Blank Check to Blind Pool

Buyout Fund Contemplates a REIT Turn - WSJ.com:

"The move is the latest sign real-estate investors are looking to the public markets for capital at a time banks are reluctant to lend and private capital is scarce. The strategy has paid off for many. Investors have bought more than $15 billion in REIT secondary stock sales so far this year."

Yet Another Tough Forecast for CRE...

For Commercial Real Estate, Hard Times Have Just Begun - NYTimes.com:

Tough Sledding Still Forecasted for CRE...

"Even though industry lobbyists were able to persuade Congress to extend a loan program aimed at prodding the stalled securitization market back to life, several analysts said it was unlikely to head off a spate of defaults, foreclosures and bankruptcies that could surpass the devastating real estate crash of the early 1990s."

...About $393 billion worth of mortgages are scheduled to mature by the end of next year alone, and an estimated $39 billion more were due to expire this year but have been extended, he said...

...

This Multi-Family Deal Didn't Hold Up

Buyers of Huge Manhattan Complex Face Default Risk - NYTimes.com

There's an old line I heard regarding Trump. When you owe the bank a million and cannot pay, you have a problem. When you owe the bank a BILLION and cannot pay, the bank has a problem.

Here's a deal that is the poster child for this current financial crisis we are in....

"T]he buyers [of Stuyvesant Town and Peter Cooper Village in Manhattan] are running out of time and money. Jerry and Rob Speyer and their partner, BlackRock Realty, who together paid $5.4 billion ... have nearly exhausted an additional $890 million set aside for apartment renovations, landscaping and interest payments. Rents are down 25 percent from their peak.

Real estate analysts say that the partnership’s money will run out as soon as December and that the owners are at “high risk” of default on $4.4 billion in loans.
...
A recent report from Realpoint, a credit rating agency, estimates that the property has a value today of only $2.13 billion.
...
At Stuyvesant Town, there is a $3 billion first mortgage, or commercial mortgage-backed security, and a $1.4 billion second loan, known as “mezzanine debt” held by SL Green, the government of Singapore and others.

Finally, there is $1.9 billion in equity put up by Tishman Speyer, BlackRock and their investors."

When in Doubt Cut Spending

Consumers Cut Debt By Record $21.6B In July : NPR

Interesting that economists missed this so badly. They predicted that consumers would drop their demand for revolving credit by $4B. The actual decline was $21.6B. It sure would be nice to see consumers get household debt under control. Unfortunately, the pullback is probably b/c would-be spenders simply have no choice. Most folks scale back spending (and use of consumer credit) when their income and/or confidence is low.

With consumer debt at $2.47 TRILLION we have a long way to go.

Still America has recovered from much worse and we will recover from this.

Will Car Sharing Work in Raleigh?

zipcar

Somewhere between borrowing a car from a buddy and renting one is the concept of car sharing. Think of renting a car for about $11.25 per hour.

Cool idea. Dude, don't use all my gas. The operators agree that this business model relies on people acting nicely. No smoking please and keep the ketchup off the seats. It remains to be seen if this can turn a profit, but I like it.

I think NCSU should definitely adopt it. Could also be an answer in the Triangle to the failed public rail plan.