Herald Tribune Business Weekly Press Release

Herald Tribune Business Weekly Press Release

NAI Manasota - Sean Dreznin

NAI Manasota, based in Lakewood Ranch, has added hired two commercial real estate specialists, Sean Dreznin and Richard Sellers….

Dreznin is a commercial property management professional who owned and operated a professional services management company for several years. He will work with NAI’s Commercial Investment Sales & Special Asset Services group.

Click here for full article <——

AIG agrees to sell 2 NYC buildings

The embattled insurer American International Group Inc. is selling its headquarters building in New York and a nearby building in a deal expected to close at the end of this summer, a person familiar with the matter said Wednesday.

But the person said that AIG is not disclosing the price or who the buyer is. The person asked for anonymity because the sale has not been made public yet.

The building sales are the latest move by AIG, which has received $182.5 billion in financial support from the government since September, to shed assets to repay the loan package.

The buildings are at 70 Pine Street and the adjacent 72 Wall Street in lower Manhattan.

Why do I have the feeling that the reason AIG is keeping this quiet and confidential is they are making a substantial profit on the sale and somehow are going to circumvent delivering those profits to the shareholders (The taxpayers!!!) and instead keep them for themselves.

You wait and see, I believe that will be the case.

NAR issues “cautionary” advice in its Commercial Real Estate numbers

The National Association of Realtors issued predictions for four major sectors of commercial real estate this week. According the report, national office vacancies are expected to increase from 16.1% in 2009 to over 20% in 2010 with rents falling about 7% this year and 0.8% next year.

Retail vacancies, which were just under 10% in 2008, are projected to rise to 12.1% in 2009 and 15.8% in 2010. Rents are expected to fall 2.1% in 2009 and 1.5% in 2010. Industrial vacancies are expected to increase to 11.9% in 2009 and 12.6% in 2010 with rents falling 3.4% this year and 4% in 2010. Multi Family is expected to fare the best; vacancy is expect to increased to 6.8% this year and 6.7% in 2010 from 5.7% in 2008 with rents slightly growing this year and next.

If these predictions are accurate or close to accurate, there will be more pain in commercial real estate, and we are nowhere near a bottom — especially in office and retail. Loan delinquencies have been increasing in both segments in early 2009 and they could spike over the next two years.

Going forward, overweight multi-family, which continues to benefit from lower home ownership rates and less new supply. Invest in retail and office selectively; only companies that have a handle on their debt maturities over the next couple of years which will help them withstand a prolonged downturn.

Article found on Seeking Alpha (Click here for site) and written by By Greg Sukenik

Commercial Real Estate and the Hovering Crisis

The Looming Crisis in Commercial Real Estate
By MICHAEL WEISSKOPF

The bailout may be coming to your local mall.

Picture by Brian Ulrich ~ Check out his website by clicking here

The credit crunch has thus far focused on the residential mortgage mess.
But with $1.3 trillion in loans to shopping centers and other commercial properties coming due between now and 2013, another time bomb is ticking. In a report scheduled for release on Wednesday, Deutsche Bank estimates that at least half the loans — and two-thirds of those packaged and resold as securities — will not qualify for refinancing. As a result, many borrowers will likely default, leading to losses on securitized mortgages of $50 billion or more and losses of at least $200 billion on commercial real estate loans overall, according to Deutsche analyst Richard Parkus, who authored the report. “People are only now beginning to realize there is a looming crisis,” Parkus told TIME. (See pictures of retailers which have gone out of business.)

Financial analysts believe government incentives to banks to extend existing commercial real estate loans will be necessary to limit the damage. The Federal Reserve and Treasury Department are considering a number of options. The alternative is last week’s bankruptcy of General Growth Properties, the nation’s second largest shopping-center group, which could not refinance, even though many of its properties have positive cash flow.

Most mortgages for commercial real estate — office and apartment buildings, hotels, industrial warehouses and shopping malls — are structured as 5-to-10-year loans. After that, the loan is normally refinanced. But the recession has eroded the fundamentals of even good refinancing candidates.
Property values have plummeted, with sale prices down as much as 45% from the peak in 2007, Deutsche Bank reports. And vacancies are up — expected by year’s end to reach 13.5% for retail and 17% for office buildings — cutting potential income that commercial properties need to make their mortgage payments. Some areas will be even worse. Vacancy rates in midtown Manhattan, already at 12.7%, are expected to reach 19% by year’s end, real estate experts say.

“I doubt too many banks will want to own a lot of commercial properties that are empty,” said George Raitu, an economist for the National Association of Realtors.

At the same time, underwriting standards have significantly tightened since the boom years of 2005 and 2006, when banks granted loans of up to 95% of a property’s appraised value. Today loan-to-value ratios have dropped as low as 60%, so a “very large percentage of outstanding loans simply will not qualify to refinance,” said Parkus. (25 people to blame for the Financial Crisis)

Click here for Full Article at Time.com <—–

The Making of a Landlord

I saw the story’s title and was instantly drawn to it. A wonderful, realistic read. I hope you enjoy as much as I do.

“The Landlord of the Shadows”

written By Christopher Palmeri s a senior correspondent in BusinessWeek’s Los Angeles bureau.

I was chased by a wild dog.

I saw a home so stripped someone had even taken the front door. I attended a foreclosed-home auction that featured cheerleaders yelling in my ear. Finally, in March, I closed on a home I’m now renting out as an investment property.

I paid $125,000; it had sold for $345,000 four years ago.
In my one-year search, I came to expect surprises and to realize that even a good credit score doesn’t get you far.

One thing I learned: Avoid foreclosure auctions. The homes need lots of work, and most buyers don’t have time to do proper inspections. Ditto for “short sales,” where an owner tries to sell a home for less than what he owes the bank. There are too many decision-makers involved. I made an offer on a short sale. Nine months later it’s still on the market.

I began my search in my Los Angeles neighborhood, but even with a big down payment, prices hadn’t fallen enough to produce positive cash flow for a rental property. So I searched Realtor.com for homes in suburbs a train ride away that seemed likely to have job growth. I found a two-bedroom, one-bath Spanish-style bungalow listed for $129,000 in Ontario, Calif. I offered $123,000; we settled on $125,000.

I figured getting a loan would be easy. I have good credit, no debt, cash in the bank, and a job. I was pre-approved for hundreds of thousands of dollars. Bank of the West wanted to charge me five points — a $5,000 fee to borrow $100,000. Says a bank spokesman: “Higher points for an investment property reflect the higher risk on that mortgage.” A rep at a major national bank said it wasn’t “competitive at loans under $100,000.” LendingTree.com promised to find me five offers in 48 hours. Two days later it said it couldn’t help.

Ultimately, an independent broker, Los Angeles’ Legend Mortgage, found me a loan with an institution I had never heard of, Burlingame (Calif.)-based Provident Funding Associates. I had to put down more than planned: 25%. And I’m paying 6.2% and one point in fees, more than the 5%, without points, I would have paid if the house were to be owner-occupied.

Provident put me through the wringer. Bank statements, tax returns, notarized interspousal escrow instructions. At one point, I was scraping and painting a house I didn’t own because the lender wanted damage repaired. I was out about $1,000 for inspections and other work before I was even sure I was going to get the loan.

The bank that owned the property wasn’t much fun, either. With such properties, banks offer a tight window for you to cancel your purchase based on inspections — seven days, in my case. And the bank wanted me to pay $100 a day if I didn’t close on the agreed day. This led to stress — and requests for waivers — on my end. On the bright side, bank-owned properties commonly sell “as is,” but with mine the bank paid more than $5,000 for a new sewer line, termite abatement, and other repairs.

Then it was time to rent it. I checked similar properties on Craigslist, then underpriced the rent at $1,100 a month to get a tenant fast. I had 16 interested parties in a few days. Some of the stories were heartbreaking — families living in cramped apartments and on food stamps just wanting a house for their kids. I showed it to two people and took an application from one, verifying employment and paying $30 to MySmartMove.com to check his credit.

In the end, my total cash investment was $47,000. Payments — taxes, insurance, everything — will be $750 a month (plus any repairs). If my tenant pays me for a year, I’ll get a 9% return, not including tax advantages or price appreciation.

If being a landlord is a hassle, the hope of a 9% return will ease the pain.

We wish you the best of luck Mr. Palmieri, the best of luck!

Boston’s John Hancock Tower, New England’s tallest building, was sold Tuesday in a foreclosure auction held by an investor group for $660.6 million, half the price paid by real-estate private-equity firm Broadway Partners three years ago

Boston’s John Hancock Tower, New England’s tallest building, was sold Tuesday in a foreclosure auction held by an investor group for $660.6 million, half the price paid by real-estate private-equity firm Broadway Partners three years ago.

Original post & story By — Email LINGLING WEI

The winning bidder was a partnership between Normandy Real Estate Partners and Five Mile Capital Partners, which holds the senior portion of $700 million in so-called mezzanine debt, or the part that fills the gap between the first mortgage and a borrower’s equity. The partnership agreed to pay $20.1 million for the mezzanine debt and assume the first mortgage of $640.5 million. The Normandy-Five Mile team has bought pieces of the mezzanine debt at discounted prices since June 2008. The debt was originally made by Greenwich Capital, which is part of Royal Bank of Scotland Group PLC, and Lehman Brothers Holdings Inc.

The auction, which some participants described as a “non-event” and lasted only a few minutes, reflects a steep decline in commercial-property values as the economic distress sweeps through office buildings, shopping malls, hotels and the like. The investor group moved to conduct the foreclosure auction after Broadway defaulted on the mezzanine loan, which came due in early January.

Unless other creditors or Broadway Partners go to court to try to block the foreclosure, the Normandy-Five Mile partnership will take over the building immediately. People familiar with the matter said a court fight is “highly unlikely.”

The Normandy-Five Mile partnership also won the bidding for one other office tower controlled by Broadway Partners in Southern California, called 10 Universal City Plaza near Los Angeles. Their winning offer was about $304.9 million.

For full article and other commercial news, visit WSJ, here <—-

General Growth (2nd largest U.S. Mall owner) files for bankruptcy protection

General Growth Properties Inc, the second largest U.S. mall owner, filed for bankruptcy protection on Thursday in one of the biggest real estate failures in U.S. history.

Ending months of speculation, the Chicago-based mall owner, which listed total assets of $29.56 billion and total debts of $27.29 billion, sought Chapter 11 bankruptcy protection from creditors along with 158 of its more than 200 U.S. malls, while it seeks to restructure some of its debt.

Since November, General Growth has warned that it may have to seek protection from its creditors when it was unable to refinance maturing mortgages.

The company said in a statement that it planned to continue exploring strategic alternatives during the bankruptcy protection, from which it is seeking to emerge as quickly as possible through a reorganization that preserves its national business.

General Growth’s filing in the U.S. bankruptcy court in Manhattan makes it one of the largest nonfinancial companies to succumb to the financial crisis in the U.S.

Before the bankruptcy protection filing, the company had defaulted on several mortgages as well as a series of bonds. It has also put several of its flagship properties up for sale.

Analysts and other real estate experts have speculated that mall owners Simon Property Group Inc and Westfield Group would be interested in buying some of General Growth’s assets from bankruptcy.

General Growth has been generating enough cash flow for the company to pay monthly interest costs and expenses, but it has been unable to refinance the principal of loans and mortgages as they come due because banks and other financing sources have been reluctant to issue large mortgages and loans.

“Our core business remains sound and is performing well with stable cash flows,” General Growth Chief Executive Adam Metz said in a statement.

“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11.”
General Growth has received a commitment for a debtor-in-possession financing facility of about $375 million from Pershing Square Capital Management LP, as agent.

The hedge fund run by William Ackman also owns about 25 percent of General Growth shares.

Ackman, who has been urging General Growth to file for bankruptcy protection, described it as “a great company” with “phenomenal assets” at a conference on April 2.

At the end of 2008, about $15.17 billion of General Growth’s debt was comprised of mortgage loans that had been securitized into commercial mortgage-backed securities, according to research firm Trepp.

“This underscores that real estate companies are most vulnerable to refinancing risk rather than market risk,” said Nomura’s London-based property analyst Mike Prew. “The U.S. insolvency process is, we think, a cure for General Growth’s liquidity problems, which stem from external factors, and not a traditional bankruptcy per se.”

Shares of General Growth have deteriorated as the credit crisis worsened. They closed at $1.05 in the United States on Wednesday, making the company’s market capitalization $283.90 million, down from $11.l8 billion when it traded at a 12-month high of $44 in May.

So far, fallout from the General Growth bankruptcy has not hit European mall owners. Europe’s biggest mall owner, Unibail Rodamco, was trading up 2 percent at 118.69 euros, while Anglo-French retail specialist Hammerson edged up 0.2 percent to trade at 307.75 pence.

For the full article (Reporting by Ilaina Jonas, Emily Chasan and Sinead Cruise in London; editing by Elaine Hardcastle and Lisa Von Ahn) and a history of the company, click here <—-

It’s Now a Renter’s Market* *(in some areas)

Across the U.S., desperate landlords are coming up with novel ways to attract new tenants and retain old ones

Amy Gips loves her one-bedroom apartment in a swank Manhattan building that features a gym, golf simulator, yoga studio, and massage rooms. But she no longer feels she can justify paying $4,400 a month in rent, especially now that her ex-boyfriend has moved out.

A week ago, just as the 27-year-old associate at a private equity fund was planning her next move, a letter arrived from the property management company. The rent for the 750-square-foot Chelsea apartment with floor-to-ceiling windows overlooking Madison Square Park was reduced $900, or about 20%. It changed her calculus, though she hasn’t given up on the idea of shopping around for something under $3,000 a month, with one or two months of free rent thrown in.

For years, rising rents in Manhattan were thought to be as inevitable as baseball at Yankee Stadium. But times change, and in New York, landlords are scrambling to hold on to renters who have been hit by the economic downturn.

That means renters who, like Gips, are still in good financial shape now have the whiphand. “I was thinking that the rent was so high that there was no way I’d consider staying,” says Gips. “Now that they’ve offered the reduction on their own, I kind of feel I should do a bit of negotiation.”

Avoiding Empty Apartments

During the six months since the financial crisis began in earnest, control of the Manhattan rental market has switched to the tenants, who no longer have to pay broker fees (traditionally about 15%) and who can get up to three free months of rent and even gym memberships thrown in just for signing on the dotted line. The power shift might not be as dramatic in other parts of the country, but rents are getting more affordable from Charlotte to San Francisco. And landlords everywhere are getting more creative (and desperate) to hold down vacancies and prevent turnover.

• Landlords figure it’s better to take a hit by offering a month or two of free rent and other freebies than to carry empty apartments that aren’t generating income.

It’s a nationwide phenomenon, according to Victor Calanog, research director at real estate data firm Reis. Half of apartment buildings reduced rents in the fourth quarter of last year and the first quarter of this year — the highest percentage since Reis began tracking apartment data in 1980. (By comparison, only 17% of buildings reduced rents in 2007.) And average asking rents fell 0.6%, to $1,046, in the U.S. in the first quarter, compared with the previous quarter, the largest drop since Reis began collecting quarterly data in 1999. And average effective rents, which include free months and other landlord incentives, fell 1.1%, to $984.

Effective rents fell in 64 of 79 markets that Reis tracks. Effective rents in San Francisco dropped 2.8% in the first quarter of this year, compared with the previous quarter — the nation’s largest quarterly decline. Rents fell 2.6% in New York City (all five boroughs), 1.3% in Charlotte, 2.5% in San Jose, 0.9% in San Antonio, 0.9% in Cleveland, 1.2% in Chicago, and 2.3% on Long Island. Only a few markets, such as Houston and Dallas, showed increases, Calanog says.

For Full Article written by Prashant Gopal via Yahoo Finance & Business Week, click HERE <—–

270+ Tools 4 running a Business Online

This article is packed with so much content and so many suggestions and links, that I am simply going to utilize an introductory paragraph and a link to full article, because in hindsight, you may set aside a block of time.

“Last August we featured a post with more than 230 online apps for running your business. Since there are hundreds of new apps coming on the market every year, we figured it was time for an update. This year we came up with more than 270 additional apps. Some are completely new since last year, others might have been overlooked, and still others made significant improvements that gained them a spot on the list.”

Click here for Full Story

The above article was on Mashable and written by Cameron Chapman

Want to list your apartment building 4 lease?

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Handling Fairlawn, Highland Square and neighboring areas, this listing service utilizes SEO, and internet listing sites to attract and corral prospective renters to the above site. Once they are there, they can peruse the listings and contact the administrator by email to request more data. Upon gathering some brief data, the prospect is then forwarded to the appropriate contact for properties which meet their specified search parameters.

It is a bit more detailed then a basic apartments.com type site, but this customization allows for a more qualified prospect.