Sep 3, 2009 | 2 Comments | Sean Mills
I know of four different groups whom are focusing on buying single family residences (SFRs) in Arizona to take advantage of the high inventory of REOs and auction deals to rent out for cash flows and long term appreciation, the shadow inventory, referred to in this article.-Sean
The recent struggles of two Irvine, Calif.-based apartment firms [...]
I know of four different groups whom are focusing on buying single family residences (SFRs) in Arizona to take advantage of the high inventory of REOs and auction deals to rent out for cash flows and long term appreciation, the shadow inventory, referred to in this article.-Sean
The recent struggles of two Irvine, Calif.-based apartment firms have shone the spotlight on exactly how bad things are on the West Coast, particularly in Arizona.
In early June, five Phoenix properties owned by Bascom Arizona Ventures, an affiliate of The Bascom Group (No. 29 on Multifamily Executive’s Top 50 list of apartment owners), were foreclosed upon, according to Inside Tucson Business. The complexes owed a combined $53 million in principal, according to the paper. Bascom would not return calls from Multifamily Executive.
“There are a multitude of owners facing the same challenges,” says Bill Hahn, managing director of Sperry Van Ness Real Estate Services in Phoenix. “There’s nothing unique about that the company [Bascom] having trouble with their five deals here.”
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Sep 3, 2009 | No Comments | Sean Mills
In the past few months, a number of private firms have issued initial public offerings (IPOs) or announced they are mobilizing for public offerings in an attempt to scoop up what they anticipate to be a flood of distressed commercial real estate. And the movement doesn’t seem to be waning, with New York-based Marathon Real [...]
In the past few months, a number of private firms have issued initial public offerings (IPOs) or announced they are mobilizing for public offerings in an attempt to scoop up what they anticipate to be a flood of distressed commercial real estate. And the movement doesn’t seem to be waning, with New York-based Marathon Real Estate Mortgage Trust and Brookfield Realty Capital announcing last week that they want to raise $500 million and $300 million, respectively.
More than 10 private equity groups targeting real estate have either filed or announced plans to file IPOs this summer. The most notable was Greenwich, Conn.-based Starwood Property Trust, which raised $800 million, making it the largest REIT IPO to date this year. The goal of these groups: To buy or originate debt used to finance commercial real estate. They acknowledge commercial opportunities in any number of sectors but say multifamily loans won’t be a specific focus.
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Sep 3, 2009 | No Comments | Sean Mills
One of my partners and I were looking very hard at a deal in the Portland area and the biggest stumbling block with the sellers and listing agent was the vacancy rate for the building. Of course they liked a 5% vacancy rate with a building which had an actual YTD vacancy rate of 8.9% [...]
One of my partners and I were looking very hard at a deal in the Portland area and the biggest stumbling block with the sellers and listing agent was the vacancy rate for the building. Of course they liked a 5% vacancy rate with a building which had an actual YTD vacancy rate of 8.9% and current rate approaching 20%. Needless to say we weren’t buyers based on their numbers.
If you want to figure a good rate look at the unemployment rate in the areas you are interested in, for Portland Oregon area that rate is 13.2%. It makes sense vacancies should trail and track the unemployment numbers especially for a blue collar working class building. Well enough of my rant here is an article from the latest issue of Multifamily Executive.-Sean
Rental Owners Report Soaring Vacancies: People Who Lose Homes Move in With Families Instead of Renting Apartments
Aug. 28–Southern Oregon Rental Owners Association reported a 9.4 percent vacancy rate for June, the highest level in the 20 years that the organization has surveyed its members.
“We knew some of our renters couldn’t afford it and moved in with families,” said association manager Roberta Claudson of SOROA, which consists of rental owners with anywhere from a few rentals to hundreds of properties. “We thought it would be balanced out by people who had lost their homes. But apparently, they’ve moved in with families, too.”
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Sep 3, 2009 | No Comments | Sean Mills
Nice to hear what most of are already thinking. What would be nicer was if the Feds could actually do something about it.-Sean
If bankers are feeling a little nervous Buy Drugs in the run-up to this month’s G-20 meeting of the global leaders in Pittsburgh, they only have themselves to blame.
Earlier this summer, bankers [...]
Nice to hear what most of are already thinking. What would be nicer was if the Feds could actually do something about it.-Sean
If bankers are feeling a little nervous Buy Drugs in the run-up to this month’s G-20 meeting of the global leaders in Pittsburgh, they only have themselves to blame.
Earlier this summer, bankers appeared to be doing a good job persuading politicians that a rapid return to business as normal was the best guarantee of an economic recovery — and the recouping of the huge sums of public money used to rescue the financial system. Central bankers and regulators feared that momentum for global financial reform was being lost.
But that was before bankers started awarding themselves giant, boom-style multiyear guaranteed pay packages, doubling and trebling their basic salaries and accruing billions of dollars for this year’s bonus pool.
The political backlash was predictable: European leaders, including French President Nicolas Sarkozy, German Chancellor Angela Merkel and U.K. Prime Minister Gordon Brown, will be seeking global policies to clamp down on bankers’ pay that could yet lead to major changes to the industry.
Banks claim they are only paying their staff the market rate and that failure to do so would damage their businesses. But that misses the point: A system where banks that have received massive support from governments and central banks think it is sensible to prioritize paying outlandish compensation packages to their employees ahead of repaying government capital, rebuilding their equity to support new lending or even rewarding their long-suffering shareholders is not a free market but a racket.
Still, governments must keep their focus. Bonuses are a symptom not a cause of market failure. The real issue is the structure and scale of the banking industry: Banks deemed too big to fail need to be cut down to size or more closely regulated and governments need to decide what financial activities should come within the scope of their implicit guarantees. But these are issues best addressed via capital and liquidity regimes, rather than Mr. Sarkozy’s impractical proposals for new taxes and bonus limits.
This task cannot be left to regulators, whose mandate is to mitigate risk to the financial system not to change the system itself. On a purely risk-based assessment, for example, the Financial Stability Board might raise capital requirements for derivative trading while leaving those for liquid markets such as foreign exchange or commodities in tact — so that banks still have plenty of scope for gambling.
If G-20 leaders really want to change the culture and structure of the industry, they will need to give regulators a beefed-up mandate — or risk allowing the bankers off the hook once again.
Sep 3, 2009 | No Comments | Sean Mills
The markets are all over the place in regards to investments and no one can seem to agree on if the current track being pursued by the Feds will return the desired effect for the economy. What is true is we need more production to boost our GDP, more jobs created or sustained and the [...]
The markets are all over the place in regards to investments and no one can seem to agree on if the current track being pursued by the Feds will return the desired effect for the economy. What is true is we need more production to boost our GDP, more jobs created or sustained and the real estate market to firm up. Can’t promise any of these items but there is some light at the end of the day, US job loss is slowing. -Sean
The pace of job losses slowed last month, a report released Wednesday showed, but the small improvement suggests a return to job growth could still be many months away.
Service-sector employment declined by 146,000 in August, while goods-producing jobs including construction and manufacturing fell by 152,000, according to Automatic Data Processing Inc., a payroll firm.
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