Finance

The credit freeze that came with the Panic of 2008 this fall has put the sale-leaseback business in a peculiar bind. Because obtaining financing is more difficult than it used to be, companies that happen to own real estate are looking ever more closely at the possibility of unlocking that capital via a sale-leaseback.The problem is that the pool of potential buyers for such properties has shrunk, and the remaining players are finding it hard to finance deals. Andrew Sandquist, senior vice president for the Oak Brook, Ill., office of CB Richard Ellis Inc. and a net lease investment specialist…

CPN Contributing Editor Dees Stribling caught up with William Winn— president-elect of the Tenant-In-Common Association and president & partner in Passco Cos., a specialist in commercial real estate acquisition and management that in recent years has also developed a thriving subspecialty in sponsoring TIC deals. Like pretty much every corner of the real estate industry, TICs have seen better days, but Winn holds out long-term hope.CPN: Next year is going to be another tough year for TIC deals, isn’t it?Winn: Properties aren’t performing as well as they were, and I expect that to continue into 2009, so we’re having the…

Last week’s move by the Federal Reserve to trim a benchmark interest rate may have only a modest impact on its own. But any steps that can ease the credit squeeze or stabilize investor confidence can only help in the long run, says William Hughes, senior vice president & managing director of Marcus & Millichap Capital Corp., the capital markets affiliate of Marcus & Millichap Real Estate Investment Services Inc. “I think the Fed is trying to play every card it possibly can,” Hughes told CPN. Lowering the federal funds rate from 1.5 percent to 1 percent is partly intended…

St. Paul, Minn.-based AEI Capital Corp. has revealed a planned $100 million equity contribution for the development and purchase of net leased retail properties in various markets across the U.S., but primarily in Minnesota. The capital is being raised through the company’s net lease property investment funds. AEI is an all cash-investment concern, so its pursuit of properties to buy and projects to develop is not hindered by today’s chilly lending market. As for buying existing net leased retail assets, competition in the market is anything but steep. The unavailability of viable debt in the capital markets and the fact that…

For those waiting to see if any of the $700 billion federal bailout fund would deal with rising numbers of foreclosures and homeowners with distressed mortgages, help could be on the way. Major news organizations have reported that the Treasury and Federal Deposit Insurance Corp. are working on a plan to have the government back mortgages of up to 3 million struggling homeowners who would get their mortgages lowered. The Washington Post reported that the plan, if approved, could cost between $40 billion and $50 billion, and would lower interest rates for homeowners in danger of foreclosure for up to…

Kilroy Realty Corp has reported financial results for its third quarter ended September 30, 2008 with net income available for common stockholders of $13.2 million, or $0.40 per share, compared to $9.0 million, or $0.28 per share, in the third quarter of 2007. Revenues from continuing operations in the third quarter totaled $77.1 million, up from $65.1 million in the prior year’s third quarter. Funds from operations (FFO) for the period totaled $34.5 million, or $1.00 per share, compared to $28.2 million, or $0.81 per share, in the year-earlier period.  For the first nine months of 2008, KRC reported net…

New Britain EMS got a unanimous OK from the common council recently to let it sell its assets to the city. It will then lease them back, according to a report in the Hartford Courant.  EMS in New Britain has been hit hard in recent years, as have other such emergency medical service providers nationwide. The New Britain provider has been buffeted by expenses and low-ball Federal payments that don’t cover true costs of many of its services.Three years ago the city loaned $2.1 million to the EMS. The heart of the trouble, according to lawmakers is that the Federal…

The sale-leaseback deal was mostly invented to provide an alternate source of capital for a company that dislikes too much debt, or simply wants more capital than its bank cares to lend it. These days, it seems, that alternative can be all the more useful for corporate finance, now that banks in general are hesitating to lend, regardless of the creditworthiness of the borrower. One real estate owner tapping into the sale-leaseback source in a big way recently is DineEquity Inc., franchisor and operator of Applebee’s Neighborhood Grill & Bar and IHOP Restaurants, which just inked deals with an assortment…

For the first nine months of 2008, REITs trounced the broader stock market indexes. As of Sept. 30, equity REIT stock performance was up 1.76 percent for the year, according to the FTSE NAREIT Equity REIT Index. By contrast, the NASDAQ Composite was down 21.13 percent, the S&P 500 was down 19.29 percent and the Dow Jones Industrial Average was down 18.2 percent.Then came October. Through yesterday, the FTSE NAREIT Equity REIT Index had plunged 32.37 percent for the month of October. As of October 21, then, equity REITs had fallen 31.18 percent for the year. “October changed the REIT…

Wachovia Corp. has filed a lawsuit in U.S. District Court in Manhattan against the group of homebuilders behind a gargantuan planned community in the Las Vegas area, in hopes of recouping at least $358 million in loans made for the $565 million project, which has been scrapped. While the specific name of the project is not identified in Wachovia Bank National Association v. Focus Kyle Group L.L.C. et al, the description of the development and of those behind it match a project called Kyle Canyon Gateway.  In addition to Focus Kyle Group and Focus Property Group chief executive John A….