Cohen Commercial Equity Call today 1-800-928-6154
News
News
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
Cohen Commercial News CCN
Apartment Vacancies Highest Level
Since 1986
October 6, 2009
Apartment vacancies recently hit their highest level since 1986, surging in cities
across the nation, according to research conducted by Reis Inc., New York. The
U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis which tracks
vacancies and rents in the top 79 U.S. markets. The rate is expected to climb
further in the fall and winter, when rental demand is weaker, pushing vacancies to
the highest levels since Reis began its analysis in 1980. Weak apartment rentals
could spell trouble for multifamily owners that need to refinance or sell their
properties in the year ahead. Reis said some markets were still chugging along
last year but the surge in unemployment has dampened the sector's outlook.
Life Firms' Private Commercial Mortgage Returns Improve
October 1, 2009
Private commercial mortgages held by life companies gave them a 2.25% total
return for the second quarter of 2009, the best performance since the fourth
quarter of 2007, according to the LifeComps Commercial Mortgage Index. This
makes two consecutive quarters of positive returns for these loans. In the first
quarter of this year, life insurers got a 1.63% return. In the fourth quarter of last
year, these loans had a loss of 3.16%, and in the third quarter, they had a loss of
2.08%. Of the total return for the most recent period, 1.68% was from income and
0.57% was from price. LifeComps said this was the first price gain since the fourth
quarter of 2007. Over a 12-month period, however, private commercial
mortgages had a loss of 1.46%. The income return was 6.74% but the price loss
was 8.2%. By property type, for the second quarter, mortgages secured by office
buildings had a 2.67% return, apartment building mortgages had a 2.47% return,
industrial property loans had a 1.81% return and retail property loans had a
1.75% return. There are 6,400 active loans in the LifeComps database with an
aggregate principal balance of approximately $85 billion.
More Trouble in Commercial: Luxury Hotel Owners
September 25, 2009
Luxury hotel owners are at risk of defaulting on their commercial mortgages as
the recession reduces occupancy rates, and the credit crunch constrains
refinancing as banks and other lenders become weary of renewing existing lines.
According to Realpoint LLC, a credit rating company, loans secured by more than
1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of
default. Realpoint LLC has put some of the biggest loans on its watch list
because of late payments, according to Bloomberg. "All segments are showing
signs of distress, but the luxury segment carries much higher loan balances and
is more clearly affected," said Frank Innaurato, managing director of CMBS
analytical services at Realpoint.
Two More Mortgage Vulture Funds Go Public
September 25, 2009
Two additional mortgage vulture funds went public this week — both as REITs —
but their IPOs failed to catch fire with investors. Colony Financial Inc., Los
Angeles, sold 12.5 million shares, raising $250 million. Apollo Commercial Real
Estate Finance, New York, sold 10 million shares and raised $200 million. Both
are trading in a tight range with somewhat light volume. The two were formed to
buy distressed mortgage assets, in this care, commercial-related notes. The
deals were originally scheduled to price on Tuesday, but were postponed until
later in the week. This past summer PennyMac Mortgage Investment Trust of
Pasadena, Calif., went public, raising about $320 million, about half of what it was
hoping for. PennyMac invests in, and services troubled residential loans. Sources
tell National Mortgage News PennyMac has looked at several portfolios but has
only wound up buying a few.
Fitch: Genworth Benefits from Canadian MI IPO
September 25, 2009
The partial spin off of its Canadian mortgage insurance business is one of the
factors that has strengthened the capital levels at Genworth Financial Inc.,
Richmond, Va., and thus Fitch Ratings, Chicago, is affirming the life insurance
subsidiaries' "A-" insurer financial strength rating. Although Fitch is worried about
investment losses at the life operations, it added projected losses from mortgage
loans and alternative investments would be modest. If more capital is needed at
Genworth, Fitch noted it could further monetize its remaining equity holdings in
the Canadian mortgage insurer, currently valued at $1.4 billion. The report noted
Genworth "remains exposed to a troubled U.S. mortgage insurance operation.
Explicit in Fitch's rating (of the life insurance unit) is an assumption Genworth
would not provide any future capital support to the U.S. mortgage insurance
operations. Fitch continued that if this assumption were incorrect, the life units'
ratings would likely be downgraded.
Commercial Debt Down in 2Q09
September 25, 2009
While the amount of multifamily debt outstanding increased between the first and
second quarters of this year, the total commercial/multifamily debt decreased by
0.3%, according to data from the Mortgage Bankers Association. The $3.47
trillion in commercial/multifamily mortgage debt outstanding recorded for the
second quarter by the Federal Reserve was a decrease of $9.9 billion from the
first quarter 2009. Multifamily mortgage debt outstanding grew to $914 billion, an
increase of $6 billion or 0.7% from first quarter. Commercial banks continue to
hold the largest share of commercial/multifamily mortgages, $1.55 trillion, or 45%
of the total. CMBS, CDO and other ABS issuers hold $714 billion, or 21% of the
total. Life insurance companies hold $313 billion, or 9% of the total, and savings
institutions hold $195 billion, or 6% of the total. The GSEs, agency-backed
mortgage pools and GSE-backed mortgage pools, including Fannie Mae, Freddie
Mac and Ginnie Mae, hold $195 billion in multifamily loans that support the
mortgage-backed securities they issued and an additional $157 billion in "whole"
loans in their own portfolios. The agencies are the largest holders of multifamily
loans, with a 38% share, followed by commercial banks with a 24% share,
securities holders at 12%, state and local governments at 8%, thrifts at 7% and
life companies at 6%.
Zacks Names Commercial REIT 'Bear of the Day'
September 21, 2009
Zacks Equity Research's Bear of the Day for Sept. 18 was Developers Diversified
Realty Corp., Beachwood, Ohio. DDR is a real estate investment trust which
invests in retail properties. The statement from Zacks said the company "has a
relatively high leverage compared to its peers due to acquisitions over the past
several years. Developers Diversified is raising cash through asset sales, debt,
and by selling 30 million shares and additional warrants to the Otto family, a
shopping center developer in Germany. The equity sale is dilutive and the long-
term sustainability of the company is under doubt. Our recommendation for the
company is underperform as we anticipate it to perform well below the broader
market. However, if Developers Diversified can tide over the current storm, the
share price can rise."
REIT Has Stocks Added to Russell Global Index
September 21, 2009
Invesco Mortgage Capital Inc., an Atlanta-based real estate investment trust, is
having its common stock added to three Russell Investments equity indexes.
Effective after the markets close on Sept. 30, Invesco shares will become part of
the Russell 2000 Index; the Russell 3000 Index; and the Russell Global Index.
Invesco had its initial public offering on June 26, 2009 and focuses on financing
and managing residential and commercial mortgage-backed securities and
mortgage loans.
FDIC Offering $2.6B in ADC Loans Through KBW
September 21, 2009
The Federal Deposit Insurance Corp. is auctioning off a $2.6 billion pool of
performing and nonperforming acquisition, development and construction loans
through Keefe, Bruyette & Woods. Offered as a structured transaction, the bid
deadline is Nov. 12. The package has been stratified into three different
geographic pools: western ($652 million), central ($545 million), and eastern
($1.4 billion). Bidder due diligence starts this week, but final bids are due in mid-
November. KBW notes that investors can purchase "sole membership interest in
a newly-formed limited liability company" to which the loans are pledged.
CRE Woes Make Zions Zacks' Bear of the Day
September 17, 2009
Zacks Equity Research, Chicago, has made Zions Bancorp., Salt Lake City, the
Bear of the Day for Sept. 16. Among Zacks' concerns is Zions' commercial real
estate exposure. "CRE represents over one-third of Zions overall loan portfolio.
Continued weakness in the residential development and construction activity in
the southwest has resulted in further deterioration of credit metrics in the past
several quarters. Given the sluggish economic conditions, we expect credit to
further deteriorate across the industry in the coming quarters."
Slight Gain in New Home
Sales in California
October 13, 2009
New home sales in California in
August rebounded somewhat
from July's low levels, but they
were still 13% below the same
month last year, according to the
California Building Industry
Association.
NABE Sees a Major
Spike in Housing Starts
Next Year
October 12, 2009
Housing starts will jump 38% next
year and finally contribute to
economic growth as the housing
sector breaks out of a three-year
spiral, according to a new
National Association of Business
Economists survey.
HMDA Analysis:
Countrywide/BoA
Fannie's Top Customer
in 2008
October 9, 2009
In 2008 the top customer of
Fannie Mae was, by far, the
combined mortgage operation of
Bank of America and
Countrywide Financial Corp.,
accounting for almost 18% of all
loans sold to the mortgage giant,
according to an analysis done by
National Mortgage News.
Wells, Bank of America
Top Residential Funders
in First-Half
October 9, 2009
Wells Fargo & Co., and Bank of
America dominated the
residential production market in
the first-half, originating $231
billion in loans, and achieving a
combined market share of almost
45%, according to figures
compiled by National Mortgage
News and the Quarterly Data
Report.
Survey Finds Buyers Still
Paying Less Than
Listing Price
October 8, 2009
While it appears the balance
between a buyers market and a
sellers market is creeping back
towards equilibrium, there is a
likelihood of a trend back towards
the buyers as the summer home
purchase season ends, the chief
economist of Zillow.com said.
Sales in California
October 13, 2009
New home sales in California in
August rebounded somewhat
from July's low levels, but they
were still 13% below the same
month last year, according to the
California Building Industry
Association.
NABE Sees a Major
Spike in Housing Starts
Next Year
October 12, 2009
Housing starts will jump 38% next
year and finally contribute to
economic growth as the housing
sector breaks out of a three-year
spiral, according to a new
National Association of Business
Economists survey.
HMDA Analysis:
Countrywide/BoA
Fannie's Top Customer
in 2008
October 9, 2009
In 2008 the top customer of
Fannie Mae was, by far, the
combined mortgage operation of
Bank of America and
Countrywide Financial Corp.,
accounting for almost 18% of all
loans sold to the mortgage giant,
according to an analysis done by
National Mortgage News.
Wells, Bank of America
Top Residential Funders
in First-Half
October 9, 2009
Wells Fargo & Co., and Bank of
America dominated the
residential production market in
the first-half, originating $231
billion in loans, and achieving a
combined market share of almost
45%, according to figures
compiled by National Mortgage
News and the Quarterly Data
Report.
Survey Finds Buyers Still
Paying Less Than
Listing Price
October 8, 2009
While it appears the balance
between a buyers market and a
sellers market is creeping back
towards equilibrium, there is a
likelihood of a trend back towards
the buyers as the summer home
purchase season ends, the chief
economist of Zillow.com said.