WASHINGTON, D.C. — Six U.S. banks failed in September, raising the total to 74 for the year and putting the banking sector on a pace for nearly 100 failures for all of 2011, according to the Federal Deposit Insurance Corp. and New York-based Trepp LLC. The failed banks include First International Bank in Texas, Citizens Bank of Northern California, Bank of the Commonwealth in Virginia, First National Bank of Florida, CreekSide Bank in Georgia, and Patriot Bank of Georgia (see below). Georgia has the highest count of bank failures, with 19 year-to-date in 2011 and 71 since the current cycle began in late 2007. Florida ranks second for bank failures, with 11 year-to-date in 2011 and 56 in the current cycle. The closure in Texas was the first since early 2010. For a state with a large number of banks, Texas has had relatively few failures — nine in the current cycle. Commercial real estate exposure was the main driver behind problem loans for the banks that failed in September. Commercial real estate loans accounted for $365 million, or 82 percent, of the total $445 million in nonperforming loans at the failed banks. Commercial mortgages made up $199 million (45 …
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CHATHAM, N.J. — Woodmont Industrial Partners (WI Partners), has formed as a new venture focused on acquiring industrial properties in select, high-barrier-to-entry and globally oriented seaport and inland port markets in the Eastern United States. The venture is an affiliate of real estate development and management firm Woodmont Properties, led by Managing Principal Eugene Preston, and Principals Eric Witmondt and Marc Lebovitz. Collectively, the principals of WI Partners have acquired or developed more than 14 million square feet, including properties in such states as New Jersey, Pennsylvania, Florida, California and Texas. Preston, who is responsible for sourcing opportunities and managing the WI Partners’ portfolio, previously held the position of senior vice president at ProLogis, where he directed development and acquisition activities for the company’s Northeastern region. Witmondt is currently chief executive officer for Woodmont Properties, and David Trager, chief investment officer for Woodmont Properties, holds the same position with WI Partners. Lebovitz is focused on delivering strategic and operational expertise for WI Partners and is president of Romark Logistics, which specializes in regional, national and international supply chain management solutions. “The principals of Woodmont Industrial Partners are uniquely qualified among their peers because they bring together highly complimentary skill sets …
WASHINGTON, D.C. — Job growth is the straw that stirs the drink for the commercial real estate industry, but the addition of 103,000 payroll jobs to the U.S. economy in September is hardly cause for celebration, say real estate economists. What’s more, employers are leasing office space at a cautious pace, observes Victor Calanog, director of research for New York-based Reis. Net absorption of office space nationally slowed from 3.2 million square feet in July to 2.1 million square feet in August and 1 million square feet in September, “a somewhat worrying downward trend,” points out Calanog. In its release of the September jobs report last Friday, the Bureau of Labor Statistics revised the payroll figures upward for July (+42,000) and August (+57,000) by a total of 99,000, bolstering the argument that the economy is slowly improving and not headed back into recession (see chart below). The U.S. economy has now added nearly 1.1 million new jobs year-to-date through September, up from 940,000 for all of 2010, according to Reis. “While the September report is good news compared with last month’s preliminary report that zero jobs were created in August, the labor market is still not growing fast enough to …
NEW YORK CITY AND CHATTANOOGA, TENN. — TIAA-CREF and CBL & Associates Properties, Inc. (NYSE: CBL), have closed their $1.09 billion real estate joint venture to invest in market dominant shopping malls, originally announced in May 2011. As part of the joint venture, TIAA-CREF has completed its investment in four of CBL’s market dominant shopping malls: Oak Park Mall in Kansas City, Kan.; West County Center in St. Louis; CoolSprings Galleria in Nashville, Tenn.; and Pearland Town Center in Pearland, Texas. Eastdil Secured acted as CBL’s exclusive financial advisor in arranging this joint venture. “With the ongoing disconnect in public versus private market valuations, we believe this transaction provides us with the most advantageous source of monetizing the equity value in our portfolio,” said Stephen Lebovitz, CBL’s president & chief executive officer, in a statement. “TIAA-CREF’s investment strengthens our balance sheet and partners us with a well-capitalized institution to pursue new opportunities.” Specifically, CBL reduced outstanding debt balances by approximately $486 million through TIAA-CREF’s assumption of approximately $267 million of property-specific debt and cash proceeds of approximately $219 million. TIAA-CREF received a 50 percent pari passu interest in the three enclosed malls, including Oak Park Mall, West County Center and …
ATLANTA — Daniel Corporation and Selig Enterprises Inc. are partnering with lender Northwestern Mutual to develop the fourth high-rise tower of 12th & Midtown, a $1 billion mixed-use development in Atlanta. Appropriately named for its address, “77 12th Street,” the new apartment tower will rise 23 stories on the corner of 12th Street and Crescent Avenue. The property will include 330 luxury one-bedroom and two-bedroom apartments, as well as a 20,000-square-foot retail component, expected to feature a collection of restaurants and sidewalk cafes, as well as pedestrian and pet-friendly streetscapes. Projected rents for the sustainably-oriented apartments start at $1,500 for one-bedroom units and $2,250 for two-bedroom units. Features will be similar to those found in the 1010 Midtown high-rise condominiums, including 10-foot ceilings, granite and stone kitchens and baths, stainless steel appliances, and full-size washers and dryers. Amenities on the top level include a 5,000-square-foot club room, game room and sky deck adjacent to a 4,000-square-foot fitness center that overlooks the Midtown and Atlanta skylines. A private terrace level with a zero entry salt water pool, as well as multiple grilling and outdoor function areas, includes spaces for large gatherings or more private retreats. The community will offer 24-hour concierge …
The combination of a reeling stock market, weak consumer confidence, and an escalating European debt crisis has led to growing concerns about the possibility of a double-dip recession. Not so fast, says Ethan Penner, a self-described contrarian. The president and founder of CBRE Capital Partners is convinced that the deeply gloomy outlook for the U.S. economy held by many Americans means that now is the ideal time to turn bullish. “I would say there probably has never been a Depression or a market crash when everyone is bearish. Think about the last big crash we had, which was 2007 and 2008. Everyone was incredibly bullish, incredibly optimistic.” The comments from Penner came during his keynote address delivered Sept. 27 in Atlanta as part of a commercial real estate finance conference hosted jointly by law firm Morris, Manning & Martin and France Media. “I’m known for being an inveterate bear, but this pervasive bearishness is causing me to reconsider that. The next surprise is more likely to be on the upside than the downside,” Penner told attendees. Still, the global macro economic climate and financial system are in extremely bad shape, Penner acknowledged. To help prop up the weak housing market, …
NEW YORK CITY — KPMG has released the results of its 2011 commercial real estate industry pulse survey, which indicated that executives in the United States expect to see improvements in revenue and employment next year, but the majority predict a full economic recovery is years away. Reflecting these general sentiments, 64 percent of those executives surveyed said their company's current revenue is higher than last year, and 75 percent anticipate that their revenue will be higher still 1 year from now. These companies also are beginning to add employees, and 53 percent said they plan to add personnel in the next year, compared to 13 percent seeing a decrease. However, they are not predicting that hiring on the whole will significantly pick up anytime soon. When asked when they expect their company's U.S. headcount to return to pre-recession levels, 27 percent said the end of 2013, 17 percent said the end of 2014 or later, and 11 percent said it would never return to pre-recession levels. In addition, 57 percent do not expect a full economic recovery until the end of 2013 or later. “Although real estate executives see things moving in the right direction, they believe it's going …
SEATTLE — Colliers International released its 2011 Global Investor Sentiment Survey this week, which breaks down the international commercial real market and its overall gauge of the state of investment opportunities globally. Overall, Colliers’ survey shows that buyers are “most likely” to expand their portfolios in next 6 months, but lack of supply and financing, as well as economic and political uncertainty, make them reluctant. “Far more investors are looking at expanding their portfolios compared to last year,” said James W. Horne, executive sponsor of Colliers' Global Investor Sentiment Survey. “However, talk of a double-dip recession continues to occur. Toward the end of 2010, most economic commentary was becoming more confident; however, this is not the case now.” Global Outlook On a global basis, the majority of investors surveyed believe tenant demand is rising, availability and vacancy are falling, and headline rents are on the rise. According to Colliers, in the first half of 2011, approximately 9,250 investment properties worth US$350 billion changed hands, an increase of 30 percent in volume over the same period in 2010. The U.S. was the most significant driver of this global figure, with a 124 percent increase in its investment transaction volume. Internationally, 70.7 …
PHILADELPHIA AND RESTON, VA. — Grosvenor has reported two items of investment news, forming a $600 million partnership to invest in healthcare, as well as purchasing a 250,000-plus-square-foot office building outside Washington, D.C., in an unrelated transaction. Notably, Grosvenor Investment Management US, Inc. (GIM), Grosvenor's real estate investment management platform in North America, has formed an investment partnership with Kuwait Finance House (KFH) to invest in up to $600 million of U.S. healthcare-related real estate. Resulting from the agreement, the partnership will target the acquisition and development of private-pay senior living facilities and medical office buildings in the U.S. during the next 7 years. These investments will result from the formation of equity joint ventures with local and regional operating and development partners. GIM will oversee all investment activities, including sourcing, underwriting, structuring, financing, closing, asset managing, and exiting the partnership’s investments, all of which will comply with Shari’ah (Islamic law). “The formation of this partnership reflects the strength of the U.S. healthcare sector, which is expected to benefit from attractive demand/supply characteristics, driven by favorable demographic trends and limited supply growth,” said Eric Cannon, Director of Acquisitions, GIM. “During the recent economic downturn, the sector’s cash flows have proven …
NEW YORK CITY — HSBC Alternative Investments, Ltd. (HAIL) and Edge Fund Advisors (EDGE) have purchased the remaining 51 percent ownership interest in the 907,000-square-foot 1540 Broadway, a 44-story office building located in Times Square in Manhattan, from CB Richard Ellis Investors on behalf of HSBC “Club Programme.” Additionally, HAIL and EDGE closed on the refinance of the property with Metropolitan Life Insurance Company. “Our purchase of the 100 percent ownership interest in 1540 Broadway represents HAIL and EDGE’s further commitment to acquire trophy office properties in New York City on behalf of the HSBC ‘Club Programme,’ said Mark Keller, CEO of Edge Fund Advisors, in a statement. “The purchase of the remaining ownership interest in 1540 Broadway is a great compliment to our trophy office properties 1625 I Street and 1350 I Street in Washington, D.C., and demonstrates our commitment to acquire superior real estate investments on behalf of the HSBC ‘Club Programme.’” As REBusinessOnline previously reported (http://rebusinessonline.com/main.cfm?id=17&date=20101112®ion=Northeast), CBRE Strategic Partners Value 5 Fund acquired the property as a distressed asset in 2009, then repositioned the building and sold the minority interest in November 2010 as a way to realize a return on its investment. Keller said CBRE has …