Best Buy Closure List

Following their initial announcement on 3/30, Best Buy posted a closure list, and surprisingly I only found 1 of the outstanding loans in CMBS deals. I may be off, because I am not attempting to do a thorough and complete job here, but I did for all loans named Best Buy that had matches on the city name from the list provided by Best Buy - then I further filtered the list by visually checking the street names. I'm sure some analyst who is actually getting paid to do research like this will post an update some day this week, but in the meantime please check out my advertisers!

Best Buy's official list here.

The Matteson store highlighted below is in BSCMS 2002-TOP6 as Best Buy Portfolio - Matteson IL (II) and actually paid of 6 months ago (but I listed it here just so we can all ponder on the horrible timing of that decision), and the West Dundee store listed below is in MLCFC 2006-3 as Best Buy West Dundee.

Store Name	Address	City	State
Casa Grande	1004 N Promenade Pwy	Casa Grande	AZ
Lake Pleasant	10134 W Happy Valley Rd	Peoria	AZ
East Palo Alto	1751 E Bayshore Rd	East Palo Alto	CA
Westwood	10861 Weyburn Ave	Los Angeles	CA
Manteca	934 Perimeter Dr	Manteca	CA
Moreno Valley East	27220 Eucalyptus	Moreno Valley	CA
Ontario	4120 E 4th St	Ontario	CA
Pittsburg	4405 Century Blvd	Pittsburg	CA
Jamboree	2857 Park Ave	Tustin	CA
Arapahoe & Parker	15800 E Briarwood Cir	Aurora	CO
The Forum	9370 Dynasty Dr	Fort Myers	FL
Oldsmar	11655 W Hillsborough Ave	Tampa	FL
Fayetteville	128 Pavilion Pkwy	Fayetteville	GA
Loganville	4014 Atlanta Hwy	Loganville	GA
Addison	1038 N Rohlwing Rd	Addison	IL
87th & Dan Ryan	8900 S Lafayette Ave	Chicago	IL
Deerfield	200 S Waukegan Rd	Deerfield	IL
Matteson	4707 Lincoln Mall Dr	Matteson	IL
Mundelein	1100 N Rt 83	Mundelein	IL
West Dundee	979 W Main St	West Dundee	IL
Speedway	10500 Parallel Pkwy	Kansas City	KS
Back Bay	360 Newbury St	Boston	MA
Wareham	2421 Cranberry Hwy	Wareham	MA
Inner Harbor	600 E Pratt St	Baltimore	MD
Hunt Valley	118 Shawan Rd	Hunt Valley	MD
Biddeford	405 Mariner Way	Biddeford	ME
*Brooklyn Center	5925 Earle Brown Dr	Brooklyn Center	MN
*Edina	3200 Southdale Cir	Edina	MN
*Hutchinson	1350 Hwy 15 S	Hutchinson	MN
*Lakeville	18350 Orchard Trl	Lakeville	MN
Rochester South	4540 Maine Ave Se	Rochester	MN
*Rogers	20870 Rogers Dr	Rogers	MN
Ellisville	15678 Manchester Rd	Ellisville	MO
Monroe	3151 W Highway 74	Monroe	NC
Rocky Mount	1100 N Wesleyan Blvd	Rocky Mount	NC
Millard	12210 K Plz	Omaha	NE
East River Plaza	517 E 117th St	New York	NY
Steelyard Commons	3506 Steelyard Dr	Cleveland	OH
Salem Mall	5031 Salem Ave	Dayton	OH
Caguas	Las Americas Expry PR52 Zafiro	Caguas	PR
Middletown	890 W Main Rd	Middletown	RI
Hickory Hollow	5255 Hickory Hollow Pkwy	Antioch	TN
Techridge	12901 North I-35	Austin	TX
*Woodlake Parkway	6218 Woodglen	San Antonio	TX
Landmark Mall	5901 Stevenson Ave	Alexandria	VA
Cosner's Corner	9745 Jefferson Davis Hwy	Fredericksburg	VA
East Richmond	4410 S Laburnum Ave	Richmond	VA
Mill Plain	16611 Se Mill Plain Blvd	Vancouver	WA
* indicates stores notified March 29, 2012 of closure plans
Note: Two stores in Kansas City, MO (Metro North) and Scottsdale, AZ (Shea) permanently closed in February 2012.

World Financial Center evacuated due to suspicious package...

While you were out...

Can I not take a few days off without the entire market shifting more than it has the prior 3 months?


Maiden Lane III supply pushed AJ prices down as much as 5 points. The collateral  includes two CDOs that are primarily collateralized by at least $2.8 billion of AJs and $2.6mm in AMs. Someone commented that it was more like $8 billion of AJs, but I honestly haven't looked yet. Both are big numbers. (DB, comments, news)

DB took a look at 1Q 2012 performance and made a few conclusions that were interesting.

1. Approximately 50% of loans maturing in the 1Q paid off with a <2% loss.
2. Smaller loans (<$10mm) had more success paying off with a 45% refi rate, compared to a 27% refi rate on >$50mm balance loans.
3. Hotels and MF had the highest refi rates, of approximately 42% and 40%, respectively.
4. CWCapital continues to exhibit the slowest liquidation rates and longest disposal timelines

$103.8mm Transbourne Center and Arrowhead Crossing loans pay down in MSC 2005-HQ6

$1.3 billion Ala Moana refied - CD 2007-CD4, CD 2006-CD3, CWCI 2006-C1, CGCMT 2007-C6, CWCI 2007-C2 E, CGCMT 2006-C5 (CREDirect)

Office Rents were up 5.6% in Midtown South on Tech Demand (Bloomberg)

$117mm Nashville Multifamily Portfolio's (LBUBS 2007-C7) 4 properties are listed for sale. Owned by Lehman/Apogee New Dawn partnership. No loss expected. (Barclays)

Lincoln Properties won 1000 Wilshire Boulevard (LBFRC 2007-LLFA)

Oaktree raised $1billion (Oaktree RE Opportunity Fund V) to buy both hard assets and debt domestically and internationally (as much as a 35% allocation overseas) (CREDirect)

701 Gateway Boulevard ($46.9mm loan LBUBS 2007-C3) was sold to DivocWest. (CREDirect)
Additional loan sales are circulating:

1. 801 North Brand ($70.5mm, MPG, GSMS 2005-GG4)
2. 700 North Central ($27.46mm, MPG, GSMS 2005-GG4)
3. Sacramento Corporate Center ($40.75mm, Chase Merritt, GCCFC 2007-GG9)
4. Hookston Square ($30.5mm, Griffin Capital, GCCFC 2005-GG5)

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.

CMBS is Back!!!

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

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...

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.

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.

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

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% ...

Maturities

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...

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...

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 ...

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.

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.

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

It's all cupcakes and unicorns in CMBS

CMBX.4.AMs are at 82, up from 76 at the start of the year, and CMBX.4.AJs are at 67, up from 57 at the start of the year.

Issuance Is Ramping Up:

Deutsche Bank will sell about $941 million in commercial mortgage-backed securities this week, kicking off a busy period for a market that may be confronting new headwinds.

It's part of the more than $6 billion in new issues that are coming as investors are beginning to question the market's ability to sustain gains won since November, analysts said. In addition to the impact of supply, growing speculation of Middle East unrest and lingering unease over the lasting power of a Greece bailout have made investors wary.

Freddie is talking their 10year from the latest K series (FREMF 2012-K17) at +63.

One of the TOP stories this morning on Bloomberg was "Manhattan Lures REITs Capitalizing on Soaring Rents: Mortgages"

Pretty much everything is going great until that girl with the tattoos bends you over the counter and rams a cupcake up your pachooka. All us guys thought y'all were getting into your scivvies to have a friendly cupcake fight followed by some light oil wrestling, then the wild one had to get all jammed up and take it in a totally different direction. We're not entirely disappointed in the outcome, but do expect some basic rules of sportsmanship to be adhered to.

I'm still of the opinion that the girl with all the tattoos is about to try to ram something up my pachooka when I least expect it. I'm not totally adverse to the idea, but don't bother calling to sell me bonds today.

Come See the Softer Side of Sears

The WSJ reports that yesterday (I totally missed it) Big Ed announced they'd jettison the real estate - a drunk hobo nearby reportedly overheard him say, "If only I had thought of this 6 years ago!".

Sears is selling 11 stores to General Growth Properties Inc., the company that owns the malls they anchor, for $270 million. Sears also intends to raise $400 million to $500 million through a rights offering, spinning off a company that will control roughly 1,250 small but profitable franchised stores that sell Sears products.

For the remaining 2,000-ish stores:

executives offered few new specifics about their plans for Sears over the next couple of years, reiterating their intention to use technology to revive the fortunes of the more than 2,000 remaining Sears and Kmart stores.

Phew, technology will save them. Glad they covered that one /end sarcasm.

They also are verbally stating that a Land's End sale is not off the table, the one piece of the pie that my wife is convinced has any value at all (she bought me a nice sweater and button up shirt from Land's End for Valentine's Day, reaffirming that we are, in fact, old and prudish). I like the real estate play - there is value there - but the timing is off.

Blackstone raises $10 billion in 7th Real Estate Fund

The wsj reports.

Blackstone Group LP has raised more than $10 billion in less than a year for its latest real-estate fund and is looking to raise an additional $2 billion by year's end

...

This time around, Blackstone was able to raise the amount in less than a year—and about $4 billion since January—a faster pace than the previous fund, these people said. A second closing for the fund is expected next week.

The IO Abbatoir

As we noted in December, Moody's decided to catch up to the rest of the rating agencies (who did the same thing 2 and 3 years ago) and the rest of the market, which apparently understood IOs eons before the rating agencies by publishing a new opinion and methodology piece and downgrading 530 IOs (almost all were WAC IOs).

If you missed the Moody's report, Nomura published a great paper this morning that sums it up neatly in 2 pages.

[sarcasm>The WSJ has been closely following the coming WAVE of downgrades, so we look forward to their coming article on the subject.

Happy Mardi Gras?

Another Mardi Gras spent in a city where no one appreciates the fine holiday. No king cake, no go home early so you can go to a ball, no laissez les bons temps rouler comments, not even a come into work the next day hungover with blurry images of bared breasts etched into my memory from the night before. Come in to work today, and not even a single black ashen crossed forehead or hungover bleary-eye in the entire work krewe - no sinners OR saints. No joie de vivre at all, in fact.

After pouting about missing out on the best holiday ever (followed closely by Halloween), I realized that the worst part of it is that I married into an acadian family with roots in Abbeville LA. I am the one that should that should be introducing the yankees that surround me to this glorious celebration. This is all my fault! I am to blame for their boring lives the past couple of weeks! I have met the enemy, and he is us.

It's actually very depressing, and I'm planning to spend most of Friday at this fine establishment where I can drown my sorrows:

Abercrombie & Fitch Thinning the Herd

TrafficCourt posted that Abercrombie & Fitch were shuttering approximately 180 stores representing 18% of its total US store count by 2015.

CRE Prices in 2017?

CREConsole posted a summary and links to the full report here.

Empire State Realty Trust IPO announced

Apparently the rumors are true. Bloomberg reported this morning that a $1 billion IPO for Empire State Realty Trust was announced that would "consolidate a group of closely held companies" (Empire State Building Associates, 60 East 42nd St Associates, and 250 West 57th St Associates) with Malkin Holdings LLC as the supervisor. Bank of Amerrilwide and Goldman are the co-leads.

Sears for sale?

There are so many options with Sears headlines: The Good Life at a Great Price. Guaranteed. Come See the Softer Side of Sears, Blue Light Special, etc.

Anyway, we noticed over in Traffic Court that there are purportedly "rumors" going around that it is for sale...

Whoever buys Sears would likely do so for the value of its real estate rather than for the value of its retail brand, given that the company owns properties in many of the nation’s oldest and best malls.

Improvements in Multifamily sector driven by NYC MSA

Herschmeyer at Co-Star notes:

Removing these loans [see list below] reduces the multifamily Fitch Loan Delinquency Index from 14.4% to 9.3% at the end of 2011. This moves multifamily from the worst performing of the five asset classes to the middle of the range with office (6.8%) and retail (6.9%) being the best performers and hotel (12.0%) and industrial (10.25%) being the worst.

In 2006 and 2007, issuers underwrote fixed-rate multifamily loans with stabilization plans, whereby rent stabilized units were converted to market. These loans, Stuyvesant Town/Peter Cooper Village ($2.8 billion), The Belnord ($375 million), Riverton ($225 million), and Savoy Park ($210 million) for a total of $3.6 billion did not see their stabilization plans pan out.

I might add to that last paragraph, "because each of the aforementioned projects were blatantly attempting to evade taxes, break NY state law, and all had ludicrous plans based on the expectation that they could simply kick out the rent control tenants and replace them with market rents - a strategy that has parted fools with their money for nearly a century". But I wasn't consulted, so I'll keep my thoughts to myself.

Delhaize Closures (aka Food Lion, Bloom and Bottom Dollar)

The WSJ reported nearly 3 weeks ago that Delhaize was closing stores, and made a great little list (see link), which I fully intended to go through and match up to grocery-anchored strip centers in CMBS deals. Also, the folks over at CRE Console put together a nice little map.

Life got in the way of my plans and I never got around to it. If you have a good CMBS exposure list, please send it over and I will append my quick cursory search results below. PLEASE NOTE that the results below are only matched on city name and partial street address match - so, if their list says the city is New York, and the loan file says Brooklyn, then it's not include. Also, if the both places list New York but one says 123 Apple Street NW and the other says 123 Apple Street SE, then it is erroneously considered a match here.


I retrieved 10 potential matches on the first run out of a total of 590 CMBS properties with Delhaize, Food Lion, Bloom, or Bottom Dollar in the name.

Property Name	Deal
Weaverville Plaza	NASC 1998-D6
Belle Station	BSCMS 2002-PBW1
Northwest Commons Shopping Center	JPMCC 2002-CIB4
DeBarry Place Shopping Center	JPMCC 2004-C1
Lanier Commons Shopping Center	SBM7 2001-C1
Anchor Plaza	CGCMT 2005-C3
Cloud Springs Plaza	MLCFC 2006-1
Ashburn Town Center (A)	MSC 2004-IQ7
Ashburn Town Center (B)	MSC 2004-IQ7
Eisenhower Square	WFDB 2011-BXR

Outback Steakhouse getting refied

Fox Business? reports:

BAML and DB are going to refi the $775mm senior loan in the Bambi deal into a new $175mm mezz loan, $325mm in senior debt, and $113.2mm in equity raised from selling 68 of the 300-ish properties.

The new CMBS are being used to refinance $775.7 million of existing CMBS debt that was originated in 2007 to finance the acquisition of OSI by investors advised by Bain Capital Partners and Catterton Partners, the term sheet said.

A sale of 68 properties for about $195.5 million and $113.2 million in cash will be used to repay the existing CMBS and recapitalize the investment firm, Private Restaurant Properties.

The collateral includes Outback Steakhouse, Carrabas, Bonefish, Cheeseburger In Paradise, Fleming's Steakhouse, Roy's (WTF is this?), and Lee Roy Selmon's (RIP) restaurants and represents about 20% of BALL 2007-BMB1.

All condolences aside, one should carefully consider whether or not to include "Roy" in the title of a restaurant. It makes me think of Lloyd's Seafood where you can get all you can eat beer battered fish and onion rings for $8 - that's not necessarily a bad thing, but it is what it is.

Bank of America Plaza in Atlanta going to foreclosure sale

From Bloomberg:

Atlanta's 55-story Bank of America Plaza, the tallest tower in the Southeast, is set to be sold at an open outcry auction on the steps of the Fulton County Courthouse tomorrow after landlord BentleyForbes missed mortgage payments. It bought the skyscraper in 2006 for $436 million from Bank of America Corp. and Cousins Properties Inc. in the city's biggest property deal

Speaking of dark space...