This is a public Blog  publicRSS

Entry

    seand
    CRE Deal Activity on the Rise? Really? Where?
    Entry posted November 29, 2009 by seandSuper Contributor, last edited January 19, 2012 
    1531 Views, 3 Comments
    Title:
    CRE Deal Activity on the Rise? Really? Where?
    Entry:

    After reading Market Maven's blog on Nov 12, I was encouraged, yet skeptical, we are seeing a true "trend" in CRE activity. I'm almost a convert as we have seen the following activity increase in the following specific areas:

    -Pre-bid due diligence for purchase of CRE at bank auction

    -Stimulus impacts and legislation (pending) in Low Income Housing (LIHTC) and New Market Tax Credits

    -Strong GSE volume in Fannie, Freddie and HUD/FHA

    -Asset management capital improvements prior to a planned disposition

    -Lenders looking at their entire portfolio and "rebalancing" reserves to reflect current deferred maintenance conditions

    In aggregate, volume and revenue is still lower than 2007/2008, however there are signs that we're close to the bottom in some asset classes and that the "extend and pretend"/"delay and pray" tactics of large lending institutions is running out of steam and banks are looking to cleanse the their balance sheets in a legitimate manner.

    If these trends hold and we don't experience the "typical" slowdown in transactions in January and February, I think we can all agree there is something to be Thankful for this Thanksgiving.

     

     

     

    Image:
    Keywords:
    Commercial Real Estate, Uptick, Trend, Volume, Activity, LIHTC, Lender, GSE, Asset Management, Auction

    Comment

     

    • dcrocker

      Sean, good intell above. The general sense seems to be very cautious optimism right now...or at least a sense that things won't get much worse than they've been. Let me add this nugget to the pile, courtesy of Elizabeth Krol (via LoopNet):

      Investment sales in Sacramento increased almost threefold in 3Q09 ($256M in commercial real estate changing hands, up from a dismal previous total of just $69 million). The total's still relatively low historically speaking, but what's going to change across the board next year (not just in Sacramento) is that the # of sellers who will really need to move properties and bend on price is going to be much higher.

      Dianne

       

    • EdG

      (Nov. 30 2009) New York Appeals Court Clears Way for $4 Billion Atlantic Yards project - biggest eminent domain case since the U.S. Supreme Court case Kelo v. City of New London, 545 U.S. 469 (2005).  Pfizer the beneficiary of the eminent domain case - announced this year (2009) that it was leaving New London.

      One of the biggest arguments from the developer, Forest City Ratner Cos., was that the area was "blighted" a term often heard for Brownfield developments.  Among the "blighted" properties includes $600,000 condos!

      Barclays is investing in the $900 million proposed arena to be built - one of the costliest in the nation.

      For more on this see ETRG group forum discussion.

      ED

    • EdG

      Back to CMBS: WSJ December 2, 2009: "Another CMBS Bright Spot" is an excellent article articulating CMBS loan origination over the last 9 years - peaking of course in 2007 with $222 Billion.

      Inland Western Retail Real Estate Trust, Inc. is the borrower (REIT) that was the recipient of the JP Morgan Chase $625 million new financings.

      The issuance's LTV is higher than the Developers Diversified and not backed by TALF but still conservatively underwritten and a tentatively (emphasis) good sign that the credit market may be loosening as institutional investors search for safe, yet higher yield than treasuries.