Report: Two Major Commercial Mortgages Near Default – CalculatedRisk – 18 November 08
…The $209 million Westin Portfolio loan and the $125 million loan for Promenade Shops at Dos Lagos … of loans bundled into bonds are about to default on their debt, according to Credit Suisse Group AG…
The analysts note that these were “pro forma” loans, and were based on significantly higher operating income in the future. Pro forma loans were the “stated income” loans for commercial properties…
Commercial Real Estate: Past its Prime? -Paul Kedrosky’s Infectious Greed – 18 November 08
The recent moonshot in commercial real estate default risk indices makes it seem likely that the sector is finally tumbling, as it has seemed obvious for some time it would. Check the following graph (via Markit) of the CMBX to see the recent spike upward. It’s darn impressive.
Canadian REITs: Is Nothing Safe? – Seeking Alpha – 18 November 08
$2B Deal for Pair of NYC Offices Reportedly Falls Through – Commercial Property News – Adam Perrotta -18 November 08
Two New York City office properties are back on the market, as a deal under which George Comfort & Sons would have acquired the assets–1540 Broadway and Worldwide Plaza–for some $2 billion has fallen through.
The sale agreement was originally reached in mid-September, and at the time, was partially contingent on NBC leasing a large portion of Worldwide Plaza, which is located at 825 Eight Avenue. That lease never happened, and the deal has been nixed, according to Crain’s New York.
With the original deal now dead, the buildings have begun to be remarketed. Crain’s cited experts who pegged the likely sale price of the assets at $1.2 billion given the current economic turmoil and credit freeze. It is unclear if George Comfort & Sons will re-bid on the buildings at a lower price.
The aborted sale is the latest chapter in the saga of the former Equity Office Properties portfolio, a group of seven Manhattan office properties acquired for $7 billion by Macklowe Properties in 2007. Macklowe ran into trouble paying back short term loans for the investment, and in February of 2008, a group of lenders headed by Deutsche Bank repossessed the properties. Since then, five of the seven assets have been sold at a significant loss compared to what Macklowe acquired them for.
Tokyo office building rentals mark first fall in six years – MarketWatch – Chris Oliver – 17 November 08
Rental prices in new office buildings in Tokyo fell for the first time in six years, according to an October survey conducted by Nikkei Inc. An index of asking prices on commercial space in buildings less than one year old fell to 152.1, down 43.48 points from a year earlier. Those in Osaka came to 134.23, down 31.28 points. Declines in both cities were the largest since the autumn of 1993. The survey also showed that asking rents in buildings more than a year old climbed slightly
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