Yet another deep-pocketed real estate entity has jumped into the grave-dancing game—only please, don’t call it that, but rather strategic investment in distressed properties. The player is a newly formed investment company called Starwood Property Trust Inc., a creation of Starwood mogul Barry Sternlicht, which filed with the Securities and Exchange Commission late last week for a public offering that aims to raise half a billion dollars to do the distressed-property boogie. It will invest in not only physical properties, but mortgages and mortgage-backed securities. “We believe that the next five years will be one of the most attractive real…

After seeing phenomenal commercial mortgage originations in 2006 and 2007, figures from 2008 show a 65 percent decrease in volume, according to the Mortgage Bankers Association’s 2008 commercial real estate/multi-family finance report. “This is an important sign of the capital availability,” Jamie Woodwell, MBA’s vice president of commercial real estate research, told CPN. “While in 2006 and 2007, there were lots of loans being done very quickly, what this is showing is that there are fewer loans that are also probably taking longer to do.” If someone is looking to go into the market to borrow, it is important to…

May comparable-store sales numbers are filtering down from various retailers, and the results aren’t inspiring confidence in the prospects for recovered consumer spending. Actually, most analysts expected average retail same-store sales to decline in May 2009 when compared with May 2008, but the trouble was they declined more than expected. On average, comps were down 4.8 percent in May at the 30 major retailers tracked by Thomson Reuters; analysts had predicted a 4.1 percent drop. In today’s climate, a decline of more than expected = bad news, while a decline of less than expected = good news. Target Corp., for…

The bad news is, the United States is in a Great Recession and the commercial real estate market is likely to feel continued pain during the next two years as corporate cutbacks result in weaker fundamentals. The good news is, the public equity markets have been improving in the past few months, with returns bouncing back substantially and multiples back down to more reasonable levels as the market has responded to REIT success at raising capital through secondary offerings. In fact, the re-equitization of the market—with about $12 billion worth of common stock raised–has been extremely helpful to the market,…

Despite the fact that widespread job losses have begun to take a toll on the multi-family market, owners of this asset type are still able to secure financing in what remains a frigid lending environment. Just three months after having wrapped up a $350 million secured credit facility, Colonial Properties Trust has landed another major financing deal with the closing of a new $156.4 million secured credit facility.Colonial’s latest credit facility, consisting of a $145.3 million tranche and an $11.1 million tranche, carries a 10-year term and features a 5.31 percent weighted average fixed interest rate. The REIT relied on…

With the economy in the tank and credit markets frozen, fund sponsors have plenty to worry about, but as Ernst & Young L.L.P. concludes in a new report, their greatest issue is mortgage financing and the capacity to refinance maturing debt on commercial assets over the next 12 to 18 months. “Maturity default, that’s what everyone’s worried about, not interim default,” Gary Koster, head of E&Y’s Real Estate Fund Services Practice, told CPN. In the report, entitled 2009Market Outlook – Trends in the Real Estate Private Equity Industry, three debt-related issues were cited among the top five leading strategic priorities…

General Motors was in the news over the weekend before the largest bankruptcy in U.S. history (that is, its own), but more worrying for many policymakers, economists and ordinary borrowers is last week’s sudden spike in mortgage interest rates. For the last few months, the Federal Reserve had used its considerable clout to drive mortgage rates to practically their lowest level since the introduction of Arabic numerals to the Western world, but movement in the bond market struck back last week, pushing rates from about 4.875 percent to about 5.5 percent. In an effort to whack that interest-rate mole again,…

The tsunami of residential foreclosures may have started, back in the days of easy mortgage money, with borrowers whose only qualification was being able to fog a mirror. About half of those kinds of subprime mortgages have resulted in a foreclosure outcome, and Alt-A-inspired foreclosures are spiking too. But now, according to the Mortgage Bankers Association, foreclosures on prime fixed-rate loans represent the largest share of brand-new foreclosures. Currently about 6 percent of all prime mortgages are at some point in the foreclosure process, twice as many as a year ago. Four states account for nearly half of the prime…

After the stock market’s strong performance on Tuesday, some worrisome economic figures put a damper on the party on Wednesday. The National Association of Realtors has pegged the nation’s unsold housing inventory–including single-family, townhouses and condos–at 3.97 million units in April, or roughly a 10-month supply at the current slow-mo sales pace. Unsold residential inventory hasn’t been that high since last November, noted the organization. Not that sales are down. In April, housing sales were up 2.9 percent from March, according to the NAR, spurred by prices considerably off peak, perhaps even down to 2003 or 2002 levels in some…