CMBS In the News

The WSJ reports on 3 CMBS stories:

Notes the loan is going into a multi-sponsor deal slated for the 2nd quarter.

The owner of the Keystone Summit Corporate Park, private-equity firm Keystone Property Group, recently refinanced the building for $53.5 million, including a $41.5 million first mortgage from Deutsche Bank AG and a $12 million junior loan from Pembrook Capital. What makes this deal stand out is the plan Deutsche Bank has for the first mortgage.

First Ritz to ever default. Ever. Described by a former colleague as 45 minutes into the desert, the middle of nowhere.

The hotel's closure is the latest stumble for the Lake Las Vegas development, which was planned around a manmade lake roughly 15 miles east of the Las Vegas Strip. Developer Transcontinental Corp., led by Ron Boeddeker and Texas tycoons Sid Bass and Lee Bass, began developing the 3,600-acre project in the 1990s to include thousands of upscale homes, three golf courses, a small casino and two resorts. But Transcontinental defaulted on a $540 million loan from lenders led by Credit Suisse and sought Chapter 11 bankruptcy protection for the project last year..

Regarding the MBA default on their building, Petrie calls Kempner a dolt:

The worst part of buying "that stupid office building," Mr. Petrie says, was that it led to emergency cost-cutting that forced the MBA to dismiss some "wonderful people" on its staff. Mr. Kempner, who resigned in 2008, says the board approved the purchase unanimously. "It was not my decision," he says. An MBA spokeswoman declined to comment.

I'm not even going to do an outake of this FT story - the reporter did a poor job writing this up - but maybe this is of interest to someone because it has opinions based on a survey of how various markets will perform (including CDOs and CMBS).

Also in the FT, the Beltway Battle, discusses the attempted takeout by Brookfield for CarrAmerica's DC properties, that Tishman has defaulted on. I initially thought the article was talking about the CarrAmerica portfolios in BALL 2006-BIX1 and CGCMT 2006-FL2, but the addresses listed in the article do not match up.

CoStar buys MBA building

CoStar just paid $41.25mm for a building that cost $90 mm to build just 2 years ago. But wait, there's more. MBA, the mortgage bankers association of America, paid for it partly with a $75mm mortgage loan. Although I don't know the terms, the timing is about right for a development loan to be coming due.

It's a little ironic that a major CRE news/data provider is buying a distressed property (it's shiny though) from a industry group that represents CRE bankers. One might venture so far as to say it is representative of the shift from large banks to boutiques.

UPDATE 2/9/10: The WSJ had this great quote today that is sure to make someone go postal...

The worst part of buying "that stupid office building," Mr. Petrie says, was that it led to emergency cost-cutting that forced the MBA to dismiss some "wonderful people" on its staff. Mr. Kempner, who resigned in 2008, says the board approved the purchase unanimously.

Bad Comparisons - MBA Edition

The MBA is out with their little delinquency chart that tells you nothing. It's like saying the apples at the corner market cost more than the steak at the butcher?!?! I know that they now disclaim as much, but why bother putting out a useless chart in the first place.

I'm not sure why they don't just put out a chart that compares, say, 60+ day delinquencies for each lender group. I've asked, and they claim not to have the data, which makes me wonder where they get the data from that they do have - any source should have both.

Commercial Mortgage Market Grew last year?!

The Mortgage Banker's Association noted today that Commercial Mortgages INCREASED last year by 5%, or $166 Billion.

Also noted that CMBS made up just 13% of the outstanding mortgages, but more surprising to me is that Insurance Co. share dropped by 11% - I had assumed they were taking market share from the void created by CMBS. The commercial banks (up 11%) and specialty finance companies (up 23%) are both taking significant market share, and of course the GSEs (up 23%) are responsible for virtually all of the MF lending.