Daily News – November 3, 2009

Here are the news stories you might find interesting today regarding commercial real estate and business:

Email me for the pdf attachment of the "Policy Statement on Prudent Commercial Real Estate Loan Workouts." It is very interesting how the banks have to analyze their potential commercial real estate loan losses.

Email me if you would like a pdf attachment of the "October 2009 Realpoint Research Delinquency Report." From the article, "Such delinquent unpaid balance is up an astounding 583% from one-year ago (when only $4.64 billion of delinquent balance was reported for September 2008), and is now over 14 times the low point of $2.21 billion in March 2007."

Banks Get New Rules on Property

Federal bank regulators issued guidelines allowing banks to keep loans on their books as "performing" even if the value of the underlying properties have fallen below the loan amount.

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Opus West Sells Scottsdale Multifamily in Distress Sale

Bankrupt developer Opus West sold McDowell Village in Scottsdale, AZ, to West Development Inc. for $24 million, or about $122,000 per unit. The 197-unit, 212,709-square-foot senior apartment community at 8300 E. McDowell Road was built in 2005 in the...

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ULI Real Estate Business Barometer / Commercial/Multifamily Investment Property

Office vacancy rates stood at 19.4 percent in the third quarter of 2009, up from 18.6 percent in the second quarter and 340 basis points above the same quarter a year ago, according to Property & Portfolio Research (the source of all data presented in this section). Completions in the third quarter of 2009 were stable as a percentage of inventory, remaining at 0.3 percent, but below the 0.7 percent historic average. The absorption of -34.5 million square feet was just slightly better than the -39.4 million square feet absorbed in the second quarter of 2009. Rents fell in the third quarter of 2009 and are off 8.7 percent from the same quarter a year ago.

Retail vacancy rates stood at 18.6 percent in the third quarter of 2009, up from 17.5 percent in the second quarter and 570 basis points above the same quarter a year ago. Completions in the third quarter of 2009 stood at 0.3 percent of inventory, up from 0.2 percent in the previous quarter but below the 0.6 percent historic average. Rents fell again in the third quarter of 2009 and are off 8.2 percent from the same quarter a year ago.

Warehouse vacancy rates stood at 13 percent in third-quarter 2009, up from 12.2 percent in the second quarter and 320 basis points above the same quarter a year ago. Completions declined as a percentage of inventory, from 0.3 percent in second- quarter 2009 to 0.2 percent in third-quarter 2009, both below the 0.6 percent historic average. Rents fell again in third-quarter 2009 and are off 8.9 percent from the same quarter a year ago.

Apartment vacancy rates stood at 8.4 percent in third-quarter 2009, up from 8.2 percent in the second quarter and 190 basis points above the same quarter a year ago. Completions as a percentage of inventory remained the same as second-quarter 2009 at 0.2 percent, below the 0.4 percent historic average. Rents fell slightly in third-quarter 2009 and are off 5.8 percent from the same quarter a year ago.

Hotel occupancy rates (a moving 12-month average) stood at 58.7 percent in third-quarter 2009, down from 60 percent in the first quarter of 2009 and 680 basis points below the same quarter a year ago. Completions were up slightly as a percentage of rooms, from 2.6 percent in third-quarter 2008 to 3.2 percent. Revenue per available room (RevPAR) fell in the third quarter of 2009 compared to the same quarter a year ago, off by 23.1 percent.

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Defunct E.V. spas working to repay customers

The owner of two defunct day spas in Gilbert and Mesa said he's working to refund hundreds of former clients who paid for services they weren't able to use before the business abruptly folded.

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East Valley Tribune to shut down Dec. 31

The Tribune Newspapers will cease operations on Dec. 31, the parent company Freedom Communications said Monday.

Read the company's news release (PDF)

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Phoenix Coyotes sold to NHL for $140M

The Phoenix Coyotes have been sold to the National Hockey League.

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Mesa transit center to open Thursday

The Superstition Springs Transit Center and 13 transit stations will open officially Thursday afternoon.

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Home sales continue to increase

One measure of home sales rose for the eighth consecutive month in September, the longest streak since 2001.

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CIT Group's Ch. 11 leaves lending hole

Restaurant operators, already scrambling to fund growth, may need to reach deeper into their bag of tricks as CIT Group Inc., a large industry lender, has filed for Chapter 11 bankruptcy protection from creditors.

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Laundry operates on coins, 'green' theory

When customers ask Eco Laundry owner Tina Staletovic if her business is a chain, she takes it as a compliment.

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REGISTER ASAP! THERE IS A LIMITED NUMBER OF TICKETS AVAILABLE FOR THIS EVENT! I am a panelist for the CCIM/IREM Economic Forecast on January 12, 2010. It is at the Phoenix Country Club and starts at 8AM. I will be on the Retail Panel with Daniel Pollack and Kevin Schuck. Our moderator is David Malin from Vestar. If you are in town, please come support me at the event. The website to register is www.iremccimforecast.com.

Feel free to contact me regarding any of these stories, the current market, distressed commercial real estate opportunities or your property.

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