Finance Mortgage Banking
Economic Update – CRE Defaults Head for High Ground
June 10, 2009
A new report by Real Estate Econometrics, based on FDIC data, puts the commercial real estate loan default rate at its highest level in more than a decade and a half, at least those loans held by regulated deposit-taking institutions—banks and thrifts, for the most part. The default rate soared from 1.62 percent in the last quarter of 2008 to 2.25 percent in the first quarter of 2009. That rate doesn’t include defaults on loans associated with multi-family rental properties, which Real Estate Econometrics put at 2.45 percent in the first quarter of 2009, up 68 basis points from the previous quarter.
CRE Mortgage Starts Plummeted in '08: MBA
June 05, 2009
After seeing phenomenal commercial mortgage originations in 2006 and 2007, figures from 2008 show a 65 percent decrease in volume, according to the Mortgage Bankers Association's 2008 commercial real estate/multi-family finance report.
M-F Mortgage Delinquencies Increase in Q1, Says MBA
June 03, 2009
The weakening economy and continued credit crunch led to increases in commercial/multifamily mortgage delinquencies during the first quarter of 2009, according to the latest Commercial/Multifamily Delinquency Report, released by the Mortgage Bankers Association.
Economic Update - Mortgage Rate Worries Weigh on Housing Market
June 01, 2009
General Motors was in the news over the weekend before the largest bankruptcy in U.S. history (that is, its own), but more worrying for many policymakers, economists and ordinary borrowers is last week's sudden spike in mortgage interest rates.
Economic Update - Foreclosures Spike Among Prime-Mortgage Holders
May 29, 2009
The tsunami of residential foreclosures may have started, back in the days of easy mortgage money, with borrowers whose only qualification was being able to fog a mirror. About half of those kinds of subprime mortgages have resulted in a foreclosure outcome, and Alt-A-inspired foreclosures are spiking too. But now, according to the Mortgage Bankers Association, foreclosures on prime fixed-rate loans represent the largest share of brand-new foreclosures.
As Condo Market Remains Tight, Miami Tower Scores Key Fannie Approval
May 27, 2009
In the midst of the sluggish economy and tight credit market, condominium developers are having a tough time selling units. As a result, many projects across the nation have been reverted to rental or stalled outright. But in the midst of one of the most hard-hit condo markets--South Florida--at least one developer is breathing a bit easier.
Stimulus Programs, Financial Market Intervention to Benefit CRE--But Not Right Away
May 19, 2009
The government's pumping up of the economy via various programs created by the nearly $800 billion economic stimulus package and interceding in the financial market will indirectly incite the revival of the commercial real estate market, according to a new report by Marcus & Millichap Real Estate Investment Services. But the major impact is unlikely to be felt this year.
Economic Update - Spooked by Economy, Consumers Consume Less
May 14, 2009
The U.S. Department of Commerce reported that retail sales dropped by 0.4 percent in April, compared with the previous month. The decline was a little more than expected, but less than the revised March drop of 1.3 percent. The recent two months of decline followed unexpected increases in consumer spending in January and February.
With Pool of Distressed Assets on the Rise, A10 Kicks Off $100M Lending Program
May 11, 2009
The number of distressed assets continues to grow and lenders across the country have been debuting new programs and establishing funds to provide loans for owners and buyers of these troubled assets in a climate where securing financing has become a monumental challenge. Now, Boise, Idaho-based A10 Capital has jumped on the bandwagon with $100 million in capital for the origination of first mortgage commercial real estate loans and the supplying of financing for commercial real estate-secured distressed debt acquisitions through its new Lending Group.
Economic Update - Smaller Banks Face CRE Woes
May 07, 2009
On Wednesday, the eve of the stress test results, observers were wondering just how much trouble sour commercial real estate loans are going to cause those banks that hold them. Knee deep, waist deep, or up to their eyeballs?
CMBS Sector Sees Jump in Special Servicing Loans
May 04, 2009
CMBS loan delinquencies and defaults are pushing up special servicing volume at a blistering pace, according to a pair of first-quarter updates published last week by Fitch Ratings.
Relative Stability of Seniors Sector Helps Borrower Bring in $90M in Loans
April 28, 2009
As is the case with the multi-family industry, seniors housing is faring better than such real estate sectors as office and retail, and can still rely on the government for financing assistance in the midst of the credit crunch. In both cases, it is market fundamentals that are buoying the sectors. A case in point is Cambridge Realty Capital Cos.' recent closing of $90.6 million of HUD-insured Section 232 loans on behalf of an Illinois-based borrower for the refinancing of a group of 10 skilled nursing facilities, referred to as the Granite Portfolio.
Economic Update - Hospitality Industry Has the Jitters
April 27, 2009
The specter of a swine flu pandemic excited the news media over the weekend, based on outbreaks in Mexico and a handful of cases in the United States. Few industries are likely more worried about such a prospect than the travel business, including hotel owners and operators.
Economic Update - IMF Feels Exceedingly Bearish
April 23, 2009
Only a year ago, the International Monetary Fund predicted growth of 1.9 percent for the world economy in 2009, a prediction that seems positively quaint now. On Wednesday, the IMF called the current crisis "by far the deepest global recession since the Great Depression," and urged governments to stimulate their economies more. The organization is now predicting a worldwide economic contraction of 1.3 percent in 2009, with the U.S. economy shrinking 2.8 percent, a largest decline since 1946.
Big Ticket M-F Financing Deals Continue to Flow as Camden Closes $420M Loan
April 21, 2009
Despite real estate market turmoil, sizeable multi-family financing deals continue to roll in, and Camden Property Trust has just joined the ranks of apartment property companies that are benefiting from government-controlled mortgage giants Fannie Mae and Freddie Mac's ongoing willingness to dole out money.
Economic Update - Commercial RE on the Edge?
April 20, 2009
The idea that commercial real estate might be the next big thing to implode--which is all too familiar within the commercial real estate industry--is finally getting some mainstream attention. On Saturday, speaking at a conference at Vanderbilt University, Atlanta Federal Reserve Bank president Dennis Lockhart said that "on our watch list this year, as a risk to the (U.S. economic) outlook, is continuing worsening in the commercial real estate sector."
Economic Update - Merging Homebuilders Look to Survive
April 09, 2009
Only a few years ago, it would have been just another bit of the M&A torrent, but these days the acquisition of homebuilder Centex by the even larger homebuilder Pulte Homes in a $1.3 billion stock-for-stock deal is considered a survival gambit. Small wonder: as separate entities, Centex lost $664 million in the quarter ended in December, while Pulte lost $338.2 million in its most recent quarter.
Fitch: Looking for Liquidity, REITs Find Choices, Conundrums
April 06, 2009
Staying liquid is job one for many equity REITs these days, and the lack of a CMBS or unsecured market makes that a formidable task. Most of the choices bring both answers and potential pitfalls at a time of unusual urgency, contends Fitch Ratings in a recent report.
Brandywine Closes $90M Loan in Philadelphia
April 01, 2009
Brandywine Realty Trust has closed an $89.8 million first mortgage financing on Two Logan Square, a 702,006- square-foot, 99 percent leased, class A, office tower in Philadelphia, Pa.
Economic Update - CityCenter Still On -- For Now
March 30, 2009
For the moment, the CityCenter development in Las Vegas--lately bedeviled by a feud between co-owners MGM Mirage and Dubai World--is still an ongoing thing, thanks to a $200 million payment by MGM to the joint venture late last week. "It is as an acceptable, albeit temporary, solution to the liquidity issues that MGM Mirage is facing," Dubai World, which is owned by the emirate, said in a statement. Left unspoken was the fact that CityCenter's main problem seems to be the unlucky timing of getting under way just ahead of a severe recession, something not even $200 million is likely to fix in the long run.
Economic Update - Glimmers of Good News?
March 26, 2009
Are the recent economic initiatives by the U.S. government putting the country on "the road to hell," to quote a certain Czech politician whose own government imploded recently? It is worth noting that good intentions are known to be a common paving material on the road to that unpleasant destination. Or will our ultimate destination be a little less dramatic?
Economic Update - Home Prices See First Uptick in a Year
March 25, 2009
After the surprising announcement earlier this week that existing home sales jumped in February, the housing market got another bit of unexpected news on Tuesday, when the Federal Housing Finance Agency said that housing prices actually moved up a little in January 2009 compared with December 2008. The agency's House Price Index increased 1.7 percent, representing the first time in fully a year that the index has not moved downward.
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