From TreppWire: Preliminary Data Points to Large Jump in Loss Severities in August
Spoiler alert. We usually don’t do sneak previews, but the alarming number of loans resolved this month with big losses piqued our interest.
We’ve written about a number of them already this month: the 83% loss on the Westin O’Hare loan, the [...]
In 2008, Marion Moskowitz was very concerned. She and her husband, Dave, had recently purchased a 225,000 square foot former textile mill for $2 million and were in the process of converting it into multi-tenant use. At the time their project, Franklin Commons, had only four tenants, leasing a total of 20,000 square feet. Meanwhile, [...]
This report from today’s TreppWire on the CMBS market shows that for the first time ever a AAA rated tranche has been hit with a nonpayment of interest. You may recall that these big CRE mortgage pools are divided up into many tranches with different levels of risk for investors. Call [...]
Another commercial real estate workout gone bad is detailed here by Trepp. This 2 Rector Street deal is especially telling and it gives us a good idea of the CRE problem and how it has been papered over to avoid loan losses. Even after a loan modification in 2010, things went [...]
Real estate investors typically have longer investment time horizons than investors in publicly traded equities, bonds and funds. While it is possible to buy and sell a stock within a few hours, and typical to liquidate these investments within several months, real estate investments are typically held for a decade or more. Consequently, it makes [...]
This report today from Trepp give us a peek into one of the largest CMBS loans ever structured, a $2.6 billion loan that was funded across six big CMBS trusts. It lends truth to the old maxim that if you borrow large, the lenders are stuck with you. The loan was extended for five years [...]
This report on commercial mortgage backed securities came in today from Trepp, Inc. which follows this market. It measures delinquencies of commercial real estate loans that comprise the large mortgage pools that make up securitized mortgage investment trusts. It is a good measure of the overall health of the CRE market, [...]
This just came in from Trepp, a company that keeps track of CMBS (commercial real estate). Here is another Simon Properties deal that looks weak. There is still underlying rottenness in the CRE market, especially in retail.
Report: Tenant Issue Threatens to Sink Philadelphia Retail Loan
The sharp eyes of Lea Overby and Steven Romasko [...]
I want to share some updated thoughts here rather than in my trading blog because they tie into the broad theme that inadequate capital has been rebuilt following the “Great Recession” to allow a durable economic expansion in the U.S., and thus this sort of thinking makes it easy to accept the ECRI premise that unfortunately another [...]
Here is another commercial real estate credit report from Trepp on CMBS. This deal is off about 60% from its 2006 value. Never invest in a project that uses the words “Galleria” or “Centre” or “Pointe.” “Officentre”? Sounds more like “off center.”
Michigan Office Sees Value Shaved By More Than Half
The $86.2 million Galleria [...]
I want to present four links.
1. Commercial real estate is looking weak again. This has been a leading indicator of the stock market and interest rates in both directions for the several years I have been following it. I look most often at AAA.5 and AA.4. LINK
2. The SPY (ETF for the S&P [...]