Commercial Real Estate Finance

Posts Tagged ‘LIBOR’

Week in Review for March 30 – April 1:

- Improving home prices and a strengthening labor market suggest the U.S. economic recovery is gaining momentum. Some suggest it is time for the Fed to wind down its economic stimulus program through which it has purchased billions of dollars in securities to hold down interest rates. Others argue the Fed’s bond-buying should continue until the unemployment rate has fallen below 6.5%.

- Philadelphia-based multifamily operator Morgan Properties closes on $1.2 billion in refinancing for a portfolio of 73 properties. The refinancing, the largest in Morgan Properties’ history, was originated by Berkadia Commercial Mortgage, reports CoStar Group.  

- With the rejuvenation of many CRE markets and growing CMBS activity, buyers of higher-risk, B-rated bonds are showing increased appetite.

- The Libor scandal of the last couple years, which has triggered numerous lawsuits, investigations, and government inquiries, prompts some regulators to call for a new, more transparent benchmark for interest rates. Others, including the European Commission, hope to improve the current system, reports the New York Times.

- Philadelphia’s Equus Capital Partners announces the sale of a 330-unit student housing property in Chicago’s South Loop. The high-rise, sold for $58 million, serves Columbia College, Roosevelt University, and other Chicago schools. Equus Capital was previously known as BPG Properties, Ltd. Read the rest of this entry »

Week in Review for August 11 – 17:

- “Are Clicks Cannibalizing Bricks?” CoStar reports on the strategies traditional retail chains are using to compete with–and adapt to–online retail. In many cases, this includes closing stores and reducing expansion plans. The Gap (NYSE: GPS) and Lowe’s (NYSE: LOW) have chosen this route, closing 200 and 20 locations, respectively. Analysts predict clothing and apparel stores will be especially affected by e-commerce, diminishing this market’s overall real estate demand.

- Lehman Brothers, which took control of Colorado multifamily REIT Archstone after a heated battle with Equity Residential (NYSE: EQR), files to take the REIT public in a $100 million IPO.

- In Central Pennsylvania, Cabot Properties acquires an 862,450-SF industrial property for $44.8 million (about $52/SF). They acquired the former K-Mart Distribution Center in Chambersburg from JP Morgan Chase (NYSE: JPM).

- Michael Fascitelli, president of Vornado Realty Trust (NYSE: VNO), attempts to calm investors worried over the increasingly soft CRE market in Washington, D.C. Because of the government‘s endeavor to sell off unused and underused Federal property–as well as general political uncertainty–the District and Northern Virginia have become more challenging for investors and developers.

- The UK’s Financial Services Authority calls for reform of the Libor, arguing that the “existing structure and governance of Libor is no longer fit for purpose…” They are also examining other financial benchmarks for flaws.   Read the rest of this entry »

Mensch: 

Noun, informal. A decent, upright, mature and responsible person.

Schlemiel: 

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser. 

Mensch of the Week:

Liberty Property Trust

With its recent purchase of 30.7 acres of industrial land in Eastern Pennsylvania, office/industrial REIT Liberty Property Trust (LRY) earns the honor of being our Mensch of the Week. The $4.2 million acquisition in the city of Bethlehem will be the site of an 800,000 SF industrial building. Construction is expected to commence in November, reports CoStar Group.

Why is Liberty Property Trust our Mensch of the Week? Because the firm is bringing CRE investment to Eastern Pennsylvania, a region that typically generates far less investor attention than neighboring areas like D.C. and New York City. Not only that, such investments as this massive land purchase strengthen the resurgence of post-industrial communities in the area, including former steel town Bethlehem. Read the rest of this entry »

Week in Review for July 14 – 20:

- Facing a depleted inventory and shrinking cap rates, multifamily REITs like Camden Property Trust (NYSE: CPT) begin to increase development.

- As the alternative energy sector scrambles for financing, those involved in solar energy explore funding through a REIT structure. However, a potential solar REIT (or “S-REIT”) sector isn’t likely without modification of tax codes governing REITs.

- In Philadelphia, the office property vacancy rate decreased to 11.3%, with 44,615 SF of net absorption in the previous quarter, reports CoStar Group. This improvement reflects an overall increase in office market demand. However, this increased absorption is yet to translate into rent growth.

 - Also in Philadelphia, Nexus EnergyHomes announces the city’s first “Net-Zero” residences. Planned for the Northern Liberties neighborhood, the town homes will be designed to generate as much energy as they use, and will feature geo-solar and water reclamation technology.

- Thanks to high demand and low rates, Fannie Mae and Freddie Mac’s CMBS issuance exceeds that of the private market. Read the rest of this entry »

Week in Review for July 7 – 13:

 - Thanks to high-quality properties and a strong tenant base, shopping mall REITs will “continue to outperform in the second half of 2012,” says J.P. Morgan (NYSE: JPM) REIT analyst Anthony Paolone.

- Data Center operator Equinix, Inc. (NASDAQ: EQIX) explores conversion to REIT status for tax advantages. The firm is watching other tech-oriented real estate firms to judge how effective such a change would be.

- Craig Israelsen, finance professor at Brigham Young University, disputes the idea that REITs are an “alternative asset.” Rather, he argues, REIT investment is as viable a strategy as stocks and mutual funds. “I view them as a core asset class,” he says.

- The Philadelphia office of software company OSIsoft expands its location at 1700 Market Street by leasing an additional 30,000 SF in the 32-story, class A building.

- International office/industrial operator Goodman Group (ASX: GMG) prepares to develop industrial properties in the U.S. In a capital partnership with Birtcher Development and Investments, the firm plans to develop four properties totalling over 9.8 million SF of leasable space. Three of the sites are planned for California, the fourth for Pennsylvania’s Lehigh Valley.

Read the rest of this entry »

 Mensch: Noun, informal. A decent, upright, mature and responsible person.

Schlemiel: Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser.

Mensches of the Week:

Larry Page & Sergey Brin

Sure, they’ve taken over the Internet, plus everyone’s personal information and search histories, in preparation for their inevitable domination of humanity. But they also give us lots of playful Google Doodles, which everyone agrees are pretty cool and make them worthy of mensch-hood. On top of that, Google (NASDAQ: GOOG) co-founders Larry Page and Sergey Brin are making a sizable contribution to New York City’s emergence as a technology hub.

Back in December, I discussed the city’s competition to plan a research campus on Roosevelt Island. A design submitted jointly by Cornell University and Technion-Israel Institute of Technology beat a number of high-profile competitors, and the two schools have been awarded the space and millions in city funding to bring a world-class technology research campus to Roosevelt Island. Of course, a project of such scope won’t spring up overnight, and this is where the executives from Google come in. Read the rest of this entry »

Week in Review for March 17 – 23:

- Host Hotels and Resorts (HST) expects to raise $344 million in a private placement. It plans to use some of these funds to pay off the mortgage on its JW Marriott in Washington, D.C.

- Kenedix, Inc. plans a $480 million IPO in Japan. The properties to be included in this offering are mainly residential assets in Tokyo. This is the first IPO of a Japanese REIT since 2007.

- Commercial real estate analyst says the industry is better prepared for a recession than it was a few years ago: “Having gone through the Great Recession I think everyone is much more cognizant of the signs,” he says.

- Southern multifamily REIT Ginkgo Residential plans to raise roughly $250 million in an IPO. The REIT currently owns 24 complexes (5,678 units) in South Carolina and Virginia.  Read the rest of this entry »

Week in Review for February 25 – March 2:

- Morningstar analysts are ambivalent about multifamily REITs’ long-term outlook, despite current favorable conditions in the apartment sector.

- General Growth Properties (GGP) buys 11 Sears locations from Sears Holdings (SHLD), including locations in Florida, Utah, and Iowa. Perhaps most importantly to GGP, the deal included a Sears store at the high-performing Ala Moana Center in Honolulu.

- Also in Honolulu, Pacific Office Properties Trust (PCE) has sold its First Insurance Center property to Senior Housing Properties Trust (SNH) for $70.5 million. The deal is expected to close on June 30th.

- The National Association of Business Economics (NABE) predicts overall economic growth in 2012, including gradual improvements in employment, home construction, and spending.

- The Dubai-based owners of the five-star Mandarin Oriental in Manhattan reach a $175 million refinancing deal with the Bank of China.  Read the rest of this entry »

A little melodramatic?  Perhaps, but it’s hard to come up with a new Thanksgiving reference.  Lord knows there’s not much to be thankful for in the financial markets.  Sorry.  Last one.  In the very near term, it’s going to be 8000 calories first for me; especially if I stick to my strategy of sticking to stuffing, gravy and desert.  But I digress…

As regular readers know, I track the TED Spread and have not sounded the alarm just yet.  I must admit, however, that I’m starting to get very nervous.

It’s just two charts that are freaking me out:

The first is this chart of LIBOR:

Read the rest of this entry »

When are banks going to pass their cheap funding on to commercial real estate owners?According to this article on Bloomberg, banks are shifting more of their balance sheet funding from medium term debt to deposits.With their liability duration lower, why not move their asset duration lower?Why not issue floating rate mortgages to commercial borrowers?

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