Friday, March 30, 2012

CSMC 2012-CIM1

Bloomberg had a TOP story on CMBS RMBS today (that's always so exciting!) talking about how Fitch thinks S&P is grossly inaccurate in giving Credit Suisse AAA ratings on bonds with just 8 percent subordination, noting that Fitch would never dream of assigning a AAA rating to any bond with less than a 9.75% subordination rate.

I don't know if those are standards worth arguing over or not, but at least they disagree on something.

Update: I incorrectly noted this was a CMBS deal on Friday, but Anonymous corrected me and it looks like it's a resi deal.

ESL to sell off Land's End?

RetailTrafficMag noted an article in the NY Post stated they were expecting to shop it through Goldman Sachs and targeting a $2billion valuation.

The best part of the article is the picture (below) of Lampert doing his Daffy Duck impression.

Best Bye

Best Buy is planning on saying Good Bye to 50 of it's standard format stores and opening 100 smaller format stores in 2013. They did not release a list of the stores in their conference call materials, and indicated the list would come out much later.

Wednesday, March 28, 2012

CMBS is Back!!!

I just got the notice from! with that in the subject line.

Tuesday, March 27, 2012

The Dream Hotel loan for sale?

Although not specifically mentioned in the summary prospective bidder materials directly, a $100mm note on a "boutique hotel" in Manhattan is being offered for sale by Mission Capital today. I'm going to go ahead and bet $100mm it is The Dream Hotel at 200 W 55th Street - please let me know if you'd like to take the other side of that bet asap.

Even before debt service it's losing $1mm a year at 91% occupancy according to the 1Q 2011 financials, and appraised at $87mm in April 2011. The loan represents 2.57% of CSMC 2006-C4, and the #3 loan represents 5.10% and is also delinquent (Babcock&Brown FX3), so it's kind of a big deal. In total, 12.61% of the deal is in dire straits, shortfalls are up to the E class, and the D class is already rated "D", with a split rating as high as the AMs...

Monday, March 26, 2012

Mazzei goes to Ladder

In case you don't know where you stand in the food chain, Mazzei got his own article when he left BAML that also includes a brief mention of McNiff, a few other people are named in a random blog and a Bloomberg article a week ago, and the rest of you didn't even get honorable mention (you're in good company though.).

Might I recommend you touch base with Bristol Consulting in your job search. This is not a paid advertisement, they're just good at what they do.

Friday, March 23, 2012

New Issue Calendar

Bloomberg reporting that JP is hawking the WTC7 2012-7WTC deal. I'm seeing the taxable piece ($125mm) is already priced at +310 for the 3.7yr Baa3, and +450 for the 6.7yr Ba1.

Other deals in the market include the OSI deal from BMLDB 2012-OSI ($324mm), and the UBSCM 2012-C1 deal.

Other deals that are in the pipeline for next quarter include a $1bln JP conduit deal, $750mm Cantor conduit, $1bln GSMS 2012-GC7 conduit, and then two single borrower deals, Fountainebleau Hotel $450mm and Carousel Mall at $450mm.

Thursday, March 22, 2012

JPMorgan and BankOfAmerillwide cull traders

Bloomberg reported yesterday that the CMBS and RMBS desks took heavy hits at both JP and BOA.

In other news, large bands of former traders were seen roaming around Bryant Park quoting lines from Braveheart such as, "they may take our lives, but they can never take our FREEDOM!" in Scottish accents that rivaled Gibson's weak attempts in the movie. The situation teetered on violence when one trader tossed down his biodegradable coffee cup that was only half empty.

Skyline officially goes to Special

As Vornado reported in February they let the Skyline portfolio transfer to special servicing yesterday. They blame the drop in occupancy (74%) on BRAC, which has caused havoc in some submarkets (i.e. for Falls Church VA it has been negative, but in markets such as Huntsville, AL it's been positive). They also noted that another 157k sf could be lost in 2012 and a total of 408k sf could be lost by 2016, all related to BRAC.

h/t crabsofsteel

Friday, March 16, 2012

Liquidated CMBS Loan Volume, Average Losses Plunge

CoStar reports:

volume of CMBS conduit loans liquidated in February retreated sharply, falling 43%...
...February liquidations were about $228 million--representing an average loss severity of 25.55% ...

Wednesday, March 14, 2012


Several articles out about the spike in CMBS maturities, here, and here, and the percentage of loans actually paying off at maturity spiked as well...

Wednesday, March 7, 2012

Big Box Sporting Goods in NYC

Customers around NYC cheered as they will soon have access to big box stores carrying hiking packs and tents, in addition to the more useful kayaks, bows, and arrows. One customer, pictured above in Central Park, has started training his mongrel dog to chase rabbits and squirrels in anticipation of what he hopes will be a movement back to the old days where he can live off the [Central Park]-land.

TrafficCourt reports.
Following the lead of rival REI, sports equipment seller Dick’s Sporting Goods would like to open a store in the Big Apple. The Real Deal reports the retailer is seriously considering locations at 1333 Broadway, in the Herald Square area, and at 3 Columbus Circle, the building that made news in 2011 with one of the biggest office leases of the year.

"Herald Square" area could include a few locations such as: Herald Center (BACM 2006-3), the Macy's building, the Victoria's Secret space... I haven't been over there recently to see where vacancies are.

And Misonzhnik has updated her profile picture up there from "the girl who holds the world in a paper cup" theme (which is what I secretly fell in love with) to a new "pale with bold lipstick and I'm going to treat you like the naughty boy you are" theme (which is growing on me). It also has a slight asian flavor to it now. Maybe I'm reading too much into it here, but I'm pretty sure she is sending me a message...

Tuesday, March 6, 2012

S&P frozen out of CMBS

Bloomberg TOP story:

Standard & Poor’s is frozen out of the commercial-mortgage bond market by the biggest underwriters after derailing a $1.5 billion sale by Goldman Sachs Group Inc. and Citigroup Inc. last July.
Since then, those banks along with JPMorgan Chase & Co., Deutsche Bank AG and Morgan Stanley have bypassed S&P’s credit ratings as they issued $11.3 billion of debt linked to skyscrapers, shopping malls and hotels, according to data compiled by Bloomberg.

My favorite snippet:
Ed Sweeney , a spokesman for S&P, said the New York-based company’s CMBS analysts weren’t available to discuss the situation. “We believe our ultimate success will be based on the value investors derive from the ratings and research,” he said in an e-mail.

Be on the lookout for Harold McGraw III (known to his friends as Harry 3-I) trying to unload his S&P position ...

Monday, March 5, 2012

575 Lex negotiations falter...

Nomura and Crain's reported this morning that talks broke down between the owners (CalSTRS and Silverstein) and Rockrose Development and the owners have taken the property off the market.

Our previous posts on the property are here.

I haven't seen the front pays trade in a couple of weeks, but this definitely pushes the BACM 2007-2 A2 out much longer(years, not months) than if the loan had paid off. BACM 2007-1 A2 is a little different with 2 large maturity defaults that could resolve and several large loans due in the 1Q 2013, then the A3 doesn't start getting additional paydowns until late 3015 and mid 2016.

Friday, March 2, 2012

Fitch explores the 'contradictions' of U.S. multifamily CMBS

I haven't read the Fitch report, Reuters reported that there is one out there asking the tough questions about why multifamily has the biggest loan performance problems despite improved property performance and gives NY as an example:

A notable example is New York City. Despite being the second-best performing city in the Case-Shiller index, the city has four big problems in multifamily CMBS; Stuyvesant Town/Peter Cooper, The Belnord, The Savoy and Riverton, the underperforming loans of which total $3.6 billion.

I'm going to take a stab at the answer for at least these four. The business plans were almost comical in their overconfidence in their ability to kick out rent control tenants and replace them with market tenants, they were highly overleveraged and underwritten to future revenues that never materialized, and they were breaking the law and evading taxes.

Thursday, March 1, 2012

Spreads "SLASHED" due to high investor demand.

WSJ headline writers must keep a little book of crazy but eye-catching adjectives:

The dealer slashed yield spread premiums on bonds just below the safest tier of debt, a sign that investors are growing comfortable enough with the economic and real estate recovery to take slightly greater risks. Such bonds have also lagged a rally in CMBS this year, enhancing their attraction relative to top-tier debt, according to Roger Lehman, a strategist at Credit Suisse.

Tranche Rating (F/M) Size ($mm) C/E WAL Talk Final Guidance
A-1 AAA/Aaa 48.958 30.00% 2.29 S+65 S+55
A-2 AAA/Aaa 77.841 30.00% 4.64 S+105 S+105
A-3 AAA/Aaa 115.586 30.00% 6.86 S+135
A-4 AAA/Aaa 416.502 30.00% 9.6 S+115 S+110
A-M AAA/Aaa 92.95 20.13% 9.82 S+225 S+185
B AA/Aa2 44.711 15.38% 9.89 S+325
C A/A2 32.944 11.88% 9.89 S+425 S+385
D BBB-/Baa3 52.946

S+625 S+600