Real Insight. Real Estate.

An analysis of the housing crisis by Karl Case:

For the last few years, we have shed many tears
Living through a recession.
The economy’s broke and it’s not a joke,
When we talk of another depression.
Fifteen million without a job,
Foreclosures and banks that fail,
401K’s became 201K’s,
And everything’s up for sale.

Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

Editor’s Note: With Valentine’s Day coming up this weekend (order your flowers ASAP!), we figured, why not start off the week with a Cupid-esque topic? We can’t wait to hear your feedback on this one….

When a joint venture partnership occurs in real estate, the term “getting into bed” is often tossed around. And despite the fact that real estate is an industry dominated by men (and therefore subject to more coarse, perverted analogies), this phrase is somewhat appropriate. When you sleep with someone, you want to make sure you are protected (from exactly what, I will leave to the reader’s imagination), right?  Well the same goes for your equity partner in a real estate transaction.  Yet, while all real estate transaction involve some form of due diligence, JV equity partnerships involve an entirely different level of due diligence.

Rather than scoping out the salient facts of the deal, examining the borrowers track record, and crossing all the “t’s” and dotting all the “i’s” of a particular transaction (like a bank might do), an equity partner has to get extremely comfortable with the sponsor’s style and personality in addition to the aforementioned due diligence.  For this reason vetting a JV equity partner has become a lot more like eHarmony than a one night stand. Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

Starwood Hotels CEO on Earnings and Outlook

Geithner On Community Banks

If you enjoyed this post, make sure you subscribe to my RSS feed!

The Week of January 31 - February 6

- Are real estate executives gaining confidence in the general market?

- Obama’s budget has hazy implications for commercial real estate.

- Former Security Capital Execs Plan REIT IPO.

- Despite the scare, Fannie Mae still funded over 80% of its loan originations last year with its MBS program.

- Will an infusion of TARP money into small banks result in productive lending to small businesses and real estate?
Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

10. Mellon Bank Building 150,979
The Mellon Bank Building is a 54-story skyscraper. The height to its structural top is 792 ft. About half of the available space is for sublease.
Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

While many you have not even gotten to the ‘aftermath’ portion of the credit crisis, the federal government is busy not learning lessons with the benefit of hindsight.  Obama’s plan to funnel $30 billion to “small banks” is exactly the sort of central economic planning that effectively caused the crisis. Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

The Select Leaders/Cornell Annual Job Barometer has been released and is available here. The Job Barometer is an effort undertaken by a Cornell team of faculty and staff in conjunction with Select Leaders.  I am part of the Cornell team and I was tasked with writing the Job Barometer.  Readers will find the Job Barometer useful as a metric to understand which industries and sectors of real estate are growing, measured by an increase in demand for employees.  Similarly, the Job Barometer offers guidance to those looking to find a job in commercial real estate.  I have copied the introduction below. (Select Leaders is the leading job board in the real estate community).

Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

Gretchen Morgenson, columnist for the NY Times wrote an article the other day referencing Tishman Speyer and BlackRock’s default on Stuyvesant Town and Peter Cooper Village.  Her point is essentially that Tishman Speyer and BlackRock were not the only investors who took advantage of credit in ’06 and ’07 to make the numbers work on multi-family properties.  Many smaller players had a similar strategy in which they would make highly leveraged acquisitions and ratchet up rents aggressively not only to meet debt obligations but achieve stellar equity returns as well.  Morgenson draws attention to Vantage Properties, an owner of 9,500 rental units in NYC whose strategy has been to acquire rent controlled apartments and ratchet up rents quicker than scheduled to achieve the returns required by Vantage and its equity partner Area Property.  Vantage began to operate in an ethical “gray area” to carry out this strategy.  Will lawsuits and foreclosures in a depressed CRE market trigger the ethical conscience of owners? Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

Stanley Bing, an often insightful contributor to Fortune Magazine, wrote a very interesting blog post last week in regards to banking compensation. He cites an article in the NY Times that said, “Roughly 90 cents out of every dollar that these banks earned in 2009 — and sometimes more — is going toward employee salaries, bonuses and benefits, according to company filings.”  The paper also notes that Citigroup “paid its employees so much in 2009 –$24.9 billion — that the company more than wiped out every penny of profit.”  There has been a lot of outrage over banking institutions who took TARP money paying such exorbitant salaries and bonuses…but is it really a bad thing? Read the rest of this entry »

If you enjoyed this post, make sure you subscribe to my RSS feed!

FDIC chairman Sheila Bair discusses banks failures in 2010.
Bair states that commercial real estate loans will continue to play a large role in bank failures.

Indian billionaire Adi Godrej discusses how the Indian central bank’s increase of the reserve requirement will effect real estate markets in India, and the opportunity this presents to foreign investors.

If you enjoyed this post, make sure you subscribe to my RSS feed!