Commercial Real Estate Finance

Posts Tagged ‘capitalism’

Desperate times call for desperate hoteliers?

There is no doubt that the hotel sector has been the hardest hit amongst the various real estate property types over the last 2 years.  While cap rates have risen steadily across the board in every asset class to the tune of 50-250 basis points, hotels have seen a meteoric rise between 400-800 basis points, mostly depending on the flag and location. I was perusing the daily periodicals the other day when I came upon one of the most ridiculous, fascinating and shocking real estate related stories I have ever read. Read the rest of this entry »

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In yesterday’s video of the week post, Congress seems to finally be proposing some reform to the credit agencies, and how they function.  This is a good thing.  Currently, companies pay credit agencies to rate their company debt.  Investors then use this information to make investment decisions.  The conflict of interest should be beating you over the head with a two-by-four any minute now.  The worst part however, is that up until now, the credit agencies have zero skin in the game, which allows the conflict of interest to be exacerbated.  The good news is that Congress does want to regulate the agencies and hold them accountable by making them liable in some form or fashion for their information.  Hallelujah! Unfortunately, what the subcommittee has proposed is not nearly good enough. Read the rest of this entry »

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In the last 18 months, banks’ balance sheets were decimated by having to “write down” the values of perceived “toxic assets” that were on their books.  This led to the devaluation in bank stocks, which tightened the grip on credit harder than Shawne Merriman’s hands on Tila Tequila. The (literal) collateral damage?  In the hundreds of billions.  We now collectively refer to this debacle as the credit crisis.  But could the resurgence of the market for distressed assets lead to a quick reversal of fortune for both banks and the real estate industry as a whole? Read the rest of this entry »

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Last week, a report surfaced announcing the return of Mark Walsh (former head of Lehman Brothers global real estate group) to what’s left of Lehman Brothers to take over the crappy portfolio he once amassed during his tenure there. According to an article in the Wall Street Journal:

“Mr. Walsh and a team of former Lehman colleagues are setting up a new stand-alone business to manage the private-equity [real estate] portfolio. They stand to profit if the portfolio of distressed assets — for which they once paid top dollar — recovers only some of its value.”

On the surface, this is about as dumb as asking Dick Cheney the rules of firearm safety, Robert Hinckley Jr. how to assassinate a President, George W. Bush where to find Osama Bin Laden, or Bill Clinton to turn down the advances of unattractive women. Many a joke have been made thus far regarding the news, including outdated Brokeback Mountain jokes (i.e. “Lehman: Mark Walsh, I just can’t quit you” etc).
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