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.

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% ...

Comings and Goings

Mark Heschmeyer, who I'm a big fan of, has some good highlights in his co-star column.

• New Freddie deal
• American Assets Trust raises $563.75mm (looks like they paid 8 points for the money though)
• Cole RE Investments raises $315mm senior unsecured credit facility via BOA, JP, USBank, and RBS
• First Potomac raised $100mm in preferred equity

Loans are getting done - again, please see Mark's column for more.

• Kilroy ($135mm @ 4.27% 7 year, on a SanFran property),
• ARC acquired and financed Snow View Plaza and Lakeside Plaza,
  
• $6mm CTL on a Walgreens in Medford OR (24.6years, amortizing, 6.15%, 88% LTV)
• $5mm Walgreens in Raleigh NC (10/30, 6.253% coupon, 66.4% LTV)
• Thomas D Wood secured $4.5mm for a shopping center bank loan at 1mL+335 and a 0% LTV.
• Thomas D Wood secured $3mm for a shopping center. Fully amortizing with a 15 year term and a 6.25% rate.

In other news, there's a glitch in the housing market in Brooklyn and Queens with sales dropping 29.9% and 41.7%, respectively in the 4th quarter. Prices continued to drop throughout the year as well, down 8.4% citywide - Massey Knakal expects further declines.

At the same time, CRE sales are expected to continue to strengthen in the Manhattan market in CBRE's opinion.


Calendar:

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.

80,000

That is a big number. It is more than twice the size of the NYC police force, it is twice the size of the county's population where I grew up, it is roughly the number of rockets Hezbollah has stockpiled according to its enemy Israel...

And, according to Mark Heschmeyer, it is the number CRE properties in distress within the US. You should read his article for the details, his articles are extremely well done in general, and it is hard to summarize his conclusions better than he does it himself.

UPDATE: I corrected my poor grammar and spelling errors - another reason to read the original article and not my summary.

Cap Rates

CoStar has an article out with some cap rate numbers based on the Korpacz Real Estate Investor Survey:


Class A Office:
4Q 07: 6.1%; 180 transactions
3Q 08: 6.6%;
4Q 08: 7.6%; 80 transactions
1Q 09: 7.9%; (thru 3/18); 42 transactions

Warehouse & Distribution:
4Q 07: 7.1%; 279 transactions
4Q 08: 8.1%;
1Q 09: 8.6%;

Multifamily
4Q 07: 5.9%; 629 transactions
4Q 08: 6.8%; 355 transactions
1Q 09; 6.8%