Miami Beach-based LNR Property, which is partly owned by Vornado Realty Trust, is looking to buy the junior portion of $600 in mortgages made by Cantor Fitzgerald, a source said. The market for newly-issued commercial mortgage-backed securities reignited almost a year ago, and this would be LNR’s first purchase of the debt since that time. “It’s an attractive space for those that are seeking higher yields and have a good understanding of real estate,” said Patrick Sargent ,a partner at Dallas law firm Andrews & Kurth. As Cantor Fitzgerald tries to turn itself into a full-fledged investment bank, it may issue as many as $1 billion in CMBS bonds. [Bloomberg]
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Posts Tagged ‘cantor fitzgerald’
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Wells Fargo is shoring up its staffers on the commercial mortgage-backed securities front in anticipation of a resurgence of the market, bank representatives told Bloomberg news. The CMBS market was previously led by Wachovia, which was acquired by Wells Fargo in 2008 for $12.7 billion after it reported more than $2.1 billion in CMBS-related losses in 2007 and 2008. Among Wachovia’s soured deals was the $7.9 billion bond that included financing for the 2006 purchased of Stuyvesant Town and Peter Cooper Village — the largest CMBS deal in history. The buyers handed over the keys to the complex earlier this year after defaulting on their mortgage. But that’s not deterring Wells Fargo, which has added more than 20 bankers and support employees over the past three months. The new staffers are helping to increase loan originations and bundle them into CMBS, said Ed Blakely, the bank’s head of commercial mortgage lending and servicing. And Wells Fargo isn’t alone. Australian investment bank Macquerie Group announced last month that it is targeting the U.S. CMBS market with a new group, and New York-based Cantor Fitzgerald said earlier this month that it plans to originate and securitize $5 billion in loans over the course of the next year. [Bloomberg]
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Anthony Orso
Cantor Fitzgerald said it launched a new real estate lending venture with Los Angeles-based CIM Group, planning
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Boutique investment banks are expanding or popping up anew to fill a void in capital created by the real estate crash that left property owners and investors without many options for the impending $1.5 trillion in real estate loans expected to mature over the next five years. Firms like Moelis, Cantor Fitzgerald and Broadpoint Gleacher Securities Group are carving out a niche in helping their clients find a way out of bad debt by restructuring loans, finding capital and selling off assets. Newcomers to the market say their lack of “baggage” of the kind plaguing big institutions like Credit Suisse and others who were intimately involved in subprime lending, coupled with their small size, will prove advantageous. Many of the boutique firms are staffed with ex-Lehmanites, former Wachovia bankers, or other refugees of past main players, though, and these new firms are quickly expanding. Moelis has hired 100 new staffers over the past year, many of whom will help with its new real estate services, and brokerage CB Richard Ellis recently expanded its investment banking business, based in London, to America. [Crain’s]
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After weathering the residential real estate storm, banks will face a brutal battering of commercial loan losses, according to a group of financial industry insiders who spoke at the Reuters Global Finance Summit. Howard Lutnick, CEO of Cantor Fitzgerald, said that the overpricing of commercial properties led to a crisis in the market. “The commercial real estate business still has not been marked down. It’s not been marked to market,” Lutnick said. “The economy can’t, in my opinion, grow fast enough that the tenants are going to go out and start hiring and growing and building and take up all these rents at $60 a foot.” The consensus among the panel was that, as U.S. banks held $1.65 trillion in commercial real estate loans as of Nov. 4, they’ve done little to solve the problem, choosing instead to postpone the inevitable. “When you’re in the eye of the hurricane, it sure feels good until you look at the TV screen and then you say, ‘look, the hurricane is all around you,’” Lutnick said.
