Commercial Real Estate Finance

Posts Tagged ‘Goldman Sachs’

Buried somewhere deep in the borrowed notes of an undergrad class I didn’t attend, was written the name John Rawls. Frequent readers of this blog already know I haven’t the intellectual horse power to remember anything Rawls wrote, let alone actually understand it. In this instance, however, the notes briefly described a concept using a metaphor I could appreciate: a chocolate cake.

Put simply, if you want to ensure a cake is cut up evenly, make the person who does the cutting get the last piece. According to Rawls this all to do with “Original Position” or something philosophical. To me, it was a clever way to make sure I wasn’t fucked out of my share of cake. Read the rest of this entry »

Paul Vlocker - The Financial Reformist

With the financial reform bill signed into law just a couple of weeks ago, I am interested to see how the legislation will change the landscape for major commercial real estate investors.  The new law puts constraints on investment banks’ ability to be both advisors as well as principal investors.  Some of the biggest and strongest real estate investors through the peak of the last cycle were investment banks housing advisory and principal investment business lines under one roof.  As a result of financial reform, however, investment banks like Goldman (NYSE: GS), BoA (NYSE: BAC), and Morgan Stanley (NYSE: MS) will have to significantly downsize and perhaps even shed entirely their principal investment businesses, including real estate funds.  Will the selling and spinning-off of real estate funds be a potential buying opportunity for existing investment managers?

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Commercial Real Estate Week In Review for the Week of July 24-30

- Despite Financial Regulation passing last week, is the financial industry trying to influence policy?

- Tim Geithner thinks the government should retain a mortgage guarantee.

- Would fair-value changes affect private equity and venture capital?

- A CMBS fund has filed a foreclosure lawsuit against a Florida building owner

- Starwood is planning to expand its presence in NYC.
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CMBS stands for commercial mortgage backed securities.  Of course, if you asked borrowers about 18 months ago (and many even today), you might have thought it stood for Commercial Mortgage Bull $hit.  When CMBS financing was introduced to the commercial real estate industry earlier in the decade, it was viewed as a Godsend.  This was because rates and terms were better than those being put out on term sheets from conventional banks.  The reason for this, of course was that the loan originators (often large banks) would not keep these loans on their balance sheets, but instead sell them off in tranches, with the help of investment banks, to individual investors who had a wider appetite for risk.  Rather than putting all of their eggs in one basket with one property, they technically owned pieces of multiple properties that were all pooled together.  On the surface this seemed like a great idea and a win-win for all involved.  Obviously, the lax underwriting standards for these loans did not (and maybe could not) have taken into account the tumultuous events of the credit crisis. Read the rest of this entry »

Commercial Real Estate Week in Review-Week of May 23-29.

-What’s in the Senate Banking Bill? Read the full text here, and summaries here.

-Healthcare REITs get upgraded rating. Time to buy in?

-Welsh Property Trust’s new projection for their IPO is 17.5M shares at $19-21 per share.

-Banks are shoring up their balance sheets by selling their distressed debt in order to acquire failed competitors.

-Need a place to store your property assets? Do what Sun Healthcare Group is doing, create a REIT.

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Week of May 9-15

-Are lawmakers overlooking Fannie and Freddie in the reform debate?

-Goldman Sachs and Citigroup are partnering for what could potentially be the largest mortgage-debt financing connected to real estate for the acquisition of Extended Stay by Starwood Capital.

-Malaysia will have a new largest REIT in the third of fourth quarter after Sunway City’s IPO, which is expected to raise $459M USD.

-CBRE says Mexico’s commercial real estate market is poised for growth. I say watch out for drug wars.

-A tough real estate market is hindering recovery.
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Who took my Coke from the fridge? You did it!

Wasn’t me.  Must have been him.

Couldn’t have been him because he wasn’t even here…and you have a Coke in your hand.

Well I may have a Coke in my hand, but I swear I didn’t do it. It had to be somebody else.

If one thing is certain, it is that nobody wants to take the blame for anything anymore, no matter how obvious they are to blame. Maybe we should collectively blame our generation’s parents for coddling us way more than in generations past. Hell, even that was an excuse.  It seems today individuals are so adept at assigning blame to anybody but themselves, they might need their own reality show.  No, not that kind of reality show.  I mean somebody needs to show them reality. Read the rest of this entry »

The Week of April 24- April 30

- Two of the largest U.K. REITs are proposing a merger.

- Amid the calamity, Goldman Sachs is underwriting new CMBS for Taubman.

- Is the credit crisis over for big banks?

- Is lower leverage what is making REITs the darling for property investors?

- Foreign buyers are starting to crowd the U.S. real estate investment market.
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1) What can we learn from Goldman Sachs?

Ignoring, entirely, the debate surrounding the series of accusations leveled at Goldman Sachs, we can still learn something useful from their circumstances:  Pay attention to what write on email!  I’ll remind you of an oft repeated rule of thumb: consider, before pressing send, what your email might look like as a headline in the Wall Street Journal.

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Is Goldman CEO Lloyd Blankfein thinking hard, or about to drop another turd on everybody?

So the SEC has filed suit against Goldman Sachs.  Most people are saying hallelujah.  “Its about time they get what they deserve,” are the thoughts of most not in the know.  Yet, whether Goldman ends up being guilty of securities fraud or not, one thing remains a fact:  Its Goldman’s nature, nay, its business, to take advantage of people and situations.  Investors, little leaguers, the city of New York, or even its own employees.  Read their shit list… Read the rest of this entry »