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.

Blue Light Special - Sears Closing List

I like Eddie Lampert. I want him to win. How can you not like the story of how he got to where is, well, at least up until about 2003-ish when he bought K-Mart, followed a year later by the Sears acquisition. In all fairness, he quickly shuttered hundreds of stores and turned the new company into a cash cow in the short-term, but ever since the stores have allegedly (I haven't been in a K-Mart since at least 1995, and not in a Sears since at least pre-9/11 - if ever) suffered from a lack of adequate CapEx and ever-changing leadership. Never mind that the retail environment is just tougher today than it was a few years ago.

Then he missed an opportunity to capitalize on the value of the real estate at the peak of the market. Even in back in '04 when the Sears merger was underway, splitting the company into an OpCo/PropCo strategy where you would split the retailer into a Real Estate company (and leverage it up with CMBS debt) and an Operating Company made a lot of sense. The debt likely would have been fine today as well, given that they would have signed some long-term leases (of course, the OpCo may be stuck with lease payments if it shuttered 120 stores...). Within a few months, KKR/Bain/Vornado were divvying up ToysRUs in precisely the same manner.

Well, I'm still rooting for the guy. He announced over the break that they're closing 100-ish stores and they released a list of 80 closures in the last couple of days. They're list is in a PDF and doesn't copy out cleanly, so I pasted a complete list at the bottom of this for anyone who wants it.

CMBS Exposure - Please note that this is not an attempt to be a thorough or complete list, just a quick snapshot. There is a HIGH probability that there are some missing or incomplete data in the list below. The analysis simply consisted of pulling every property with a tenant with a name like "%Sear%" or "%K%Mart%" and matching against ZIP codes on their closure list (Zip codes change, Annex A's misspell stuff, etc.):

Deal	Loan Name	Loan Status	PCT of Deal
MSC 2007-IQ14	Ershig Mall Portfolio	Perform(w)	0.83%
GMACC 2004-C2	Shoppes at St. Lucie West	Grace(w)	2.06%
MSC 2005-IQ10	69th Street Philadelphia (I)	Grace(w)	4.43%
JPMCC 2006-CB15	Lightstone Portfolio	Del 90+ ss	3.31%
MSC 2005-T17	Coventry Mall	Del 30 ss	9.26%
CSFB 2002-CKN2	Crystal River Mall	REO	4.16%
MCFI 1996-MC1	Kmart/Rocky Mount	REO	100.00%
BACM 2005-6	Island Walk Shopping Center	Perform(w)	0.50%
WFDB 2011-BXR	BXR Loan	Perform	100.00%
CSFB 2001-CKN5	Manhattan Plaza	In Foreclosure	2.45%

In the table above, the formatting kept cutting off columns - if you'd like the complete mapping of columns shoot me an email at credarkspace@gmail.com

Full Closure List (Source)


Also, CRE Console put together a little map using one of my favorite free online mapping tools here. Over at Retail Traffic, Elaine Misonzhnik postulates that the real estate may be in high demand at many of these locations.

Espirit Closing 100% of US stores

Retail Traffic Court highlighted the news. Stores are being closed domestically, in Spain, Denmark and Sweden.