Commercial Real Estate Finance

Posts Tagged ‘recovery’

Since it’s Friday and we’re all looking forward to the July 4th weekend, we thought you all deserved a fun, booze-related post today.  On Tuesday, the FSA (The U.K.’s financial regulator) came forth with their investigation of a drunk securities broker whose inebriated trading activities cost his firm $10 million.  Steve Perkins, an employee of PVM Oil Futures executed $520 million worth of unauthorized trades on his employer’s account while drunk last summer.  Check out this NY Times (NYSE: NYT) article by Julia Werdigier to read more about Perkins’s folly.

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Commercial Real Estate Videos of the Week-June 6-12

Nick Axford of CB Richard Ellis discusses whether a recovery is on the way for a commercial real estate market given that European office rents rose for the first time in 18 months.

Steve Joyce, CEO of Choice Hotels, and Bill Strazzullo, of Bell Curve Trading, discuss the US National Debt, and what to do cut deficits while still stimulating the economy.

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Commercial Real Estate Videos of the Week-May 30-June 5

An extremely humorous view of Europe’s debt crisis by political humorists John Clarke and Bryan Dawe.

The amount of empty commercial space fell for the first time in a long time, but the large amount of shadow office space may indicate that a recovery is still a long way off.

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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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Bernanke Supports Regulatory Power to Shrink Banks

Is Commercial Real Estate Really Near the Bottom?

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In the commercial real estate space, you likely by this time have heard the phrase “extend and pretend,” usually in reference to what a bank will do when faced with a non-performing loan coming due on their books.  Rather than foreclose and ending up owning an asset, which banks are not in the business of (nor do they have the proper asset and property management staff  requisite to keep the asset from devaluing further over time), they would rather extend the term of the loan and allow the borrower to continue to try and turn the asset around. In the mean time, they will sit on there collective hands and pretend there is no impending doom in relation to the asset, or their portfolio full of similar problem properties.  After all, it is likely the borrower is more of an expert in how to fix the asset’s issues than the bank.

But after attending a brokerage conference last week that was full of investors of the four major food groups (multi-family, retail, office and industrial product), I think perhaps that there is a new phenomenon.  Banks may be extending and pretending, but investors are doing the opposite: Pretending and extending….as in their hopes and expectations for their assets, and the markets for them. Read the rest of this entry »

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I’ve started to write these blog entries on Sunday night. The natural pause ahead of the new week and helps broaden my perspective.

It is in this mindset that headlines regarding South Korea strike me as relevant. It turns out, South Korea’s economy expanded in the third quarter at the fastest pace in 7 years. Notice, if you will, the contrast to this article from Feb 2nd when things weren’t looking so hot. A quick poke around the internet shows what South Korea exports: electronic products (semiconductors, cellular phones and equipment, computers), automobiles… Basically, the South Koreans make stuff we don’t and therefore have to import.

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The week of October 17-23

- Why do we expect banks to play by the rules when the FDIC doesn’t?

- How much do bankers expect to recover from defaulted CRE loans?

- The TALF program is going to have massive requests next time around.

- Australia’s REIT yields are among the world’s best.

- CMBS spreads are narrowing; Mortgage delinquencies are climbing.
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