Sunday, August 26, 2012

LNR versus the Universe

Our favorite CMBS blogster, well one of our top 2 favorites (I still am crushing on Misonzhnik), Mark Heschmeyer over at Co-Star highlights some of LNRs stats based on a WF report out last week.

  1. LNR has the highest liquidation-to-modification ratio of all the Specials at 11:1, up from 6.6:1 one year ago. The second highest is Berkadia @ 6:1, up from 5:1 last year.
  2. LNR is very active in selling off non-performing loans
  3. Has the highest average loan size for modified loans at $93.3mm
  4. One of the highest average loan size for liquidated loans, at $11.7mm
Check out his article for more.

CMBS Rally to continue?

A lot of people thinks so, but it might taper off after seeing a week of pretty strong supply and what appears to be waning demand.

Dealers continue to build up big positions, but they've been wrong, in terms of timing, before. It also may indicate that they're just not finding the other side of the transaction.

I'll report back the precise future as soon as I get this time machine figured out.

Wednesday, August 15, 2012

That is going to leave a mark

Highland Mall sold for $1.03mm, and had liquidation expenses of $13.2mm resulting in a 119.99% loss to the trust on the loan that was originally a $71mm loan and was the largest loan in the JPMCC 2002-CIB4 deal.

Highland was a feisty little cat on her way down, but  this never looked like it was going to end well.

It is now home to Austin Community College, but was once a Rouse Mall and most recently a jv between GGP and Simon. Further, while dire, Realpoint only projected a 75% loss on the loan.

UPDATE: CrabsOfSteeel found this gem from (which seems like an otherwise dead site):

Monday, August 13, 2012

Delinquencies pushed down by modifications

As CrabsOfSteel mentioned not long ago, delinquencies are "improving" to some degree due to modifications, but that doesn't mean the bondholder's cash flow is improving. From Fitch:
CMBS late-pays fell 14 basis points (bps) last month to 8.48% from 8.62% in June. Helping to drive the downward movement were two large loan modifications. In July, the $305 million Schron Industrial Portfolio (GCCFC 2007-GG9) and the $210 million Savoy Park (CSMC 2007-C1) were both modified.

The "Macabre" Pier at Ceasars

From Bloomberg:
C-III Capital Partners, the loan servicer handling the property since the owner defaulted on an $80 million mortgage, canceled the auction yesterday conducted online by The final bid was $25 million, compared with an appraisal of $56.6 million in January 2011, according to Nomura Holdings Inc. The property was estimated to be worth $210 million in 2007, according to data compiled by Bloomberg. “There was a kind of a macabre fascination,” said Lea Overby, a debt strategist at Nomura. “People were surprised the bids were coming in so low. People had it in their heads that it was going to come in closer to the appraised value.” ...
That level would cause a principal hit to the AJ. Who has two thumbs and doesn't own that AJ?

Friday, August 3, 2012

CMBS Strategist sues former employer, UBS


So let’s take a look at this lawsuit filed yesterday by a UBS commercial mortgage strategist named Trevor Murray. He seems not to have gotten along with his boss Ken Cohen, a former Lehman guy now in charge of UBS’s CMBS business. From the complaint:
13. Plaintiff was … the target of a concerted, extended effort by UBS Securities, through Mr. Cohen, as well as others reporting to Mr. Cohen, to influence Plaintiff to skew his published research in ways designed to support UBS Securities’ ongoing CMBS trading and loan origination activities.
14. In June 2011 Mr. Cohen implored Plaintiff, in words or effect, to help “improve conditions in the CMBS market” because this was to be a “significant revenue generator” for the investment bank at UBS Securities. In or around September 2011, Mr. Cohen, along with the head CMBS trader, sat directly next to Plaintiff and told him that a person from the market had approached Mr. Cohen about Plaintiff’s research. Mr. Cohen stated that he disagreed with Plaintiff’s research, and asked Plaintiff, so as not to “confuse” the market, to inform the head CMBS trader about his research ideas prior to publication in order to maintain “consistency” between what he and they were saying about UBS Securities’ CMBS products and trading positions.
They go on to point out that it sounds like he was actually a strategist, not a researcher, so the research rules they're trying to trip UBS up on are not going to apply. If your a strategist, you work for the desk and are biased, if you're a research analyst you're supposed to be unbiased. It also sounds like he was off message with his employer, the desk. DB then points out that it turns out his position was kind of wrong too, so, that kind of sucks for him. So, you have a guy whose boss thinks he's doing a bad job, data backs that up at least to some extent, he gets fired, and then he sues and makes allegations which probably open him up to damage claims from UBS. I have a feeling this isn't going to work out well for him and he's going to end up spending $20-$50k to figure that out.

To be clear, that's just my 5 minute take away on the matter - he may have a more compelling case, but it's not apparent from the DB article or the Bloomberg and Reuters stories that are out about it either...