Commerical Real Estate exposure greater than 300 percent of tier 1 capital
This is truley a great piece that is a different twist on why things are so out of wack with commerical banking instituations. It was published this morning on the MBA (Mortgage Bankers Association) News link.
http://www.mortgagebankers.org/tools/FullStory.aspx?ArticleId=11354
Twenty-two bank failures this year — and plenty more to come
A Congressional Oversight Panel report on commercial real estate loans said $1.4 trillion in such mortgages will require refinancing in 2011 through 2014. The bad news? Nearly half are underwater, with the borrower owing more on the loan than the property is currently worth.
A few notable articles:
http://www.bizjournals.com/extraedge/washingtonbureau/archive/2010/03/01/bureau1.html
http://www.pressofatlanticcity.com/business/article_caa08b7c-24b9-11df-9794-001cc4c03286.html
http://www.livetradingnews.com/distress-commercial-property-sales-escalate-in-the-usa-and-japan-9715.htm
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20100301/FREE/100309997/0/REG
Carl Ichan – The Lift
We follow Icahn around here. “Never let em see you sweat”. I enjoy reading and studying how CEO’s live their daily lives. This is a good segement about Carl and how he rolls. 12 minutes 10 seconds.
NPR – Commercial Real Estate Crunch
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mercial Real Estate Crunch – NPR This segment came on the radio recently and I thought it would be appropriate for the blog. Friends and collegues ask me how things are looking in the commercial real estate industry, with hopes that I will assure them that things are getting better as it relates to the commercial real estate economy. When I read the articles and listen to stories like this, it reconfirms my personal opinion that recovery is still very distant. Banks, lenders, owners and investors are realizing more and more that the properties that they own, or are thinking about buying are facing higher vacancy rates, falling lease rates and loans that are coming due and payable. Click on the title “Commercial Real Estate Crunch” above to listen to the short segment, if you for any reason cannot listen to it please click here.
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Zell Again
Sam Zell was in town recently, I unfortunately was unable to attend. However what people who went took away is that the real estate investor Sam Zell, who got out of the business at the height of the market back in mid-2007, is going back and he’s buying debt, not properties, and thinks the best deals are big apartment buildings. Zell sold off his huge stake in Equity Group Investments for $39 billion just before a tidal wave of residential defaults overtook the world economy.
In other Zell News:
- Little known fact: Mr. Zell is the chairman and largest shareholder of American Classic Voyages, which filed for bankruptcy protection in October. This came after the failure of an ambitious project by Mr. Zell to build two 1,900-passenger cruise ships, the first that were to be constructed in this country in 40 years. It also came despite a boatload of government aid to Mr. Zell, including $1.08 billion in federal loan guarantees.
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Zell, who arranged a controversial $11.7 billion employee buyout of newspaper giant Tribune filed bankruptcy in October. http://www.nypost.com/p/news/business/item_Hj0gHvrnZ0i5FO8Pth8auO#ixzz0f9RUYKJQ
FDIC Failed Banks List
FDIC: Failed Bank List
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership. This list includes banks which have failed since October 1, 2000.
Rates: Where do Deals Get Done?
I read a great article yesterday by Robert Canter out of Texas, his closing line was:
“I know being realistic is not popular, but these same forecasters are the same that got us into this quandary in the first place”
This guy is dead on, please read his quick article. I constantly have to cross the road with Sellers and Landlords when I approach them with a lease rate or purchase price that I feel is realistic in todays market. The rub comes by way of fact that the price I am sometimes aiming for is 30% -40% below what they are asking. However, the hard part is getting their representative to realize that it is not the asking prices that are driving the market anymore, it is the comparables. To me the asking prices are irrelevant. If brokers spent more time trying to figure out where the comparables are, the better off they would be than trying to explain to a guy like me why my asking price should be higher than it is. Because the reality is, that in the cities in which I do business, there is always a Landlord near by who will gladly “better” the deal who are in a position to negotiate because they have to.
“Forecasts in commercial real estate lately have been as reliable as the weather forecasts especially those by the large brokerage full service firms.”-RC
Distressed Real Estate Summit – California
February 4, 2010 – Westin Bonaventure, Los AngelesEvent Overview
GreenPearl Events, organizer of executive-level conferences and networking events is pleased to introduce the DISTRESSED REAL ESTATE SUMMIT: CALIFORNIA, on February 4th at the Westin Bonaventure in Los Angeles. The DISTRESSED REAL ESTATE SUMMIT is the nation’s premier distressed real estate and debt conference, offering a content-rich agenda combined with the ample networking time necessary for new business development in today’s climate.
The DISTRESSED REAL ESTATE SUMMIT will bring together the Southern California commercial and residential real estate communities for this important full-day program on the state of distress, identifying opportunities for investors, while providing solutions for highly-leveraged investors If you work in Southern California commercial or residential real estate, have holdings in this region, considering investment exposure to this market, or would like to meet the key players, make plans to attend the DISTRESSED REAL ESTATE SUMMIT: CALIFORNIA on February 4th.
Harder You Work & Luckier You Are – “Quality” w/ Donald Trump
Being a Trump fan when many are not, the following link will take you to a great 40 minute video with Donald Trump on the show “The Millionaire Inside” about going to college, luck, quality service, making deals, entrepreneurship, 40 wall street in NYC, employees, being smart, persistence, negotiation, branding and timing.
Receivership – Douglas Wilson – KPBS
I went to a great conference this morning, which is very relevant in the commercial real estate industry and these tough economic times. Key speaker Douglas Wilson spoke this morning at the "Preserving Asset Value Through Receivership – The Real Story From the Trenches" seminar in Mission Valley. Hosted by www.sdreceivers.org it was a very good seminar discussing CMBS as well as small real estate secured notes and what is happening due to the lack of capital in the banking world as it relates to funding and refinancing commercial real estate loans. For more information on this topic, there is an excellent clip on the local KPBs website featuring Douglas Wilson and Maureen Cavanaugh. You can check it out here
