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Monthly Archives: January 2012

Luxury Apartments in Demand in Manhattan

Two deals on luxury apartments recently closed in New York City. One was the 144-unit 2 Cooper Square purchased by Wafra Investment Advisory Group. The other was the Columbus Square Complex, purchased in a joint venture between MetLife and UDR.

“The rental market is so competitive in New York and newer buildings are going to be the most competitive,” said Ben Thypin, director of market analysis for global commercial property research firm Real Capital Analytics.

According to data from Real Capital, the dollar volume of Manhattan apartment-building sales more than doubled in 2011 from the previous year to $4.6 billion. Manhattan apartment investors paid an average of $456,796 per unit last year, while nationally, multifamily investors paid about $101,925 per unit.

Luxury Apartments in Demand in Manhattan

Two deals on luxury apartments recently closed in New York City. One was the 144-unit 2 Cooper Square purchased by Wafra Investment Advisory Group. The other was the Columbus Square Complex, purchased in a joint venture between MetLife and UDR.

“The rental market is so competitive in New York and newer buildings are going to be the most competitive,” said Ben Thypin, director of market analysis for global commercial property research firm Real Capital Analytics.

According to data from Real Capital, the dollar volume of Manhattan apartment-building sales more than doubled in 2011 from the previous year to $4.6 billion. Manhattan apartment investors paid an average of $456,796 per unit last year, while nationally, multifamily investors paid about $101,925 per unit.

Refinancing in an Interesting Market

With over $400 billion in commercial real estate loans maturing in 2012, borrowers are looking to refinance despite the difficult market. The CMBS market (the usual conduit for loans in years past) will probably only be good for $30-50 billion of new volume, so the question remains: Where these new loans will come from?

One sector that is getting a lot of notice from lenders is retail. Dan Fasulo, managing director at Real Capital Analytics, states that the interest in retail is a “global phenomenon, as people realize that the worst is over and [these properties] have tremendous intrinsic value”. The caveat that he also provided is that this only applies to the first and second tier properties, while tertiary level properties will still struggle.

Capital infusions are also another way to avoid looking for new financing while the LTV of a property is out of line. SL Green recently recapitalized a property in New York by pouring in cash and issuing shares, thus bringing down the LTV and leading to a new mortgage on the property.

Refinancing in an Interesting Market

With over $400 billion in commercial real estate loans maturing in 2012, borrowers are looking to refinance despite the difficult market. The CMBS market (the usual conduit for loans in years past) will probably only be good for $30-50 billion of new volume, so the question remains: Where these new loans will come from?

One sector that is getting a lot of notice from lenders is retail. Dan Fasulo, managing director at Real Capital Analytics, states that the interest in retail is a “global phenomenon, as people realize that the worst is over and [these properties] have tremendous intrinsic value”. The caveat that he also provided is that this only applies to the first and second tier properties, while tertiary level properties will still struggle.

Capital infusions are also another way to avoid looking for new financing while the LTV of a property is out of line. SL Green recently recapitalized a property in New York by pouring in cash and issuing shares, thus bringing down the LTV and leading to a new mortgage on the property.

100 Properties Valued at $1.17B Set to Close in Spain

Two cash-strapped Spanish regions are working against the clock to close sales of more than 100 office buildings to U.K. and U.S. money managers for about €900 million ($1.17 billion), in this year’s first big test of investor appetite for Spain’s battered property sector.

The deals by the two regional governments are a rare sign of life in a sector hit hard by the downturn. Sales of office space in Spain collapsed in 2009, falling 75% to €1.2 billion, according to global commercial property research firm Real Capital Analytics. To view a recent list of deals in Spain, click here.

100 Properties Valued at $1.17B Set to Close in Spain

Two cash-strapped Spanish regions are working against the clock to close sales of more than 100 office buildings to U.K. and U.S. money managers for about €900 million ($1.17 billion), in this year’s first big test of investor appetite for Spain’s battered property sector.

The deals by the two regional governments are a rare sign of life in a sector hit hard by the downturn. Sales of office space in Spain collapsed in 2009, falling 75% to €1.2 billion, according to global commercial property research firm Real Capital Analytics. To view a recent list of deals in Spain, click here.

Billions in Commercial Real Estate Loans Coming Due in 2012

The principals and lenders in the commercial property market are beginning to see billions of dollars in commercial mortgages come due as the boom days of 2007 hit the five-year mark. And while the number of maturing loans is likely to hit a new peak this year, there are fewer lenders to help refinance this debt. Banks in Europe are suffering from the debt crisis, the CMBS market is still relatively small, and insurance companies remain very conservative and selective with the properties they recapitalize.

Special servicers, banks and other lenders may be more willing to resolve troubled property situations now. The number of recapitalizations has already blown up over the past year. Real Capital Analytics has researched over $13.3 billion worth of recapitalizations in the U.S. in 2011, the most since RCA began tracking commercial property sales in 2001. European banks are also driving more deal activity by offloading some of their American loan portfolios.

But not all borrowers will struggle — some landlords can simply pay down the loans. In January, Vornado Realty Trust refinanced a $430 million loan at 350 Park Avenue with $300 million in debt and $132 million in cash. It is currently in the market to refinance the maturing $232 million loan on the Manhattan Mall in Herald Square.

US Retail Market on Road to Recovery

Despite the recent Great Recession, the retail market in 2011 showed signs of health that had been missing the past couple of years. A recent episode of the “Commercial Real Estate Show” hosted by Michael Bull featured several guests that had a positive view of the market looking toward 2012.

Michael Niemira, chief economist of the International Council of Shopping Centers, stated that retail spending grew by 4.7 percent for chain stores in the past year. This was the highest growth total since 1999, though could also have been caused by inflation in retailer supply chains.

Investment sales also grew substantially in 2011, rising from $24 billion to $47 billion according to Kevin Imboden, senior market analyst at Real Capital Analytics. He went on to state that while investors are looking for new opportunities, there is still a conservative element to these transactions as the acquisitions mainly featured grocery anchored strip centers as opposed to trophy mall properties.

US Retail Market on Road to Recovery

Despite the recent Great Recession, the retail market in 2011 showed signs of health that had been missing the past couple of years. A recent episode of the “Commercial Real Estate Show” hosted by Michael Bull featured several guests that had a positive view of the market looking toward 2012.

Michael Niemira, chief economist of the International Council of Shopping Centers, stated that retail spending grew by 4.7 percent for chain stores in the past year. This was the highest growth total since 1999, though could also have been caused by inflation in retailer supply chains.

Investment sales also grew substantially in 2011, rising from $24 billion to $47 billion according to Kevin Imboden, senior market analyst at Real Capital Analytics. He went on to state that while investors are looking for new opportunities, there is still a conservative element to these transactions as the acquisitions mainly featured grocery anchored strip centers as opposed to trophy mall properties.

Billions in Commercial Real Estate Loans Coming Due in 2012

The principals and lenders in the commercial property market are beginning to see billions of dollars in commercial mortgages come due as the boom days of 2007 hit the five-year mark. And while the number of maturing loans is likely to hit a new peak this year, there are fewer lenders to help refinance this debt. Banks in Europe are suffering from the debt crisis, the CMBS market is still relatively small, and insurance companies remain very conservative and selective with the properties they recapitalize.

Special servicers, banks and other lenders may be more willing to resolve troubled property situations now. The number of recapitalizations has already blown up over the past year. Real Capital Analytics has researched over $13.3 billion worth of recapitalizations in the U.S. in 2011, the most since RCA began tracking commercial property sales in 2001. European banks are also driving more deal activity by offloading some of their American loan portfolios.

But not all borrowers will struggle — some landlords can simply pay down the loans. In January, Vornado Realty Trust refinanced a $430 million loan at 350 Park Avenue with $300 million in debt and $132 million in cash. It is currently in the market to refinance the maturing $232 million loan on the Manhattan Mall in Herald Square.

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