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Your Chance To Buy 26,135 Sq. Feet Of "Lipstick" History, And In Other News CRE Insiders "Not At All "Dumping Shares
Manhattan Class A office transactions are finally coming to the fore. In May 2007, or the absolute peak of the CRE bubble, LA-based Metropolitan Real Estate Investors bought 885 Third Avenue (aka the Lipstick Building) for $607 million from Tishman Speyer. Alongside this ridiculous investment, SL Green and Gramcery Capital Corp (GKK) bought the underlying land (with Goldman generously providing a $268 million first mortgage IO loan at 6.26%). Recently Gramercy has realized it has had enough of waiting for Bernanke to reflate Credit Bubble 2.0 and wants out: it is selling 45% of its the fee interest in the 26,135 sq. land parcel. So any willing lenders to buy into the equity of this stratospherically priced monstrosity (and be primed by none other than Viceroy of the World, Goldman Sachs) should immediately contact the good folks at GKK.
And now that Bernie Madoff has vacated the 17th floor, which will likely be empty in perpetuity, you may lose some potential revenue streams and thus be a little short of that goal seeked 9.9% IRR, but the intangible benefits of knowing the world's biggest certified Ponzi (until the Fed is audited of course) once walked 100 feet above the land you own.
In other news, the Commercial Real Estate market is doing very well... Oh, my mistake, was just reading the latest Cohen & Steers market update. For a more realistic observation, one may want to consider that Boston Properties Mort Zuckerman just filed to sell 1 million shares of BXP for a value of $51 million. From Bloomberg:
Zuckerman is exercising stock options and making the sale to diversify his assets, said Arista Joyner, a Boston Properties spokeswoman. He remains the largest individual shareholder in the Boston-based company he founded. Chief Executive Officer Edward Linde filed to sell 300,000 shares, filings show.
Boston Properties hit a seven-month high this week and the stock is up 68 percent since March 5, when it traded at $31.49.
The company, owner of New York’s General Motors Building and Citigroup Center, raised $842 million in a secondary stock offering last month, joining REITs in selling equity and debt to pay existing loans.
But wait, lest you think there might be an ulterior motive here:
Zuckerman is “not calling another high” in the stock, said Arista Joyner, a BXP spokesman. “That is not his reason at all” for selling.
In other news, Joyner will likely soon anounce that BXP has commenced the construction of a bridge between New Mexico and Arizona and is actively soliciting investor interest.
So readers, please, PLEASE, keep buying those REITs and other gangrenous, toxic, nuclear fallout - how else will the CEOs of the companies who realize that the bottom of the market is about to fall off any minute, be able to sell their shares (Merrill upgrades obviously excluded)?
hat tip Ed
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Going to need some more TALF bonds:
http://www.costar.com/News/Article.aspx?id=AD80BFABB4E2FE3A38DDF33D61BA276C&ref=100&iid=142&cid=E94DEA095499FD6EA36E7CD4C334FA77
Wonder which REIT has the most USPS lease exposure?
Or more ponzi AIG insurance:
http://www.nytimes.com/2009/07/31/business/31aig.html
"An organization like this one relies on constant, ever-growing premium volume, so it can cover and pay for the deficits," said W. O. Myrick, a retired chief insurance examiner for Louisiana.
If A.I.G.'s incoming premiums shrink, he warned, "the whole thing's going to collapse in on itself."
who would have thought shorting AIG would be as easy as 'switching to Allstate' ?
We're in good hands baby!
THIS is a great look at what the AIG insurance/swap structure looks like.
http://us1.institutionalriskanalytics.com/pub/Catalog.asp
Great! I can get negative cash flow every year until I can sell it to another sucker at a higher price. What a deal!!
2007 is back and in full effect
BARI ia small bank in Rhode Island which i randomly came across 2 years ago, and it hasn't really budged I guess no one really follows this bank b/c it's so small, but I looked at recent 10q out of curiousity. Here's what I found:
Just reading these paragraphs details what's going on in economy. Also, hilariously, they're offsetting their losses on mortgages buy increasing commercial loans! Anyways, this bank could go bust and/or have some material losses going forward, if commercial real estate continues to go south, as I suspect it will.
Here's some excerpts from recent 10Q:
Total assets increased by $19.9 million since December 31, 2008. Total loans and leases increased by $27.6 million during the first three months of 2009, with increases in commercial loans and leases and consumer and other loans up $28.2 million, or 4.3%, and $8.2 million, or 4.0%, respectively. Slightly offsetting this increase was a decrease in the residential mortgage loan portfolio of $8.9 million, or 4.2%. Available for sale securities increased $30.3 million, or 9.3%, since year-end. The Bank’s transaction accounts increased by $17.5 million, or 2.8%, since year-end. Within this increase, savings accounts increased by $15.4 million, or 4.0%, and NOW accounts increased by $6.3 million, or 11.1%, offset by a decrease in demand deposit accounts of $6.8 million, or 3.9%. Borrowings increased by $502,000, or 0.2%. Shareholders’ equity as a percentage of total assets was 9.7% at March 31, 2009 and 9.8% at December 31, 2008.
A bit futher down offers more hilarity:The Company’s financial position at March 31, 2009 as compared to March 31, 2008 reflects net growth of $80.4 million in total loans and leases. This increase reflects the continuing conversion of the balance sheet to a more commercial profile with increases in commercial loans and leases of $109.7 million, or 19.0%. Consumer loans increased $3.4 million, or 1.6%, from the prior year quarter-end. The residential mortgage portfolio declined $32.7 million, or 13.8%, from March 31, 2008. Also, available for sale securities at March 31, 2009 increased by $14.2 million, or 4.1%. Total deposits have increased $17.6 million, or 1.7%, since the prior year quarter-end, with growth centered in certificate of deposit accounts of $39.9 million, NOW accounts of $1.3 million and money market accounts of $884,000. These increases were offset by decreases in savings accounts of $14.3 million and demand deposit accounts of $10.2 million. Borrowings have decreased since March 31, 2008 by $3.4 million.
"Additionally, in the first three months of 2009, the Company sold $1.9 million of mortgage-backed securities generating gains of $61,000." That's 3.2%... Hey, at least they made money on that.I like this: "The Company owns two collateralized debt obligations ("CDOs") backed by pools of trust preferred securities. The total unrealized loss on these securities as of March 31, 2009 was $2.0 million. During the third quarter of 2008, one of the CDOs was determined to have experienced an adverse change in cash flows and to be other-than-temporarily impaired" In other words... the opposite of temprorary is a long term loss, might as well 'realize' it.
To COnclude: "Total loans and leases as of March 31, 2009 are comprised of three broad categories: commercial loans and leases that aggregate $686.7 million, or 62.1% of the portfolio; residential mortgages that aggregate $203.8 million, or 18.4% of the portfolio; and consumer and other loans that aggregate $214.8 million, or 19.4% of the portfolio."
I feel a stock price melt up coming on! This is Feel Good Market Entertainment for the whole family, I mean country.
Nail in the coffin?
1,200 Rhode.Island. businesses face closure over sales tax
http://www.projo.com/news/content/BUSINESS_TAX_PROBLEM_07-30-09_HSF7JHN_v29.3c1d325.html
http://1.bp.blogspot.com/_aGvk7g9hxtg/Sm87ip2ZpYI/AAAAAAAAAEo/TfN8jLnnMY... Commercial Real Estate Defaults Up Over 500% YoY
Get long .. or get left behind .. Irrational exuberance is back in play ..
Well fine. But, once again, will someone please explain to me why ZeroHedge keeps predicting disaster, when ECRI keeps predicting economic expansion? See below.
NEW YORK (Reuters) - A measure of future U.S. economic growth climbed higher in the latest week while its yearly growth rate hit a fresh five-year high, signaling a stronger recovery than originally forecast, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 119.6 in the week ended July 24 from a downwardly revised 118.3 the previous week, which was originally reported at 118.4.
The index's annualized growth rate continued to soar, reaching a new five-year high of 8.8 percent from 7.7 percent the prior week.
It was the highest yearly growth reading since the week to October 3, 2008 when it was 8.9 percent.
ECRI Managing Director Lakshman Achuthan has said the recession is already beginning to wane, and that increased stimulus from Washington is not necessary for economic growth.
"Not only is the U.S. recession set to end this summer, but the recovery is apt to be stronger than many expect."
The weekly index rose in the latest week due to firmer housing activity, said Achuthan.
I hope to my own personal GOD that you arent accountable for managing anyone else's money.
Well hell, this STILL isn't the response I'm looking for. Specifically, someone, tell me what is wrong with their
1. methodology
2. data
This outfit gets a hell of a lot more coverage than Zero, so if ECRI is bogus, it's certainly worth setting out in DETAIL why this is so.
"The weekly index rose in the latest week due to firmer housing activity"
Worst June New Home Sales Since 1982
http://www.ritholtz.com/blog/2009/07/more-charts-on-new-home-sales/
You must be new here... This isn't CNBC... ZH does not spread false numbers and paid for opinions for the purpose of preaching false hope and optimism to get illinformed people to throw their money in a black hole.. (aaand.. its gone!)
lol ... love the south park line ..
/facepalm
...which is why so many people are suddenly allergic to peanuts. The peanuts are emitting toxins as an evolutionary defense mechanism. They're tired of being eaten, and now they're fighting back.
Fundamentals will matter "when they matter" .. right now they don't .. trade the tape ..
There's dozens of such crystal-ball gazing organizations. I've never heard of them apart from a couple of press release-sourced articles - just because they're on Reuters with claims of earlier 'good calls' doesn't mean much of anything.
ZH is in danger of embarrassing itself. What is wrong with you guys? Can't you see that everything is just great?
OK.. Then YOU pick up the aforementioned sell offering on BXP.
Wait! Hold on! Just a few more swift whacks to my head with my orange ball peen hammer. Yes, I see it! Everything really is just great!
Man I have to do this more often!
i think he was being sarcastic
Wow .. we are setting up for a major end-of-day short kill here .. look out boyz..
my shorts are still in a bloody heap from the last time I shorted CRE...
SRS on sale right now at a tad over 15.
Just kidding. I took my beating with that one. I would love to short this market but just don't have the balls to do it again.
Besides, S&P to 1050 - 1100 - Steve Grasso said so today. :-)
and girls
Shorts? There are no shorts left to squeeze..
Apparently the remaining shorts are all congregated in BAC .. yowsers.
I was on the cover of Cosmo once wearing lipstick.
The SF market provides a good comp.
Sterling and Hines bought 333 Bush St. in 2007 for $281 million, about $520 a square foot. The last significant office building to sell in San Francisco, 250 Montgomery St., sold for $173 a square foot, 57 percent less than it traded for in 2006.
http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2009/07/20/daily100.html
ECRI is confusing their so called "recovery" of the ECONOMY with the HFT jet-boosted FINANCIAL casino known as the market. That is the same ploy the FED and the administration are trying to hypnotize the whole world with. ECONOMY and FINANCIAL MARKETS are two different things. See "The End of the End of the Recession", on this site for insights as to how the actual economy is doing.
The ECRI leading economic indicators is based largely on market indicators such as stock prices, and credit spreads. it is somewhat circular in its logic. also it has been tweaked significantly a half a dozen times in the last decade. ritholtz covers this in his blog.
Hey CNBC guy errrr ECRI guy. How many times you going to post the same thing. You want attention take a $100 to the nearest gentleman's club.
No need for complex algorithims and an HP ProLiant DL785 on this one. Whatever the "Lipstick Building" sold for in 2007, simply divide by half. Done.
I would turn this building into a megawhorehouse, a 600,000 sq. ft of pleasure.
Office function is such a misuse of the building with a beautiful name.