Finance CMBS
Nov 30, 2007
By: Paul Rosta, Senior Associate Editor
The distressed capital markets are at the center of the real estate industry’s concerns today. Over a five-day period, two major conferences in Manhattan are providing an insider’s view of the roiled investment picture.
Attendees at a conference sponsored by the New York University Real Estate Institute received a mixed picture of the capital markets’ prospects. “I heard there is no shortage of liquidity among the various parties,” said D. Kenneth Patton, divisional deal of the institute, summing up a day of comments from some three dozen economists, developers and financiers. Moreover, Patton told CPN this morning, the panel discussions led him to conclude that investors are now discussing deals that will help to start moving some of the billions of dollars of distressed CMBS paper through the market. Most experts consider that step the necessary catalyst for stabilizing the debt and investment markets.
Patton moderated a luncheon panel that included a quartet of New York City’s heavyweight developers and investors, and noted that all have an exceptional store of dry powder available through private funds and institutional partners.
Nevertheless, those four leaders warned of difficult times immediately ahead. “It’s going to be tough in ‘08,” SL Green Realty Corp. CEO Marc Holliday told the audience, according to an account published by Ilaina Jones of Reuters. SL Green has been one of New York City’s most active investors this year and expanded its Manhattan holdings through its $6.2 billion acquisition of Reckson Realty Corp.
Refinancing will be especially challenging. “The distress will come when people will have the need to (bring) their property to market, and that need only comes when your financing runs out and you have to refinance in a market like this,” noted William Mack, senior partner of Apollo Real Estate Advisors, Reuters reported. Among the most closely watched refinancing issues in Manhattan, if not the nation, is Macklowe Properties’ efforts to secure financing for its nearly $7 billion purchase of a Manhattan trophy office portfolio from Equity Office Properties Trust. Macklowe faces a challenging task because it used short-term loans to finance the acquisition, but local insiders have said they expect the firm’s canny founder, Harry Macklowe, to pull off the deal.
Challenges and opportunities in the capital markets will likely also dominate the discussion on Monday during CPN’s annual New York Investment Summit. A wide range of industry leaders are scheduled to participate, including World Trade Center developer Larry Silverstein, RexCorp Realty CEO Scott Rechler, Thor Equities CEO Joseph Sitt, and Mary Ann Tighe, CEO of the New York City tri-state region for CB Richard Ellis Inc.
By: Paul Rosta, Senior Associate Editor
The distressed capital markets are at the center of the real estate industry’s concerns today. Over a five-day period, two major conferences in Manhattan are providing an insider’s view of the roiled investment picture.
Attendees at a conference sponsored by the New York University Real Estate Institute received a mixed picture of the capital markets’ prospects. “I heard there is no shortage of liquidity among the various parties,” said D. Kenneth Patton, divisional deal of the institute, summing up a day of comments from some three dozen economists, developers and financiers. Moreover, Patton told CPN this morning, the panel discussions led him to conclude that investors are now discussing deals that will help to start moving some of the billions of dollars of distressed CMBS paper through the market. Most experts consider that step the necessary catalyst for stabilizing the debt and investment markets.
Patton moderated a luncheon panel that included a quartet of New York City’s heavyweight developers and investors, and noted that all have an exceptional store of dry powder available through private funds and institutional partners.
Nevertheless, those four leaders warned of difficult times immediately ahead. “It’s going to be tough in ‘08,” SL Green Realty Corp. CEO Marc Holliday told the audience, according to an account published by Ilaina Jones of Reuters. SL Green has been one of New York City’s most active investors this year and expanded its Manhattan holdings through its $6.2 billion acquisition of Reckson Realty Corp.
Refinancing will be especially challenging. “The distress will come when people will have the need to (bring) their property to market, and that need only comes when your financing runs out and you have to refinance in a market like this,” noted William Mack, senior partner of Apollo Real Estate Advisors, Reuters reported. Among the most closely watched refinancing issues in Manhattan, if not the nation, is Macklowe Properties’ efforts to secure financing for its nearly $7 billion purchase of a Manhattan trophy office portfolio from Equity Office Properties Trust. Macklowe faces a challenging task because it used short-term loans to finance the acquisition, but local insiders have said they expect the firm’s canny founder, Harry Macklowe, to pull off the deal.
Challenges and opportunities in the capital markets will likely also dominate the discussion on Monday during CPN’s annual New York Investment Summit. A wide range of industry leaders are scheduled to participate, including World Trade Center developer Larry Silverstein, RexCorp Realty CEO Scott Rechler, Thor Equities CEO Joseph Sitt, and Mary Ann Tighe, CEO of the New York City tri-state region for CB Richard Ellis Inc.
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