Thursday, July 30, 2009

RevPAR continues down...

Hotel RevPAR down over 16 points...

Among the Top 25 Markets, New Orleans, Louisiana, reported the largest occupancy increase, up 4.7 percent to 70.4 percent. Nashville, Tennessee (+0.9 percent to 64.4 percent) and Oahu Island, Hawaii (+0.9 percent to 84.9 percent) were the only other markets to experience an occupancy increase. Detroit, Michigan, reported the largest occupancy decline, falling 18.5 percent to 55.0 percent, followed by St. Louis, Missouri-Illinois (-16.4 percent to 63.7 percent).

Atlanta, Georgia, came in virtually flat for the week with a 0.5-percent decrease in ADR to US$89.36, reporting the smallest decrease among the top markets. New York, New York, experienced the largest ADR decrease, falling 28.3 percent to US$187.59. Two other markets posted ADR declines of more than 15 percent: Oahu Island (-16.5 percent to US$153.10) and San Francisco/San Mateo, California (-16.2 percent to US$131.43).

Two of the Top 25 Markets reported RevPAR decreases of less than 5 percent: Atlanta (-4.1 percent to US$54.90) and New Orleans (-2.5 percent to US$69.90). New York experienced the largest RevPAR decline, dropping 33.1 percent to US$157.45, followed by St. Louis (-26.4 percent to US$51.12) and Detroit (-26.4 percent to US$43.02).

Are we there yet?

Fitch looking for 12% specially serviced by year-end -> Surprised its not there already.

With close to $50 billion in U.S. CMBS now in special servicing, that number may approach $100 billion by the year end, representing approximately 12% ($96 billion) of total outstanding CMBS, according to Fitch Ratings in a new report.

Wednesday, July 29, 2009

$1.3 Trillion CRE Mortgages underwater

Bloomberg reports that roughly 1/3rd of the CRE mortgage market is underwater, but points out that many are still cash flowing just fine.

“The sad fact is that many of these assets are healthy performing assets,” said Dan Fasulo, managing director of Real Capital. “Conditions have changed so much in the lending arena that many owners are going to have significant troubles refinancing.”

Jingle Mail, Jingle Mail, Hines Turns in More Keys...

Hines and Sterling are turning in their keys to 333 Bush in San Fran - another blow to that market.

"333 Bush is the third Northern California office property Hines has had to give back in recent weeks. Last week , Hines confirmed that a joint venture with CalPERS was doing the same thing with three of four buildings (814,000 square feet) within the Watergate Office Complex in Emeryville, CA. It also confirmed the loss of Marin Commons, a 455,000-square-foot office complex in San Rafael."

It's not in a CMBS.

You may recall some prior news on this building from late last year when a significant tenant (45% of GLA), Heller Ehrman, went bankrupt and ended up paying no more than $18 million on the $48 million due to the owner's of the building.

Sunday, July 26, 2009

Canary Fighting Ring Busted!

It's true - Connecticut police have busted up a notoriously brutal canary fighting ring. No word on what the canaries were trying to tell us, but this MUST have some commercial real estate impact - still investigating.... Probably some former hedgies getting their jollies watching canary fights at night and buying up distressed debt during the day - damn them! call the SEC!

Jersey Mayors, Rabbi's, Stung in Graft Probe -- CMBS Link

We all saw the news stories last week about the New Jersey Mayors and Rabbis being perp walked over their involvement in a huge fraud indictment, but our favorite media circus outlets failed to make the connection to CMBS. The shyster behind all of this was none other than Solomon Dwek, the Rabbi who built a real estate empire with funds directed through religious connections only to blow his wad on horrible investments that would have failed either way, ultimately swindling whatever proceeds he could get his hands on.

If you've just joined us in the CMBS world, you probably haven't heard of him. His cookie crumbled back in 2006 and assets were already being auctioned off by the time the next scandal, Michael B. Smuck (MBS Properties).

All of these have already completed the workout period with a weighted average loss severity of 63%:

Deal Name Loan Name Orig. Balance Loss Loss Severity
CSFB 2001-CK3 French Quarters Apartments $ 12,100,000 $ 9,555,744 79.0%
DLJCM 1999-CG1 Becker Village Mall $ 11,344,000 $10,984,663 96.8%
DLJCM 1999-CG1 Marycrest Shopping Center (3) $ 7,000,000 $ 3,027,912 43.3%
DLJCM 1999-CG1 Tiffany Square $ 11,250,000 $ 277,172 2.5%
DLJCM 1999-CG2 211 South Gulph Road $ 10,850,000 $ 5,732,768 52.8%
DLJCM 1999-CG2 Fashion Outlet Center $ 8,650,000 $ 7,995,489 92.4%
DLJCM 1999-CG2 Highland Falls Apartments $ 21,300,000 $16,824,596 79.0%
HFCMC 2000-P1 Mission Centre $ 5,125,000 $ 820,526 16.0%

Also, pretty certain there is no relation to Joseph Dwek, the legitimate NY-based real estate investor. The thought crossed my mind, but all of his loans are current, which is not how the shyster Dwek does business.

Thursday, July 23, 2009

Legacy CMBS TALF rejects 1 bond

Sucks for that guy, but PCV/ST deals were brought in even though they carry 20% of the collateral on the deals they're in.

No color on why JPMCC 2007-LDPX A2S was rejected, but you have to wonder about the shorter term loans and extension risk behind that class. It's hard to get behind a 3-year loan on this bond, when it's like to extend out further. Not to mention your GGP and Maguire exposure.

Wednesday, July 22, 2009

Live Fast, Die Young

S&P managed to downgrade a bond from AAA to BBB- and back to AAA with in ONE WEEK!

Let's not even discuss the fact that the bond has a break-even default rate above 100% - i.e. default all the loans underlying it, and you still get 100% of principal back.

Thursday, July 9, 2009

Less Slow

Things got less slow the while I was out of town, but bid lists remain extremely sluggish.

PPIP details released as-advertised. Will include AJs and AMs.

REIS reported MF vacancies at a 22-year high.

Deutsche sold it's last Macklowe legacy asset for $330 (something) a square foot last week.

Deal Junkie highlighted an interesting article on co-tenancy - nothing new here, but just interesting.

Deal Junkie also highlighted an article where Cadwalader is asking lawyers to take a year off ... My favorite yard-hat is the one with Cadwalader on the front, because whichever neighbor walks up to me just keeps staring up at the name trying to figure it out.

Congress just got an earful about the horrible state of CRE from all sorts of folks, including Street analysts. All is lost.

June Retail sales were negative. Retail vacancies hit 10%! BUT Office vacancies win with a 15.9% vacancy rate.

In Miami Florida at the "Big House", Maison Grande filed for bankruptcy. They are a Condo Association (COA).

Duh, RevPAR is down.

Fear not, I'm not switching to a linkfest form, just been away - we'll try to say something more meaningful in the coming days. Spreads rallied today behind all this gleeful news (see, there!).

Wednesday, July 1, 2009


14:15 + Hotel Loan Defaults Double as Recession Cuts Travel (Update2)
14:11 CRE News [Reg]: (Free) CMBS Market Tapped to Refi Maturing Cell Tower
14:10 Midtown NYC Office Vacancies Hit 15% for Best Space (Update1)
13:16 + Street Insider: Fitch Affirms LNR Partners' Special
13:14 + Street Insider: Fitch Affirms Prudential Asset Resources'
12:42 Commercial-Mortgage Delinquencies Rise to 4.07 Percent in June
12:28 Fitch Affirms LNR Partners' Special Servicer at 'CSS1-'

Nothing to see here, keep moving along...