Real Estate

UK housing market policy gets ever more misguided

25 Nov 2015

Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.

Keep one eye on Sam Zell’s "For Sale" sign

26 Oct 2015

The U.S. real estate mogul’s Equity Residential is offloading a collection of apartments for $5.4 bln. While Zell got the timing right as a seller in 2007, so did buyer Barry Sternlicht’s Starwood in 2009. The one big difference is Zell’s two extra decades of investing experience.

Time is missing brick for Vonovia merger ambition

22 Oct 2015

The residential landlord has shot down a tie-up of rivals Deutsche Wohnen and LEG. Instead, eventually, Vonovia and Wohnen are likely to merge. But stretched Vonovia is ill-placed to table a convincing bid right now. It can come back after having digested previous acquisitions. 

UK may have way round property-fuelled bank busts

21 Oct 2015

The Bank of England is looking at judging commercial real estate borrowing on long-term property values, not market prices. Good plan - too much bank lending just pushes up prices, inflating bubbles. But it will be hard to extend the plan to excess-prone housing markets.  

Blackstone learns from Tishman’s Stuy Town mistake

21 Oct 2015

The private equity giant is leading a $5.3 bln deal for the vast New York apartment complex. The price almost matches what its rival paid in 2006 – before ceding the property to creditors. But with the help of more equity and City Hall support, there’s a foundation for success.

Home intrusion could pay for German landlords

14 Oct 2015

Residential landlord Vonovia is upsetting 8.1 bln euro rival Wohnen’s agreed merger with LEG, offering to acquire the buyer instead. At first glance, the new deal would leave Wohnen’s shareholders better off. In return, they cede control and take on the risk Vonovia has overreached. 

Senator’s Fannie Mae short tip had better pay off

8 Oct 2015

Bob Corker, a critic of the mortgage finance firm and its sibling, offered the highly unusual investment advice in a TV interview. Hedge funds want to keep Fannie and Freddie Mac alive, while Corker wants Congress to enact belated reforms. Sadly, his proposed bet is no certainty.

UK Tories still blind to housing crisis truth

7 Oct 2015

David Cameron promises 200,000 affordable “starter homes” by 2020. Even if the Conservative prime minister delivers, the supply squeeze is set to worsen, pushing house prices even higher. Like the previous Help to Buy ruse, a few people will gain, but the whole nation loses.        

Review: A human face for the foreclosure fiasco

25 Sep 2015

Seven years on and the financial crisis blame game is still alive and well. In his new film, “99 Homes,” Ramin Bahrani crafts a dramatic narrative that does the best job yet of capturing the complexity of assigning accountability to the collective U.S. housing delusion.

Chicago’s lack of crisis makes fiscal rehab harder

21 Sep 2015

Mayor Rahm Emanuel wants a big property tax hike to shore up underfunded pensions. It’s an important move to get the city out of a $40 bln hole. Perversely, without lenders freaking out, as happened to New York in the 1970s and Detroit more recently, the job is actually harder.

American Dream wakes amid home rental deal signs

21 Sep 2015

The merger of Starwood Waypoint and Colony American to create a company with $8 bln of homes suggests U.S. rentals will keep thriving. Cost savings will add financial strength as youngsters take baby steps into the housing market. Ownership prospects are on the rise, too, though.

India tycoons defy deflating property bubble

16 Sep 2015

Mogul Cyrus Poonawalla’s $113 mln purchase of a Mumbai mansion is a new Indian house price record. But his zeal isn’t matched by the wider market, where a correction is underway. Sales to middle-income Mumbaikars are slowing, prices stagnating, and developers are burning cash.

Moving millennials may unpack $600 bln punch

9 Sep 2015

Despite better job prospects, many young Americans are living longer with their parents. That curbs spending on housing, as well as on internet service, refrigerators and such. A Breakingviews analysis suggests millennials exiting attics could add 4 pct to GDP within a few years.

Blackstone hotel deal may include early checkout

8 Sep 2015

The buyout firm is paying $6 bln for Strategic Hotels, owner of Four Seasons and Ritz-Carlton properties. The 13 pct premium seems measly given the appetite of foreign buyers for luxury lodging. Maybe Blackstone’s rewarding commercial real estate breakup of 2007 would work again.

French housing weakness builds up trouble

17 Aug 2015

Gallic households are hardy consumers but poor investors. Reluctance to buy new housing – which counts as investment, unlike purchases of old homes – is offsetting a recovery in business spending. With demographics partly to blame, such weakness will continue to hold back growth.

Trump and China give opposing lessons in failure

7 Aug 2015

Presidential hopeful Donald Trump says bankruptcy in America is no reason to be embarrassed. In debt-laden China it’s different: the state throws money at avoiding failure. Both positions end in the same place. If going bust brings too much pain or too little, disaster follows.

London scrubs vainly at dirty money inflows

28 Jul 2015

Laundered cash hidden in UK property is an unwanted compliment to Britain’s open borders, stable politics and tolerance of anonymity. Privacy may be compromised if things are to be cleaned up. Full transparency, though, is neither in Britain’s gift nor lawmakers’ interest.

Spain picks smart route out of housing mess

10 Jul 2015

Madrid and Barcelona’s new left-wing mayors might have taken a more draconian approach to blocking evictions. Instead of interventionism, they have opted for improving support for those on the receiving end. With luck, Spanish bad debt investors won’t be the only beneficiaries. 

Brookfield can sail off with Asciano

2 Jul 2015

The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.

WeWork stretches sharing-economy valuations

26 Jun 2015

The groovy provider of office space - and beer - to millennial workers is now worth $10 bln after its latest funding round, doubling in just six months. WeWork is growing fast, but based on established rivals’ metrics earnings would need to jump 15-fold to justify that price tag.