Source: GlobeSt
Richmond, VA - After a roller coaster two weeks in which LandAmerica Financial Group though it would be acquired--and then found out it wouldn’t--the title insurer has declared bankruptcy.
It is now selling three subsidiaries to Fidelity National Financial Inc.--its erstwhile suitor and rival, which at the beginning of November offered to purchase LandAmerica in a stock transaction valued at $128 million. Citing the terms of the acquisition offer, Fidelity backed out after a two-week due diligence period. Under a newly-inked stock purchase agreement, Fidelity is now paying $298 million in total for Lawyers Title Insurance Corp., Commonwealth Land Title Insurance Co., and United Capital Title Insurance Co. Specifically, it is grabbing LandAmerica’s two main underwriting subsidiaries--Commonwealth Land for $158.6 million and United Capital for $139.4 million. These transactions are subject to approvals by the bankruptcy court, the Nebraska Department of Insurance, and other state and federal regulatory agencies. The companies are hoping to close by December 2008 and are requesting an expedited approval from the Bankruptcy Court.
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Source: Multi Housing News
New York--Cushman & Wakefield has formed the Resolution Group, an interdisciplinary team of Cushman & Wakefield property investment and management professionals from across the U.S., to offer clients a coordinated approach --to maximize the value of individual assets, portfolios and loans that are facing a variety of challenges stemming from the ongoing financial crisis. The team comprises seven managers, one for each region in the U.S.
This group will bring together teams of seasoned and knowledgeable professionals with specialized expertise in the areas of asset management, financial analysis, valuation, leasing, property management, project management, investment sales, loan sales, debt and equity finance and litigation support.
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Source: CPN
The Dow Jones index started down, bumped up a little, then went down again, and then... the usual undulations, in other words. By the end of the day, however, the Dow was down 233.73 points, or 2.63 percent. The S&P 500 dropped 2.58 percent and the Nasdaq was down 2.29 percent.
Citigroup Inc. has unveiled plans to eliminate 50,000 jobs, or about 14 percent of its workforce, in the wake of four quarterly losses in a row totaling some $20 billion. The market was unimpressed: Citi stock fell in the morning, but rose toward noon back near where it started, then fell again down 0.63, or 6.62 percent.
Dallas Mavericks owner Mark Cuban has been charged by the Securities and Exchange Commission with insider trading. The SEC is alleging that Cuban, an Internet entrepreneur, sold 600,000 shares of Internet search engine company Mamma.com Inc. in 2004 on inside information that it would initiate a stock offering. Strictly speaking, this is a pre-Panic of 2008 sort of story, but it's nice to know that the SEC is still on task in wanting to slap billionaires on their wrists.
Speaking of high-net-worth individuals, Goldman Sachs Group Inc., famed for its exceedingly fat executive bonuses, has decided to cancel bonuses for its senior officers in 2008. Goldman CEO Lloyd Blankfein's bonus last year was nearly $70 million, so it's a considerable cut, though presumably he has some dosh stashed away for this unimaginably rainy day. Shortly thereafter, Swiss bank UBS followed suit in axing executive bonuses.
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Source: CPN
The financial market bailout bill passed the Senate late last night, after much stick-wielding by both the administration and Senate leaders on both sides of the aisle by a vote of 74-25. The sticks, however, came with plenty of carrots, too.
Such sweeteners were designed to overcome conservative resistance to the $700 billion financial industry bailout and they worked in Senate, and appear to be working in the House, which is next to take up the bailout issue. The House defeated the initial bailout effort by a vote of 228-205, sending the Dow down a staggering 777 points.
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Source: Multi Housing News
Compared to second quarter 2007, Los Angeles, New York and San Francisco saw major setbacks in the number of sales, according to Investment Properties Report, Q2 2008, a quarterly analysis of multifamily homes in the three regions conducted by PropertyShark.com, based in New York.
“The biggest problem causing the setbacks in the number of sales is the lack of financing for properties, which means there are fewer buyers in the market,” Bill Staniford, CEO, PropertyShark.com, tells MHN. “It is the basic malaise in the economy right now and people are holding onto their properties because they know they will not get the right value.”
Experiencing the steepest decline among the three regions, New York City was down 29.4 percent. In Q2 2008, New York City saw the lowest value for closed multifamily building transactions over a two-year time period while Los Angeles and San Francisco saw a slight increase from Q1 2008, when both regions experienced two-year lows.
New York City prices have reverted back to 2006 levels and all price indicators continued their downward trend with the median sale price down 7.7 percent, and the median price per sq. ft. down 4.7 percent, compared to Q2 2007.
In Manhattan, though prices stayed up with the median price per sq. ft. reaching a two-year high in this quarter, sales transaction volume was down considerably. There were 86 closed transactions in Manhattan during the second quarter of 2008, down 13.1 percent from Q1 2008, and down 51.1 percent in comparison to Q2 2007. The number of sales dropped dramatically hitting a two-year low for all three groups studied in this report (two- to four-family buildings, five plus family buildings, mixed-use buildings).
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Source: James Comtois
Sales at foreclosure auction in California jumped dramatically in July, increasing by more than $2 billion in combined loan value to $12.55 billion, according to ForeclosureRadar, a website that tracks every California foreclosure with daily auction updates. This represents more than 1,300 properties being taken to auction per business day, up from 415 per day one year ago.
Also, according to ForeclosureRadar's California Foreclosure Report for July notices of default declined for the third straight month. The total number of properties that are still actively scheduled for auction increased to 64,598 at the end of July, up from 59,973 at the end of June and 53,793 at the end of May. This indicates that further increases in foreclosure sales are still likely near term, despite the declining number of defaults.
Other findings from ForeclosureRadar's report include that notices of default declined by 4.6%, to a total of 40,219 filings representing $17.71 billion in loans. Also, notices of trustee sale, which are typically recorded 105 days after the notice of default, and which set the auction date and time, increased 9.8% to 39,010 filings in July. Looking at this number in comparison to notices of default, far fewer homeowners are finding a way out of foreclosure. At 97% of defaults, July's notices of trustee sale filings are nearly double the 50% that were more typical as recently as February.
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DUBAI, UAE-Desert Dream Real Estate & Investments LLC is poised to unveil plans for a $1.7-billion residential tower in Nakheel's Waterfront development.
A private launch party will be held tomorrow. Based on Internet research, the Desert Dream plans to build a 48-story tower in Nakheel's Waterfront, which is under construction. The development represents 65% of the developer's land bank and the last 15 km of natural coastline of western Dubai. Waterfront is considered largest master-planned waterfront development in the Middle East. Its Waterfront City will have 12.2 million m2 [131.3 million sf] at completion in 2018 and flanked by five mixed-use districts, each ranging from roughly 810,000 m2 [8.7 million sf] to five million m2 [53.8 million sf].
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On the heels of bad news Tuesday from Fed Chairman Ben Bernanke, who told lawmakers that growth and inflation risks are increasing, comes bad news today from the Los Angeles County Economic Development Corp. in its mid-year 2008-2009 Economic Forecast and Industry Outlook for California and Southern California. The report, released today, depicts California in or near a recession, with some areas and some industries withstanding the downturn better than others. “California is tip-toeing along the edge of a recession, while some of its larger metropolitan areas have been in one since mid-2007,” the report states. It shows the balance of 2008 and much of 2009 seeing a mixture of good and bad news for California, “with the outcome looking more and more precarious."
Since the Downtown Los Angeles-based LAEDC’s last report in February, the Southern California region, the state and the nation have undergone myriad changes, namely skyrocketing costs of energy and commodities. And “don’t forget, you have the intensification of the financial sector problems,” says Jack Kyser, one of the authors of the report and chief economist for the LAEDC.
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Amidst headlines of doom and gloom in the economy, the multifamily industry is holding relatively strong. “Vacancy rates in the apartment sector have been stable in the last three quarters and apartment rent growth in the second quarter of 2008 has seen the strongest gain as compared to all other types of commercial real estate,” Dr. Sam Chandan, chief economist and senior vice resident for research at Reis Inc. said today in a virtual conference hosted by Reis.
“Overwhelmingly and in all parts of the country, buyers are preferring to rent now as a result of which effective rent growth is expected to keep going up. The overall slowdown and situation in the slowing labor market will negatively affect apartments and in some markets, the condo shadow market will compete with the apartment sector with more units coming online,” he said. As a result, asset prices for apartment units have been falling from their peak period to the first quarter of 2008, by 13.3 percent.
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Affordable housing has become one of the silent victims in the ongoing housing crisis. While multifamily industry experts have largely been optimistic about apartments, this is not the case with low-income housing.
“The Low Income Housing Tax Credit program (LIHTC) has suffered greatly because banks have faced great losses recently and this has diminished their appetite for LIHTC funding,” Mary Jo George, an attorney in the real estate department at Ballard Spahr Andrews & Ingersoll, tells MHN. George represents lenders in regards to multifamily housing, senior facility housing, and manufactured housing communities. “Among the deals that are happening, I have seen several of them fall apart at the last minute,” she adds.
Deals involving a long relationship between the developer and LIHTC investor are being closed, according to George. In any case, many affordable housing developers are forced to find multiple sources of funding for a single project, which is making deals complicated. In this climate, the pressure to close a deal is also very high. “LIHTC investors were used to a lot of delays, but that has changed now. The turnaround time is very short,” says George.
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