March 2010

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Tension over US commercial property loans

Submitted by jbonica on Sat, 03/27/2010 - 20:31

Bubblenomics

By Suzanne Kapner

Tensions are rising between US banks and their examiners over how to treat souring commercial real estate loans, a looming problem for the financial system as it grapples with falling property prices.

Blind Pool Party

Submitted by jbonica on Sat, 03/27/2010 - 20:26

Bubblenomics

By Peter Slatin

It was just over a year ago that the NAREIT index of REIT shares hit bottom after dropping 75% from its peak in February 2007. It has since rebounded 94%. A nice start, but prices would have to better than double from today's level to get back to where they were.

With hindsight, the bubble in commercial real estate looks pretty absurd. Purchasers of commercial property were so convinced that rents would go up forever that half-empty buildings changed hands at higher prices than those filled with solid rent-paying tenants.

Behind Lehman's Faith in Real-Estate Riches

Submitted by jbonica on Sat, 03/27/2010 - 20:15

Bubblenomics

By ANTON TROIANOVSKI

On May 7, 2007, Lehman Brothers Holdings Inc.'s real-estate chief sent a memo to the bank's executive committee on the ill-fated deal to acquire apartment developer Archstone-Smith Trust. The possible profit, according to the memo: $1.3 billion over 10 years.

Biz Break: A 'fragile' real estate recovery; plus: Google-China dispute

Submitted by jbonica on Sat, 03/27/2010 - 20:06

Bubblenomics

Today: Reports show a "fragile" recovery in the nation's housing market. A Chinese Internet official criticizes Google's move to redirect users to its Hong Kong search engine. Adobe Systems releases a bullish forecast for its current quarter.

Home sales fall

The nation's real estate recovery may be in trouble, at least according to a report today from the National Association of Realtors.

Existing-home sales nationwide were down 0.6 percent last month to a seasonally adjusted rate of 5.02 million homes, the association reported.

Monday biz roundup: Commercial real estate glut, Oregon's new college savings plan

Submitted by jbonica on Sat, 03/27/2010 - 19:49

Bubblenomics

Here's a roundup of the morning's news -- and top stories from the weekend -- from The Oregonian's business desk.

Stocks: Markets are flat in very early trading.

Real estate: The real estate collapse that started three years ago in the housing market continues to fester in commercial real estate.

Timber industry: As Congress moves to kickstart the biomass market -- the burning of waste wood to generate electricity -- incentives and subsidies threaten Oregon wood plants' supplies.

Agriculture: A tiny, foreign fruit fly arrived in Oregon last summer, threatening Oregon's crops.

Real Estate: Empty storefronts multiply, retail rents to slip this year

Submitted by jbonica on Sat, 03/27/2010 - 19:28

Bubblenomics

Orlando's retail-vacancy rate will rise again this year, partly as a result of blocks of vacant space in properties built in recent years, according to a report from Marcus & Millichap.

The vacancy rate for shopping centers constructed since 2007 topped 20 percent last year — much more than the market-wide rate for all properties. Continuing softness in the job market is expected to hold back store visits and suppress spending, further limiting the number of tenants available to fill new centers, the commercial real estate investment firm said.

PhillyDeals: Bringing down the cost of tearing down

Submitted by jbonica on Sat, 03/27/2010 - 19:21

Bubblenomics

By Joseph N. DiStefano

It has gotten cheaper to knock down abandoned rowhouses in Philadelphia. Thank hard times and changes in the way the city hires wreckers.

A typical knockdown deal used to take three months and three contracts: one for demolition, one for slapping stucco on walls of adjacent houses, and one for fixing the adjoining roofs.

The average cost each year from 2006 to '09, was $24,000 per house, according to city Licensing and Inspections data.

Commercial real estate woes loom over local banks

Submitted by jbonica on Sat, 03/27/2010 - 19:15

Bubblenomics

BY JIM GALLAGHER

To see a St. Louis banker squirm, mention three words: commercial real estate. It may be the next major mess here.

Banks based in St. Louis have $10.2 billion such loans on their books. They make up roughly 36 percent of all loans at local banks. As of Dec. 31, the last data available, 9.2 percent of commercial real estate loans were troubled, compared to 4.5 percent for all loans. Bankers fear that number will rise.

Foreclosure of Commercial Properties Rises in Metro Atlanta

Submitted by jbonica on Sat, 03/27/2010 - 18:33

Bubblenomics

In light of a weak economy and the pressure of loans coming due, hundreds of commercial properties in the metro Atlanta area―including some self-storage facilities―face potential foreclosure, according to an article in the Atlanta Journal Constitution. Many businesses have already given up the ghost, as evidenced by empty storefronts and buildings across the region.

How Do We Fix Fannie Mae and Freddie Mac?

Submitted by jbonica on Sat, 03/27/2010 - 18:28

Bubblenomics

By Jennifer Schonberger

The White House and Congress have proposed legislation to create a safer financial system in the wake of the recent crisis, but they have yet to deal with two of the biggest culprits: Fannie Mae and Freddie Mac (NYSE: FRE). The two were guilty of doing exactly what Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM), et al did: enabling a bubbly housing market.

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