Philippine Perspectives

Shopping here appears to be the national pastime. Forget basketball. Hit the mall. You can even got to Sunday Mass there if you are so inclined, with services in English and Tagalog. (Remember, English is an official language here.)

We are about to celebrate my mother-in-law's 80th birthday in an hour. There should be 200+ people in our yard here, and hopefully we'll have enough food. You never know how many people will show. The problem with estimating a crowd is that it is acceptable for the invitees to bring family and friends. And since my wife and I are the official hosts of the party...well, you get the picture. The mayor of Maria's hometown (pop. > 260,000) was kind enough to send over a tent.

A burger, fries and a drink: $1.50 US.

Two large pizzas: $9.

A party for 200 with food, two bands, a staff of 20 serving and all cheaper than you would think.

Going to a shopping mall literally halfway around the world from home and randomly running into Eddie and Carmen, friends of the family who have visited us in Bourbonnais: priceless. It's a small world after all.

And by the way, this mall (one of soooo many) is, in our opinions, nicer than the regional mall where we live. And it's about 98% leased at less than one year old.

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GGP- day of reckoning?

Hard to say at this point. The stock's up 31% as I type. The company announced that it was able to refinance $900 million in debt, but that is not the $900 million that comes due today for the Vegas malls. There's no assurance of further extensions on those loans; I'd have to speculate that this is because Citibank has been playing hardball by wanting a retrade on another deal. And I guess the other banks cannot, have not or will not buy Citi out of its share of the loans, which is one way to skin that cat.

For those of you interested in the CMBS part of the deal in the event of a filing, this story on a Fitch downgrade will explain it well, and that those investors ought to be safe becauseof bankruptcy remoteness. Ah yes, substantive nonconsolidation opinions.....zzzzzz......

Have a good weekend! I'll be back if there is more to say. I may have to head back to the Office Depot liquidation sale at the brand-new branch near my house. So sad. That's a ten year lease going dark, by the way, although I do not know any other terms.

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Thank goodness for dumb doctor deals

Actually, that's a misnomer here. "Dumb doctor deals" are real estate transactions that make no sense but for the fact that there are doctors with plenty of money backing them.

Reading this NREI story was a welcome relief from all the gloom and doom in the news lately. The sector, while perhaps not recession-proof, is still alive:

According to the latest data from Real Capital Analytics, sales of medical office properties totaled $3.3 billion in the first nine months of 2008, a 13% drop compared with the same period a year earlier. But that dip pales in comparison to the 62% dive in property sales for the entire office market in the third quarter.

Whew! Someone's doing something! And banks are dying to lend money to doctors right now, as they think that is a good exposure for their money. Let's face it -- we all get sick. We are, however, noticing anecdotally that the ER is in more use lately. Why? People are waiting until they are really sick to see a doctor because of a lack of money or health insurance.

And on the personal front, I should add that the newest medical office building in Bourbonnais, Illinois is opening soon, probably in early to mid-January. Yes, I was the lawyer on the deal; if I hadn't been, I probably would have been kicked out of the house. Wait until they get the final bill!

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Tuesday Tidbits - 10/14 Edition

So much to write about, but so little time.

Tales from the front? Deals are closing, but lenders are still stalling. One great story I heard today: a lender has been putting off a borrower for six months now for various reasons; the latest is that the appraisal is more than six months old and therefore stale, thus requiring a new appraisal. Gotta love that one. On the good front, I appear to have wrapped up a deal or two today.

Many institutional buyers are still sitting out of the commercial market, even cash buyers. Why? They say there's just no confidence at all that we are anywhere near a bottom. I guess the mentality is why buy a 7 cap when it might be an 8 or 9 in a year? Of course, there is still a lost opportunity risk associated with being on the sidelines. You eventually have to move money to make money. (H/T Traffic Court.)

One of the better real estate bloggers out there, Doug Cornelius, has moved on from Goodwin Proctor to an in-house gig. I wish Doug well and hope he keeps up his excellent blog. On a personal note, I'm glad to see I'm not the only one who left a great firm for a compelling opportunity.

Finally, the golf course next to my house is supposedly closing. The owner wants to develop the land around it with more luxury homes, but the village refuses to give him water and sewer unless he annexes into the village. The current plan (we'll see if this actually happens) is to plow under the course and plant corn and soybeans. Can you say highest and best use?

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