Weekend Roundup

Commercial Real Estate Sales Jump ("WSJ")

Institutional Real Estate Investors Aim for Different Ways to Invest ("P&I")

Commercial Mortgages Ailing in February ("WSJ")

Distressed CRE Assets Jump 15% at Nation's Banks ("CoStar")

Risky CRE Lending Deadly for Banks ("CoStar")

As Commercial Real Estate Weakens, Moody’s Considers Action on Related CDOs ("HW")

Morgan Stanley’s Klopp May Expand Investing in Property Debt ("Bloomberg")

U.S. Hotels Report Mixed Signals This Week ("NREI")

"What Impact Will Expected Acquisitions By Large Landlords Have On Leasing?" ("Shopping Center Digest Blog")

Backlash Hits Calpers Property Deals ("WSJ")

What's Happening With REITs? ("BIC")

Larry Silverstein on 60 Minutes

New York developer Larry Silverstein was on 60 minutes this past Sunday discussing the re-construction of ground zero. He characterized it as "a national disgrace."

Watch CBS News Videos Online

Intrawest Debt To Be Restructured

That means no auction for the Whistler resort! According to The Wall Street Journal, Fortress has agreed to put in an additional $150 million equity to pay down the Intrawest debt:

The deal will allow Fortress to retain its entire stake in the troubled resort company that it acquired for $2.8 billion in 2006. But it comes at a steep cost. The New York-based private-equity firm will inject an additional $150 million of equity into the business to pay down debt. A new $1.2 billion loan package will extend debt maturities by two years but charge a higher rate of interest than the existing debt. The deal is now an agreement in principle, said the people familiar with the matter. A signed transaction mightn't be in place until April.

GGP's Tom Nolan Discusses Brookfield Proposal on CNBC

CNBC: Commercial Real Estate Bottoming?

Intrawest Auction Delayed, Vail Tops List of Bidders for Whistler

I don't know about you, but even with the NBC tape-delay coverage, I'm still enjoying the Vancouver Olympics. And now it appears that the Olympics won't be disrupted by the Intrawest public auction, which was scheduled for tomorrow. Bloomberg is reporting that creditors have given Intrawest an one-week extension for the auction. In the meantime, Colorado's Vail Resorts Inc. has emerged as the top bidder for the Whistler Blackcomb. According to The Globe And Mail:

Deep-pocketed Vail and a number of other bidders have made offers for the crown jewels in Intrawest's collection of eight resorts, but Fortress has turned down these pitches. Instead, the New York-based firm is attempting to strike a restructuring plan with creditors that maintains some degree of ownership in a chain it bought four years ago in a $2.8-billion (U.S.) leveraged buyout. An auction for Intrawest is scheduled for Friday in New York.

CNBC: More Commercial Real Estate Deals Ahead?

Weekend Roundup

Most Valuable REITs ("Forbes")

DeBoer: Panel Report Helpful in Lobbying Push ("GlobeSt.com")

Roundtable Survey: Sentiments of CRE Execs Are Better, But By No Means Good ("CoStar")

What a Zell Party it Was: At WASP-y Club, Mogul Zell Defiant in Dungarees ("New York Observer")

Zuckerman Is Said to Be Weighing Bid for Senate ("NYT")

Betting on Bad Debt Becoming a Growing Investment Play ("CoStar")

The Good News: More Retail Property Deals in 2010 as Loans Mature and Banks Recognize Losses ("CoStar")

Multifamily REIT CEOs Upbeat On Apt. Prospects Despite Bleak Fundamentals ("CoStar")

Prologis CEO on CNBC: Commercial Real Estate Shoe Already Dropped

Take that, Elizabeth Warren.

Congressional Oversight Panel (COP) Report on CRE

Here is the report. I hope someone digs through the massive 189-page report. I'm sure there's a lot of useful information in there. It's always interesting to read what non-real estate people have to say about the industry.

Brookfield Buys Debt on Tishman's DC Properties

Debtwire is reporting that Brookfield Properties is making a play on Tishman Speyer's properties in DC by executing a "loan to own" strategy. These properties are part of the $2.8 billion CarrAmerica DC portfolio that Tishman and its partners acquired from the Blackstone Group in 2006. The owners defaulted on the debt in August, 2009. From FT:

One of Tishman Speyer’s rivals, Brookfield Properties, is taking a page out of the distressed investing playbook and buying up debt from Tishman’s Washington DC properties in a loan-to-own gambit, four sources familiar with the matter told Debtwire.

Tishman pitched original holders of the USD 570m loan a restructuring in September that would have given lenders a 50% stake in the DC assets and let the sponsors keep the rest. A group of insurgent lenders rejected the deal in December but Brookfield took no part in those events, said the sources.

It remains unclear when the commercial real estate investment firm first bought into the debt but it has recently emerged as one of the largest holders, the sources all said. The commercial real estate investor raised USD 12bn of external capital for investment during 2009, with the intent to “acquire assets in the bottom portion of this market cycle,” according to its 3Q09 shareholder report.

Why I Can't Take MBA Seriously

So the Mortgage Bankers Association is saying that banks are increasing commercial real estate lending, and that loan originations on retail properties rose in the fourth quarter. That all sounds great, except that the information source is the Mortgage Bankers Association. These days it's just a little bit difficult for me to take the MBA seriously. This is the federal lobbying group that bought its fancy new 170,000 sf head office building in Washington DC at the top of the market in 2007 and defended its decision a year later when it had trouble paying the mortgage:

The group's leaders defend the transaction as prudent and, in the long run, wise. "Anytime is the best time to buy," said Kieran P. Quinn, chairman of the association. "Over a 10-year horizon, [the purchase] looks great."

Then we found out last week, MBA sold the building, 1331 L St. NW for $41.25 million at $234 psf to CoStar. How ironic and hypocritical! The building actually cost $90.6 million to construct. Breaking Ground says it best:

It's natural for any borrower to want to get out from under an underwater mortgage, except that the MBA isn't just any borrower: It is a massive federal lobbying organization on behalf of mortgage lenders whose CEO, John Courson, said eight weeks ago that homeowners considering walking away from their own loans ought to consider how defaults could hurt surrounding property values. "What about the message they will send to their family and their kids and their friends?" he asked.

Well, Mr. Courson, in selling a new building for 55 cents on the dollar, you have done the same thing for real estate in downtown D.C. Everyone else's property is now worth less thanks to your sale.

Good for CoStar for getting a solid deal. Now that's a company that actually understands real estate.

Link.

Real Estate and The Vancouver Winter Olympics

The Vancouver 2010 Winter Olympics is getting so little press this year that unless you watch The Colbert Report, you probably wouldn't know the game is slated to open this Friday, February 12.

Whether you are an Olympics Junkie or not, there is a high-profile real estate deal associated with this year's Vancouver game. Intrawest, the owner and operator of the Olympic host resort Whistler Blackcomb is scrambling to avoid foreclosure.

One of the largest ski and snowboard resort operators in US and Canada, Intrawest, was taken private by private equity firm Fortress Investment Group in 2006. The $2.8 billion transaction was financed by $1.7 billion debt. Fortress missed two extensions on a $524 million debt payment and the debt was in default and declared due on December 24, 2009. Since then, the creditors, led by Lehman Bros. and hedge fund Davidson Kempner gave Intrawest legal notice that they are commencing the foreclosure process. The creditors took out ads in Wall Street Journal, New York Times and The Global and Mail for a public auction of their membership interests in the resort holding company . The auction is scheduled for February 19, right in the middle of the Olympic game.

Potential bidders will be able to enjoy watching alpine skiing while conducting due diligence.

Link.

Weekend Roundup

That Commercial Real Estate Shoe ("Forbes")

Redirecting My Rating Agency Rage ("Atlantic Monthly")

International investors look for cheap U.S. real estate trophies ("P&I")

FDIC Eyes Plan to Securitize Seized Assets ("GlobeSt.com")

RREEF's Global Real Estate Insights 2010 ("IREI")

CoStar makes D.C. move official, buys 1331 L St. NW ("WBJ")

Flush REITs Have Loads of Cash, Little to Spend It On ("WSJ")

REITs: Better but Not All-Clear ("WSJ")

Two-timing distressed funds ("TRD")

All Those Little Stuyvesant Towns ("NYT")

Threatened Legal Action Over NYC Rent Control Likely to Roil CMBS Market ("CoStar")

Macklowe Selling Three N.Y. Towers ("WSJ")

D.C. trophy office rents fall 11.7% ("WBJ")

Multifamily Lenders Share Their Biggest Concerns For The Road Ahead ("NREI")

Battered Industrial Property Sector Poised to Resume Growth ("CoStar")

Hotel Delinquencies Skyrocket as Commercial Real Estate Feels Delayed Punch of Recession ("NREI")