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Construction Loans Crumbling

Just a reminder that I said this in August 2008 Construction Loans Default and September 2008 Construction Loans Overwhelm Banks:

Reports filed by banks with the Federal Deposit Insurance Corporation indicate that at the end of June about one-sixth of all construction loans were in trouble. With more than half a trillion dollars in such loans outstanding, that represents a source of major losses for banks.”

Faltering Construction Loans = More Bad News for Banks – Barry Ritholtz – The Big Picture – 6 September 09

Deutsche Bank predicts that “construction loans will be the epicenter of bank loan problems”

Deutsche Bank: Construction Loan Defaults Coming – Barry Ritholtz – The Big Picture – 5 August 09

NY Times: One-sixth of Construction Loans in Trouble

Calculated Risk – 5 September 09

Posted in Real Estate Investing.


Sweetheart of a Deal

I love the last line: “The deal positioned Oxford to move forward with further acquisitions in the London market…..”    Just how many buildings with no income do they want to buy?

Nomura lands six-year London rent breakFinancial Times – Daniel Thomas – 31 August 2009

Nomura, the Japanese investment bank, will not pay any rent for almost six years on its new headquarters building in the City of London…

Mark Lethbridge, partner at Drivers Jonas and adviser to Nomura, said the transaction was the largest deal to date on a new office building in London. “We’ve secured this on terms I’m unlikely to see again in my career,” he added.

The landlord, Oxford Properties, is the property arm of an Ontario pension fund and UBS. It was advised by Knight Frank and CBRE…

The bank has signed a 20-year lease and agreed to an initial rent of about £40 per sq ft, lower than the rents of nearly £70 per sq ft demanded during the boom. But it will not have to pay any rent until 2015.

The deal positioned Oxford to move forward with further acquisitions in the London market, said Paul Brundage, Oxford vice-president.

Click here to read the full article

Posted in Real Estate Investing.


A Perfect Day

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Posted in Humor or Humourous?.


New York’s Addictive Economy

An interesting article about the role of human capital in New York’s economic development (albeit from – in my opinion – an overly conservative source). But the subtext is perhaps even more interesting referencing New York’s recovering from the American Revolution by exporting an aphrodisiac to China, then supplying sugar to an addicted US population, and finally the ultimate addictive aphrodisiac: money – with side trips about pirating books and the economic uplifting virtues of the brasserie.

The Reinventive City - City Journal - Edward L. Glaeser – 13 July 2009

…Over the centuries, New York City has survived crisis after crisis…But none of these shocks struck as hard as the American Revolution…after Cornwallis’s defeat at Yorktown…New York’s population declined by roughly 60 percent. The city’s trade model was also under attack, as British and Spanish colonies imposed severe restrictions on American commerce, leaving New York’s large shipping community empty-hulled.

The Revolution had, however, freed American merchants from the British East India Company’s monopoly on trade with China. One of them, Daniel Parker, learned that the Chinese were mad for ginseng, allegedly an aphrodisiac. He also knew that American ginseng, grown in Appalachia, cost far less than European, giving American shippers a decided advantage. Armed with this information, he launched a successful venture that, by sending a ship from New York to Canton and back in 1784 and 1785, established the viability of the China trade…

The harbor also encouraged the growth of industry, such as sugar refining, the city’s primary industry in the early nineteenth century…Manhattan’s largest industry today, printing and publishing, also grew out of its port…New York’s shipping prominence allowed the Harper brothers to get pirated British books before their Philadelphia competitors could…

the competitive maelstrom ignites industrial diversity and innovation. Forty years ago, Jane Jacobs pointed out that the brassiere was invented not by lingerie specialists but by an experimenting New York dressmaker…

Starting in the early 1970s, Michael Milken began convincing money managers that high-yield corporate debt, though it looked like junk, had high returns relative to its historical risk when bundled together into diversified portfolios…Meanwhile, Robert Dall was pioneering mortgage-backed securities at Salomon Brothers…

Click here for the full story

Posted in Finance & Economics, Planning & Design.


Quote du Jour: Warren Buffet

Invest only in businesses that an idiot can run, because sooner or later an idiot will.

Warren Buffet

Posted in Quotes.


Why Does This Seem So Apropos?

Fed Intends to Hire Lobbyist in Campaign to Buttress Its ImageBloomberg.com – Robert Schmidt – 5 June 09

The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank’s growing power over the U.S. financial system, people familiar with the matter said…Linda Robertson …headed the Washington lobbying office of Enron Corp…also an adviser to all three of the Clinton administration’s Treasury secretaries….Lawrence Summers, Robert Rubin and Lloyd Bentsen…”People have been asking whether the Fed is capable of getting its job done right,” said Lynn Turner, a former chief accountant at the Securities and Exchange Commission. “Hiring a former lobbyist from Enron will surely make one wonder.”..

Posted in Finance & Economics.


Shopping Mall or Corporate Headquarters?

Shopping Mall or Corporate Headquarters?Businessweek via A Daily Dose of Architecture3 May 09

From above this large complex, marked by a T-shaped skylit building, looks like it could be a shopping mall, especially with the numerous parking lots. But could it be a corporate headquarters, similar in scale to a shopping mall?


mall-or-hq

Click here for answer

Posted in Planning & Design.


Sex, Money, Entrepreneurship, Befuddled Tax Collectors, Religious Hypocrites, Bribery, Submissive Democrats – Too Good to Pass Up

Threads and Leather Straps Bind a BusinessNew York Times – Adam B. Ellick – 27 April 09

… deep in the nation’s commercial capital, just next door to a mosque and the offices of a radical Islamic organization, in an unmarked house two Pakistani brothers have discovered a more liberal and lucrative use for the scourge: the $3 billion fetish and bondage industry in the West.

Their mom-and-pop-style garment business, AQTH, earns more than $1 million a year manufacturing 2,000 fetish and bondage products, including the Mistress Flogger, and exporting them to the United States and Europe….

It helps that the dozens of veiled and uneducated female laborers who assemble the handmade items – gag balls, lime-green corsets, thonged spanking skirts – have no idea what the items are used for. Even the owners’ wives, and their conservative Muslim mother, have not been informed.

“If our mom knew, she would disown us,” said Adnan, seated on a leopard-print fabric covering his desk chair…

Even customs officials were perplexed at how to tax the items, not quite sure what they were, they said.

Recently, when a curious employee inquired about the purpose of the sleep sack, a sleeping bag-like product used in certain kinds of bondage, she was told it was a body bag for the American military in Iraq…

Still, word of the business has at times escaped. Last year four “powerful guys” from a conservative Muslim group threatened to burn down the factory if it was not closed within a week. The brothers calmly explained that it was merely a business, and that the items were not used in Pakistan. The next day they bribed a local Islamic political organization to ensure their safety…

Then, they discovered a kind of straitjacket online. At first, they thought it was used for psychiatric patients, but it quickly led them to learn about the lucrative fetish industry.

Today, they sell their products to online and brick-and-mortar shops, and to individuals via eBay. Their market research, they said, showed that 70 percent of their customers were middle- to upper-class Americans, and a majority of them Democrats. The Netherlands and Germany account for the bulk of their European sales.

“We really believe that if you are persistent and hard working, there is an opportunity, in any harsh environment, even in an economically depressed environment like Pakistan,” Rizwan said.

A major perk, they say, is attending international fetish shows to see how their products hold up in action.

“I go to Sin City every year,” said Rizwan, referring to Las Vegas in a sheepish laugh. It’s all business, he said. “Clients know our country and culture, and they don’t invite us to participate. We’re a little bit shy.”

Posted in Finance & Economics.


Quote du jour: Tom Petty

“As we celebrate mediocrity,
All the boys upstairs wanna see,
How much you’ll pay for
What you used to get for free.”

Tom Petty


Posted in Quotes.


Peter Zumthor Wins Pritzker Prize

Swiss architect Peter Zumthor wins the Pritzker and deservedly so. One of my favorite architects who spends his time on timeless designs instead of his ego. Links to his articles and photos of his work:

Peter Zumthor is awarded the Pritzker Prize 2009Dialog: Notes on architecture from Switzerland

Zumthor in the UKArchitecture MNP

Peter Zumthor speaks to the Architect’s JournalThe Architect’s Journal: the home of British architecture

Paul Goldberger: Peter Zumthor’s Quiet PowerThe New Yorker

Peter Zumthor Wins the PritzkerInhabitat

Thomas Mayer Archive

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Bregenz Museum – The New Yorker (Photograph: Rory Hyde, CC BY-SA)

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Spa at Hotel Therme (Inhabitat)

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Brother-Claus- Chapel (Thomas Mayer Archive)

Posted in Planning & Design.