Commercial Real Estate Finance

Archive for November, 2009

How many years did it take for the Dow to reach pre-crisis levels after the crash of 1929?    22 years.

From the lows of 1932 it took 22 years for the Dow to see the highs of 1929. So, 25 years if you want to count from the highs of 1929 to 1954.

Read the rest of this entry »

Everything may be bad here, but while we recover, could East Asia be in on its way down? China’s property market could be the next bubble, and the Japanese Yen may be the next funding currency.  Take a look at these two insightful videos:

The Week of November 21-27

- Could a new kind of stress test be looming for CRE?

- With the future for CRE unknown, one expert advises banks to raise equity now.

- Regulators are pushing small banks to cut back CRE lending.

- Morgan Stanley admitted defeat, handing back Crescent Real Estate Equities to lender Barclay’s.

- A Hong Kong IPO brought in $2.5B for the Sands China…the low end of the range.
Read the rest of this entry »

Top 10 Face of White Collar Crime in America -

We  pilfered their real estate and financed it with their blood. Perhaps we should be thankful to the Native Americans for the rich lives we all enjoy as Americans. In the tradition of completely ignoring what American holidays are REALLY about, here are some fun facts about Thanksgiving for you.  Gobble Gobble!

• Americans feast on 535 million pounds of turkey on Thanksgiving.
• According the U.S. Department of Agriculture, more than 45 million turkeys are cooked and eaten in the United States at Thanksgiving. That number represents one sixth of all the turkeys sold in the U.S. each year!
• Benjamin Franklin wanted the turkey to be our national bird.
• Domesticated turkeys cannot fly, however wild turkeys can fly up to 55 miles per hour over short distances.

Read the rest of this entry »

I recently bought a duplex both as an investment and as a place to live for the next few years. Because I intended to live there and it was less than four units, I was able to get a 96.5% loan to value, 30 year fixed rate 5.00% mortgage. I know, I was amazed as well. Uncle Sam made the deal even sweeter for me by kicking in an $8,000 first time homebuyer tax credit. From my perspective the government made this a no brainer- all I had to pay for was closing costs, because the $8,000 tax credit will cover more than my down payment. Effectively, the government guaranteed my mortgage, allowing me to borrow 96.5% at a ridiculously low rate, and then gave me the other 3.5%! This is all great and good, but under this scenario, will I stay in the house if the market continues to get worse? With a 96.5% FHA loan during a turbulent market, it would take only a small change in property values for me to find myself underwater.

Read the rest of this entry »

This deal story will blow your mind if you haven’t already heard about it.  Sports fans, Catholics, and concert-goers may remember the Silverdome as a once historic venue for events ranging from a mass by Pope John Paul II, to the World Cup, to Super Bowl XVI, to the once home of the Detroit Lions and Pistons (of course the biggest crowd was actually 93,000 for Wrestlemania III…the largest indoor sports event of all time).

To those who don’t remember the Silverdome for any of those reasons, perhaps you’ll remember it for this.  Last week, it sold at auction for just over 1% of replacement cost.  Wait, scratch that.  Considering it was built in 1975, it might be below 1% of replacement cost in today’s dollars.  Almost 35 years ago, the 80,000 seat dome set on a 127 acre parcel cost $55.7 million dollars to construct.  It sold to an undisclosed Canadian real estate firm for $583,000. I think the Superdome would get ten times that price, post-Katrina, even if the Saints didn’t play there anymore (Am I the only one that thinks its value should have risen as a result of the Detroit Lions not playing there?) Read the rest of this entry »

I recently read this article about possibly the greatest real estate turnaround EVER.  Instead of paraphrasing the story (I’ll let you read that on your own), I’ll quickly summarize it and get to the more interesting commentary on the lessons this deal story has for the future of urban redevelopment. Especially when you consider the plight and blight of a place like this. Read the rest of this entry »

Bernanke Supports Regulatory Power to Shrink Banks

Is Commercial Real Estate Really Near the Bottom?

The Week of November 14-20

- The bond market has a healthy appetite for TALF-backed CMBS.

- CRE is getting blamed left and right for the slow economic recovery.

- Is the CIT Group bankruptcy a sign that government rescue plans don’t work?

- Is CRE a bigger risk to smaller banks?

- Dozens of banks are in trouble despite TARP aid.
Read the rest of this entry »