Commercial Real Estate Finance

Posts Tagged ‘JP Morgan’

Protesting bank-financed mountaintop removal

“It’s one thing if your potential borrower is dumping cyanide in a river.  But if they’re dumping carbon dioxide into the air, which is not exactly illegal — what do you do?”

For a lender, this is an obvious ethical dilemma.  I think most lenders would agree that they wouldn’t want to finance a business that is doing something illegal (i.e. dumping cyanide in a river).  But there are plenty of lenders who finance profitable businesses that are 100% legal, albeit in some sort of moral “gray area” (i.e. dumping carbon dioxide into the air).  According to this article published on Monday by the New York Times (NYSE: NYT) from where I got the above quote, banks are starting to move away from making loans in that gray area.

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Commercial Real Estate Week in Review-June 6-12

-Obama to Congress: Get reform bills reconciled before G-20.

-GE Capital to cut real estate portfolio by 50%.

-Cassidy Turley looking to compete with Jones Lang LaSalle (NYSE: JLL) and CB Richard Ellis in commercial real estate.

-JP Morgan (NYSE: JPM) to potentially sell $700M+ in CMBS at 50bps higher than RBS (NYSE: RBS) did in April.

-Is the financial industry already changing before the regulations take effect?
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A couple of months after I quit my job at JPM to join Llenrock, I had dinner with my former trading colleagues.  True to form, all we really talked about was trading.  And that, of course, led to talk about specific trades.  It’s the trading analogue to fishing stories about ‘the one that got away’.

In my book, at the time of my departure, was a losing trade.  i.e. I had already lost money on a trade, but had not yet cut my losses in the belief that the market would move my way.  In response to some teasing about the ‘bad trade’ I pointed out that, in fact, the traded ended up moving my way after I left.  I was basically saying, “Hey, I’m not such a dummy after-all.  While I lost money initially, the trade turned and ended up actually making money.”

The response to me: “It’s a mark to market business.” Read the rest of this entry »

Two years ago, when Llenrock Group was founded, we saw an opportunity to step into a niche role as a small investment bank that focused exclusively on small to mid-size commercial real estate transactions.  Shortly after we started, markets fell off a cliff.  As a result, the need for specialized I-Banks has become more obvious, and a lot of new players are jumping on the opportunity.  Crain’s New York Business published an article yesterday highlighting this opportunity and the I-Banks that are ramping up their teams to give the big dogs a run for their money.  What is the focus of these I-Banks and what differentiates them from the juggernauts on Wall Street?

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The 10 Biggest Bailout Recipients -

This post has been contributed by Richard Weidel, a  Masters in Real Estate Investment Banking and Private Equity graduate student at Cornell University.

An interesting development is in the 11/6/2009 Commercial Mortgage Alert (CMA), headlined “JP Morgan Resumes CMBS Loan Program”. The article states that J.P. Morgan has restarted its conduit lending program, and plans to restart  securitization next year. With the debt markets still frozen, and a looming commercial debt maturity balloon coming in 2010-2011, new securitizations could offer much needed liquidity to a tight CRE market. While JP has indicated that it plans to only originate fairly conservative, fixed-rate loans for securitization, this could be the impetus needed to improve investor confidence in CRE and bring money back to the debt markets.

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The Week of October 10-16

- There’s two kinds of small banks: The kind that didn’t make bad loans, and the kind that won’t be around much longer.

- Banks that want to grow apparently won’t be looking to commercial real estate.

- A Northeast HUB for industrial space, Northern New Jersey, has seen sublease space hit a six year high.

- $55 billion in mortgage servicing writedowns has hit the 4 biggest banks, including JP Morgan.

- Capmark may finally file for bankruptcy.
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It turns out not every Canadian is a dim-witted Dudley Do-Right riding backwards on his horse.  In fact, the Canadian’s have proved they know what they’re doing when it comes to running large, private banks.  In a time when the largest U.S. banks are suffering from rapid deterioration of market value, Canadian banks are actually improving their market cap without having to engage in dilutive capital raises.  There’s no doubt that RBC, TD, Bank of Nova Scotia, Bank of Montreal, and CIBC (the 5 largest Canadian banks) have weathered the economic downturn far better than their U.S. counterparts.  In many instances Canadian markets move in step with U.S. markets, so what could be the reason for the relatively strong health of our banking neighbors to the north?

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