The Real Deal

Proverbial "next shoe" has already dropped for commercial real estate, panelists say

November 20, 2009 11:00AM

Commercial real estate isn't waiting for the next shoe to drop, because the crisis is already here, said Diana Olick on a recent CNBC panel. Participants discussed the driving forces behind the commercial fallout, including a lack of available credit, rising delinquencies and vacancies, and unemployment. Marisa Manley, president of Commercial Tenants Real Estate Representation, said there are many opportunities for tenants amid the gloomy numbers. Olick said the commercial real estate market is going to take at least two to three years to recover, since it is slower moving than residential real estate.

Highwoods Properties purchases the 4200 Cypress building near Interstate 275 ... and more

November 20, 2009 10:00AM

1. Highwoods Properties purchases the 4200 Cypress building near Interstate 275 [GlobeSt]
2. Urban league sponsoring free mortgage clinic [Sun-Sentinel]
3. Antique furniture showroom to occupy empty West Palm lot [Palm Beach Post]
4. Florida topped the nation in the percent of home loans in foreclosure for the third quarter [Palm Beach Post]
5. Comcast of Greater Florida/Georgia leases 106,000-square-feet at Deerwood North [GlobeSt]
6. Palm Beach County commissioners will weigh moving the county's urban service boundary eastward. [Palm Beach Post]
7. Florida has been slow to use federal funds for Chinese drywall repairs [Sun-Sentinel]
8. Why no one is regulating Fannie Mae and Freddie Mac [WSJ]
9. Donald Trump to sell nutritional product line [Yahoo]
10. Roubini predicts U-shaped economic recovery [Business Insider]
11. Why it is still a terrible time to buy real estate [New Yorker via Patrick.net]
12. Cheaper home prices motivating buyers more than the tax credit is [US News]
13. Fed may not increase interest rates until 2012 [Bloomberg]
14. Barbara Corcoran tweets that's she's buying AOL stock [Business Insider]
15. Housing numbers this week signal still-elusive recovery period [Bloomberg]

Biggest price cut of the day

November 19, 2009 06:30PM

4020 Hardie Avenue

The South Florida home to see the biggest price cut today is a four-bedroom, four-bathroom house in Miami at 4020 Hardie Avenue, according to data from Condo Vultures Realty. The $1.1 million Miami-Dade County home saw a $455,000, or 29 percent, price cut. It was originally listed for $1.7 million when it first hit the market in August. The home sits on a 16,497-square-foot lot that includes a lagoon-style heated pool. Christopher Infante of Coldwell Banker Residential has the listing. (Condo Vultures data includes condos and single-family home listings in the main metropolitan areas of Miami, Fort Lauderdale, West Palm Beach and Key West that are priced at $1 million and above, and that include photographs. Listings are taken from the South Florida MLS.) TRD

Protestors say few local contractors have been hired for new Marlins Stadium project

November 19, 2009 05:45PM

Hundreds of construction workers and contractors staged a protest Tuesday outside the site of the new Florida Marlins stadium, which recently broke ground in Miami's Little Havana neighborhood, the Miami Herald reported. The stadium was once welcomed as a beacon of hope for the area's small businesses and contractors who are already short on jobs, but protestors said the Marlins were not hiring enough local firms for the project. The team said they're not only complying with the government's requirements, but are also exceeding them in terms of local firms' participation. The stadium is on budget and is slated to open in 2012 as planned, a Marlins representative said. Tags: little havana marlins marlins stadium

Palm Beach commissioners abandon plans for traditional landfill

November 19, 2009 05:00PM

Palm Beach County Commissioner Karen Marcus

Palm Beach County commissioners decided yesterday to build a waste-to-energy plant which will eliminate the need for a new western landfill, though the Solid Waste Authority has already sold $70 million in bonds to buy land and build a new landfill. Plans to purchase space west of 20-Mile Bend for a new landfill were abandoned last month, and commissioners had been considering swapping land the county already owns for another plot that was slated for use in Everglades restoration. County Commissioner Karen Marcus said while she hopes to acquire the land for a mass-burn facility, there is no longer a pressing need to finalize the deal, since plans for the new plant, which will cost between $600 million and $700 million, will buy time. [Sun-Sentinel]
Tags: 20-mile bend karen marcus solid waste authority

Sternlicht says he’s focused on buying debt in commercial bust

November 19, 2009 04:00PM

While it's bad enough that the boom days of commercial real estate are over, Barry Sternlicht argues that investors are stuck with their tail between their legs in the wake of the market crash. The Starwood Capital CEO talked with CNBC's Maria Bartiromo about navigating the market downturn, saying that investors today are more conservative -- and sheepish -- than they were just a few years ago. "People are doing things today because they're a little embarrassed about what they did before, so they need money to restructure," Sternlicht said. But Starwood could be in a position to help save face. "We're focused on lending money… and we're buying a lot of debt," Sternlicht said. Tags: barry sternlicht starwood capital debt maria bartiromo

General Growth Properties expected to exit bankruptcy by 2010

November 19, 2009 02:45PM

Mizner Park in Boca Raton, a General Growth Properties retail holding

General Growth Properties, the second-largest mall owner in the U.S., which operates Boca Raton's Mizner Park mall, has reached a deal with its lenders to extend loans, a move that will allow it to exit bankruptcy by 2010. Representatives from 70 of General Growth's loans, some of which exceeded $1 billion in value, agreed to extensions averaging six years. The Chicago-based company's financial woes, marking the biggest real estate failure in U.S. history, according to a report from Reuters, have underscored the nationwide retail crisis, as vacancies in the retail real estate sector have continued to mount as the holiday season approaches. [Reuters] Tags: general growth properties mizner park

Obama weighing risks of TARP extension

November 19, 2009 02:00PM

President Obama

The Obama administration may soon announce an extension program for the Troubled Assets Relief Program, according to government sources, and is hoping to garner support for the controversial program by using leftover funds from the last bailout to pay down the national debt, the Washington Post reported. No concrete decision has been made regarding the extension, sources said, as the administration weighs the risks of prolonging the program. One key problem could be stopping lawmakers from tapping the leftover funds -- which would be earmarked for debt reduction under the extension plan -- for infrastructure and other projects. With national unemployment at its highest level in 26 years, many members of congress are looking for ways to use unspent bailout money for programs to aid the job market, according to Rep. John Larson. "We want to look at how Wall Street can refund Main Street," Larson said. [Washington Post] Tags: john larson obama talf troubled asset relief fund

Industrial properties getting snapped up by users, not investors

November 19, 2009 01:00PM

George Bermudez, executive vice president of U.S. Century Bank

By Mike Seemuth

Sales of South Florida warehouses and other types of industrial property have been small in size and scarce in number in 2009, and the market will remain weak well into next year if industrial vacancy rates keep rising. Successful bidders for South Florida industrial properties often are companies that intend to occupy the space. Investors hoping to profit from an eventual upturn are having a harder time financing industrial property, sources said. "About the only purchaser who can get a loan on a building is a user. If you're an investor, forget it," said real estate investor David Paladino, president of National Land Company in Lake Worth. One of National Land Company's biggest property disposals in the last 12 months was the $4.95 million sale of a self-storage building in Riviera Beach. The new owner is the occupant and operator of the 77,800-square-foot building, which had leased the property before deciding to exercise an option to purchase it. Paladino said many bankers doubt the prospects of investors who want to buy and lease industrial buildings because "if General Motors can go broke, anybody can." More Tags: colliers david paladino easton group edward easton george bermudez graebel/south florida movers horn capital realty industrial jonathan horn national land company u.s. century bank

Mortgage delinquencies hit record-breaking levels again, MBA data shows

November 19, 2009 12:00PM

Delinquencies on residential loans hit record-breaking levels in the third quarter this year, according to the Mortgage Bankers Association. The delinquency for mortgages on U.S. residential properties with one-to-four units hit 9.64 percent in the quarter, according to the MBA's seasonally adjusted data, released today. The figure is 265 basis points up from the same time period last year and up 40 points from the second quarter this year. The record had been set last quarter, when the delinquency rate was at 8.86 percent, but MBA experts said that prime and FHA loans, coupled with continued job losses nationwide, spurred delinquencies. "Despite the recession ending in mid-summer, the decline in mortgage performance continues," Jay Brinkmann, chief economist with MBA, said. "Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP." TRD Tags: delinquencies home loans mba mortgage bankers association

National market report

Commercial and residential real estate news briefs from the most active U.S. markets November 19, 2009 11:45AM

The Las Vegas strip at night

By Amy Tennery

From the November New York issue: While Las Vegas may be best known for its nightlife, casinos and booming tourism industry, some financial experts are calling for more-diverse industry in the area, pointing to rising hotel vacancies and home foreclosures. As the Las Vegas Sun reported, the city is home to the largest foreclosed commercial property in the U.S. and has the highest home-foreclosure rate of any large city in the country. University of Nevada, Las Vegas, economist Keith Schwer said that Las Vegas' financial decline is similar to that of Detroit, largely because the two cities are each dependent on one specific industry. Unlike the auto manufacturing industry, however, it seems unlikely that casinos will get a federal bailout. more Tags: national market report