Freddie Mac Says Lever it Up!

March 9, 2010
REIT Money Man

According to Instutional Investor, Freddie Mac is bringing its high leverage crack pipes back to the multi-family market. But the move is less a return to the go-go days than a sign of just how weak the market is, and it appears to be driven more by the fact that Freddie is running out [...]

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Toxic Exploding Freddie Mortgage Factory To Close (Phil’s Stock World - Members S..., 2/26/10)
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Read more on Freddie Mac at Wikinvest
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Northstar is Running out of Time; is Hamamoto Outside the Tent?

March 3, 2010

After a furious year of churning CMBS, repurchasing outstanding corporate debt and refinancing its bank loans, among other feats, Northstar actually ended the year with a little bit of cash. That’s the good news. The bad news is they’re going to need it.

Northstar now has about $238 million in the bank, which includes [...]

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Record CMBS Loss Severities Expose Major Flaw in Securitization, Compensation Models

February 18, 2010

I love zerohedge. Last week, they posted a story whose headline blared “Kanjorski Admits There Is A Growing Bubble In Commercial Real Estate As S&P Observes CRE Losses Could Wipe Out Banking System.”

You’re forgiven if you didn’t know, but Kanjorski is a Congressman from the 11th District of Pennsylvania, and his website prominently features a [...]

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Piedmont Office REIT Finally Goes Public…Sort Of

February 16, 2010
REIT IOU

Non-Traded REITs are a funny lot. They register with the SEC and comply with all public company filing requirements, yet their shares don’t trade on any public exchange. Most aspire publicly to achieve some sort of “liquidity event” for investors within 7-10 years of formation, either through a public listing or bulk asset [...]

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Commercial Real Estate: 6.8 Trillion Reasons Why it Won’t Derail the Recovery

January 26, 2010

Not even Joe DiMaggio could have hit this change up. Just one year ago, the United States financial system stood on the brink of failure. GDP had declined by 6.25%, the most severe contraction since 1982. In November 2008, non-farm payrolls were cut by 533,000, the most severe contraction since 1974. But just a [...]

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Direxion’s New REIT ETF Posts 168% Gain In Six Months

January 13, 2010
Making Money on REIT ETFs

As the world was coming to an end in March of 2009, REITWrecks wrote a rather forward-leaning post entitled REIT Stocks: 4 Ways to Play the Carnage.
REITs have rallied strongly since then, and even more strongly since Direxion launched its new levered REIT ETF series in early July. The launch could not [...]

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The State of Commercial Real Estate: Sternlicht and Zuckerman Have a Few Things to Say

January 10, 2010

Barry Sternlight and Mort Zuckerman are in the thick of it. Both run REITs that focus on two of the most battered sectors in the business: mortgages and office buildings. Sternlicht, a commercial real estate veteran, took Mortgage REIT Starwood Properties Trust (STWD), public in August, while 72 year old Zuckerman has been [...]

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Mortgage REIT Annaly Downgraded by Piper Jaffray

January 9, 2010
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REIT Wrecks avoids the daily ugrade/downgrade wars on Mortgage REITs in favor of longer term trends, but Annaly is a bellwether and for that reason Piper Jaffray’s downgrade of NLY from Neutral to Underweight is worth noting. Piper Jaffray lowered their price target by $3, or over 15%.

The most interesting aspect of the [...]

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Does Denial of Loan Modifications Constitute A Violation of the Fifth Amendment?

January 7, 2010
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These days, the only thing more cramped than a Hong Kong cemetery is office space for special servicers. Nevertheless, if you’re a borrower in trouble, it’s unlikely that you’ll be outnumbered. CMBS default rates ballooned by almost 500% in 2009, up from 1.21% in the beginning of 2009 to over 6% by [...]

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San Francisco Apartment Loan Portfolio Sells For 64% of Face Value

January 3, 2010
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Talk about a REIT Wreck. Landing head first in a rock pile would be a much better metaphor for the 2009 commercial real estate market than an explanation for my year-end absence. However, that’s exactly what happened in a biking accident early in November, and my right arm spent the waning days of [...]

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