Carried interest is done? Pretty please?

Carried interest is done? Pretty please?
According to this story, the proposed tax hike on carried interest appears to be dead for the time being:Senator Debbie Stabenow, a Democratic member of the finance committee, told Crain’s Detroit Business on Tuesday a hike in the rate of taxation for carried interest would “not be part of any bill we pass”. Boy, let's hope so. I understand the desire to go after the hedgies and Wall Streeters and the banking industry in general. Really, I do. But, as I have said before for, oh the last year and a half or so, this would be a disaster in the making for commercial real estate. And I am by no means...

In a word, Illinois is...basically bankrupt. What do we do?

In a word, Illinois is...basically bankrupt. What do we do?
For all intents and purposes, that is what this excellent story in Crain's, captioned "Illinois enters a state of insolvency," is telling us.  I think most of us already know it and just do not want to say it. California is in worse shape in terms of numbers but on a per capita basis I think Illinois takes the cake.  And we have the worst negative net worth too.  We are about $1,000 per person in the hole -- or $12.8 billion.Hoo boy. "According to Jim Nowlan, senior fellow at the University of Illinois' Institute of Government and Public Affairs[,] 'We're close to de facto bankruptcy,...

The beginning of the end or the end of the beginning?

The beginning of the end or the end of the beginning?
And I say that with apologies to devotees of Winston Churchill.Most people will say that Tishman and BlackRock walking away from Peter Cooper Village and Stuyvesant Town is the end of the beginning, and that the [insert cliche - shoe drop, train wreck, yadda yadda -- here] is now going to go into full force. This should be a major league equity write off on the equity side-- say a cool billion?  And, given the huge drop in value of the complex, the lenders are in deep too. This happened, by the way, after some weeks of negotiation between the parties.  But then let's also not forget...

Relationships or money?

Relationships or money?
What is more important these days? At one point I would have said the former but now I think I may have forgotten the Golden Rule: those who have the gold make the rules.  That is the case with lenders and borrowers. After having had the upper hand for so long, borrowers are now on the shorter side. And that is why we are seeing what we are in the business on loans, whatever cliche you decide to use. Lenders insist that to extend or to enter into new deals, more money, more guarantees, more collateral, more interest -- more everything, really -- be on the table so the lender is in a better...

Why loan money?

Why loan money?
Much as I rail on the bankers sometimes for not loaning money for commercial real estate projects, perhaps I cannot blame them. Why?One reason is certainty. Loans were packaged as safe and rated investments by the rating agencies. But now we see that insane numbers of deals are under water, meaning more pain is on the way. We are talking 36% of loans maturing this year, according to reports. There is utterly no certainty in that type of investment, thus making it very risky. And properties going back to special servicers can be ugly, as the linked post suggests. This will present challenges to...

Extend and Pretend, Train Wreck...what next? Armageddon?

Extend and Pretend, Train Wreck...what next? Armageddon?
Oh, wait...Armageddon's been used as well to describe real estate. I've also been guilty of using hackneyed phrases to describe what the market has been like. Last year's fave was "extend and pretend." So far in 2010, "train wreck" is in the lead.  You've got Jamie Dimon, the New York Times, plenty of other news outlets, Time of course...it goes on and on and on, sort of like The Song That Goes Like This from Spamalot. (I love Sara Ramirez...she basically stole the show in Chicago.)Here's another piece of good analysis from Kenneth Leonard.  And here is a contrarian view posted recently....

Why do commercial real estate blogs die? And why the heck am I still here?

Why do commercial real estate blogs die?  And why the heck am I still here?
When I go through my list of blogs I like to read, I often come across a casualty: a blog that has ceased to exist or has stopped actively posting stories.  I'm always sad to see that because I like reading what my fellow bloggers have to say.  And there have been some very smart people doing this.Maybe these factors are the same in all types of blogging -- I'm not about to do the research -- but I have some ideas as to why and would like to hear from others about why this trend goes on.  And let's talk about why I am still here, too -- what the heck.Most -- but not all -- of the...

The slo-mo train wreck and mainstream media

The slo-mo train wreck and mainstream media
A lot of people have been writing about Time's characterization of the commercial real estate market as a "slow motion train wreck."  And I agree with those who think it may well be an apt analogy.There is still going to be hurt going on as loans mature, lenders do not lend, and equity requirements go through the roof. And I wonder aloud if we'll still need some kind of RTC situation to eventually handle it, although the slow-mo nature of it all may obviate that need.  I do know this: when some smart folks were talking about how awful the market was, the mainstream media was gaga over...

Mortgages and the Due-On Sale Clause

Mortgages and the Due-On Sale Clause
I am guest blogging at Jeff Brown's excellent website today; if you like to read my perspectives on mortgages and the due-on sale clause, then read here.  And have a great da...

The 7% Solu....errr....Problem?

The 7% Solu....errr....Problem?
That was my immediate reaction when I came across this piece over the weekend. Previously I was pooh-poohing talk of 2 and even 3% delinquencies on the grounds that they were still crazy low. But once you get over 5% then you start a-thinking a little more.The numbers by sector were about what I expected with one exception:The multifamily sector accounted for 26% of the $37.9 billion delinquent unpaid balance for CMBS in November, followed closely by retail (25%), office (16%), and hotel (15%). Conversely, the industrial market accounted for less than 2% of the delinquent unpaid balance for CMBS...