Crexus Investment Group said yesterday evening that it rejected an unsolicited $254 million acquisition offer by Starwood Property Trust. In the late afternoon yesterday, Starwood made the $14-a-share-offer to acquire Crexus, a Manhattan-based real estate investment trust. The Starwood offer was contingent on Crexus suspending its previously announced offer to buy $586 million in real estate assets from Barclays Capital Real Estate Finance. Crexus planned to launch an initial public offering of $50 million shares of common stock, which would be used to finance the acquisition of the Barclays assets. [more]

Gary Barnett and Extell’s 356-366 10th Avenue

Despite evidence of an improved real estate market in Manhattan, one of the city’s most prominent builders, Extell Development, last week lost a major West Side development site it assembled for at least $44 million to its lender, likely the first time ever the co [more]

The New York metro area has the second-largest backlog rate for bad loans among the country’s top 10 markets, according to a recent Barclays Capital report. With 21 percent of its loans still in the delinquency pipeline, the region, which thus far hasn’t been hit as hard as others by price declines, could take longer to recover as the dud loans work their way through the system. The Miami market also bears the weight of a substantial foreclosure backlog, the report says, having worked its way through just 18 percent of the process of liquidating its delinquent loans. The common ground likely stems from the judicial foreclosure process in states like New York and Florida. Since judges have to sign off on all foreclosures there, the process is more prone to delays. [WSJ]

Following the news that Morgan Stanley upgraded Home Depot stocks, CNBC sat down with two hardline retail experts to discuss what potential gains in home improvement stocks say about the housing market recovery. According to Stephen Chick, managing director of hardline retail at FBR Capital Markets, lumber prices are beginning to rebound — having seen price increases over the last two to four months not matched since 2004, and that could be a positive, though often-underestimated indicator for housing. Michael Lasser, vice president and senior research analyst of hardline retail at Barclays Capital, pointed to an increased demand for appliances. Lasser said it’s too soon to tell whether indicators from stores like Lowe’s and Home Depot mean a full-fledged recovery, but retailers are certainly benefiting from higher transactional volume, stemming from more people moving to new homes and doing improvements and repairs.

475 Fifth Avenue and P. Diddy (Building photo source: PropertyShark)

P. Diddy is suing the landlord at his flagship clothing store, Sean John, at 475 Fifth Avenue for $2.5 million (see suit document via TMZ after the jump). The suit alleges the landlord, 475 Fifth 09 LLC, never removed scaffolding which was erected in August 2006, leaving customers unable to view the storefront and costing P. Diddy $5 million in lost revenues at the once-bustling store. Christian Casey, the company which runs P. Diddy’s clothing line, said revenues at the flagship store have been cut in half because of the scaffolding and want the lease rescinded for an alleged breach of contract. Barclays Capital took back the building from developers Westbrook Partners and Joseph Moinian earlier this year. [TMZ] and [Courthouse News Service]
[more]

The W Hotel

The W Hotel Union Square is facing imminent default, according to a recent monthly report of 30-day-plus delinquencies for all commercial properties by Barclays Capital. The hotel is serving as collateral for a $115 million W New York-Union Square loan, the report shows. The loan has been transferred to a special servicer, being classified for imminent default. Barclays Capital’s report shows that 30-day-plus delinquencies for all commercial properties jumped 5.5 percent in October. The CMBS remittance report shows that the worst performing commercial mortgage category was hotels, which hit a record-high delinquency rate of 10.7 percent among loans that originated in 2007.

From the October issue: New York City is at a peculiar crossroads. For months, investors have
marshaled unprecedented amounts of capital, salivating at the prospect
of snapping up distressed properties. “We’re fortunate this cycle to
have the most dry powder in our
history,” Blackstone Group president Tony James said last month at the
Barclays Capital Global Financial Services Conference, which was held
in Manhattan. The firm has about $28 billion in unspent capital, he
said. About $12 billion of that is earmarked for real estate. “We’re
just beginning what will be the best period in decades for private
investing,” he said. Dan Fasulo, a managing director at Real Capital
Analytics, estimated
that $50 billion has been raised and is ready to be deployed into
distressed real estate. Paradoxically, investors have found very little
worth buying so far, in large part because banks continue to hold
troubled loans on their books, hoping conditions will improve. [more]

Last month saw the third highest foreclosure rate on record, according to CNBC’s real estate reporter Diana Olick, raising questions over whether this month is an anomaly or the start of a heightened foreclosure environment. Michelle Meyer, vice president at Barclays Capital, told CNBC that there are a large number of seriously delinquent mortgages in the field right now, causing a possible acceleration of foreclosures in the near future. According to Meyer, her group expects to see another 6 million foreclosures pop up over the coming three years. [more]

Barclays Capital is hoping to sell 475 Fifth Avenue, which it took back from developers Westbrook Partners and Joseph Moinian earlier this year. Moinian and Westbrook closed on the building for $160 million in 2007. Barclays is now asking $105 million for the property, sources told the New York Observer. That’s about $381 per square foot for the 275,284-square-foot property, which is largely empty, the sources said.