Commercial Real Estate Finance

Posts Tagged ‘lending’

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.

Read the rest of this entry »

In past banking crises in Sweden, Britain, the U.S. and Asia, taxpayers picked up the cost of bailing out troubled institutions because the government had to act quickly to contain the problem and the banks had been so battered they couldn’t repay the money. Now, regulators want to tax banks to avoid the worldwide catastrophe that was the credit crisis from ever happening again.  More importantly, should such a thing happen again, governments want to avoid having to go to their constituency and explain why they are using taxpayer dollars to bail the banks out. A plan is gaining momentum both here and abroad.  The bigger question might be: in what form will the tax take, and are there any advantages/disadvantages?

Basically there are four different options: Read the rest of this entry »

For the Week of February 6-12

- Will small U.S. banks have to start curtailing lending?

- Fannie and Freddie are set to purchase $200 billion in delinquent home loans.

- Multifamily REIT CEOs expect improvement in fundamentals in 2010 and a generally positive year.

- Mall landlords are expecting a much better 2010 according to WSJ online.

- An aquarium development deal in Times Square?
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Starwood Hotels CEO on Earnings and Outlook

Geithner On Community Banks

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 »

Last week, A Warren Buffet-led group struck a deal to acquire Capmark Financial Group Inc.’s mortgage banking business . A newly formed entity owned by Buffet’s Berkshire Hathaway Inc. and Leucadia National Corp. was given a put option to purchase Capmark’s North American servicing and mortgage banking businesses. Capmark operates three core business lines: lending and mortgage banking, investments and funds management, and servicing. The latter of which is, and has been drastically adversely affected by the poor performance of the first two. Jeff Zaun from S & P remarked recently, “We expect Capmark either to enter Chapter 11 bankruptcy proceedings or to negotiate a distressed exchange outside of bankruptcy, which most likely would affect most of its debt. We will consider either of these events to be a default.” And Buffet’s bid reflects either possibility, offering $490M, or $415M if Capmark files for bankruptcy. So why do I expect Capmark to choose bankruptcy?

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Check out these two videos. When buyers are back, banks are back….and we tell you which regional ones are well poised to take advantage.