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- Successful $400M Developers Diversified offering revives CMBS market
The spreads were "pleasantly tight" for the sold-out Developers Diversified Realty sale of $400 million of debt secured by commercial mortgages, said James Grady of Deutsche Asset Management. The offering backed by lead underwriter Goldman Sachs Group was the first new CMBS issue to make use of attractive government financing under the Federal Reserve's Term Asset-Backed Securities Loan Facility. The transaction was closely watched because the CMBS market effectively shut down after the credit crunch hit. Bloomberg
(11/16)
, The Wall Street Journal/Dow Jones Newswires
(11/16)
, Financial Times (tiered subscription model)
(11/16)
, Reuters
(11/16)
    
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- Bernanke: Commercial real estate holding back U.S. recovery
Federal Reserve Chairman Ben Bernanke warned in a somber assessment that the nation's economic recovery will gather strength slowly due to the "headwinds" provided by commercial real estate's deepening problems, feeble bank lending to businesses and persistent high unemployment. "Some important headwinds -- in particular constrained bank lending and a weak job market -- likely will prevent the expansion from being as robust as we would hope," he told a gathering of Wall Street executives, economists and traders. The Wall Street Journal
(11/17)
- Fitch: Commercial real estate a greater risk for smaller banks
The deepening downturn of the commercial real estate business is a greater threat for midsize regional banks and smaller local banks than it is to the nation's biggest banks, Fitch Ratings said. Credit rating downgrades are likely to be much more common for the smaller banks than the big ones, the ratings agency said. "Loan losses are increasingly likely given the expectations for ongoing declines in commercial real estate markets," said Thomas Abruzzo, a managing director at Fitch. The New York Times/The Associated Press
(11/16)
- Analysis: Dozens of banks in trouble despite TARP aid
Despite receiving capital injections from the U.S. government's Troubled Asset Relief Program, at least 27 banks have either been seized or threatened by regulators. Government officials knew some of the lenders were on the verge of collapse when they awarded them TARP funds. The situation raises questions about how the $700 billion TARP is being managed. Treasury officials defend the agency's management of the program. The Wall Street Journal
(11/17)
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- REALpac's Brooks: Canadian REITs continue to grow
Canadian REITs have very strong balance sheets and are "on the acquisition warpath," both in Canada and the U.S., said Michael Brooks, CEO of the Real Property Association of Canada, interviewed on REIT.com. "They're as strong as they've ever been," he said. Canadian REITs have been raising money through offerings of equity and convertible debt, he said. Also, since none of the Canadian banks are in financial difficulty, REITs there can access debt at the property level from banks, Brooks said.  REIT.com
(11/16)
| Real Estate Marketplace | | |
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- After seizing 150 banks, FDIC a major U.S. property owner
Along with 150 banks taken over when they failed, the U.S. government got an enormous mixed bag of properties, together valued by appraisers at about $1.8 billion. The FDIC is working at selling off the assets but it is a task that could take years. The bank regulator ended up with more than 5,000 parcels of undeveloped or partially developed land, office buildings, stores, shopping centers and houses. They include a $1.7 million lodge in Colorado and an $18,700 clapboard house in Alabama. The Wall Street Journal
(11/17)
- Tim Murphy: To make money, buy existing London buildings now
The key to making a profit on London property today is to buy existing buildings now, taking advantage of the cheap British pound and low interest rates, said Tim Murphy, a managing director at IP Global, interviewed on CNBC. "It's really a yield story with the cheap money," he said. With construction down 50% from its peak, there are certain to be big rent increases in a few years, Murphy said. Current yields going in are "pretty good," too, he said. CNBC
(11/16)
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| Policy Watch | | |
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- Volcker opposes proposal on accounting standards
Former Federal Reserve Chairman Paul Volcker, a White House economic adviser, said a proposal that would give banking supervisors power to sidestep accounting rules is "a terrible idea." Volcker, who has been a critic of mark-to-market accounting rules, said he is concerned that politics might be compromising the independence of accounting standards setters. Volcker's comments come as a House committee is poised to vote on the proposal. The New York Times
(11/16)
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