Real Estate

Lehman can’t hope for Archstone vindication

1 Jun 2011

A $9.3 bln sale or IPO value for the apartment owner would put it where the bank marked the stake before it collapsed. Former Lehman brass may feel justified to scream they told us so. But that misses the point: the folly was not having capital to back the risks they were taking.

U.S. housing double-dip highlights black spots

31 May 2011

A new low for the S&P/CaseShiller index doesn't mean trouble everywhere DC area prices are rising. But in five of its 20 regions, prices are at or below 2000 levels, while two more have seen 50 pct falls. In those troubled areas, housing miseries will infect the real economy.

UK property’s great divide is ever more entrenched

18 May 2011

Land Securities' shares surged after a bumper year for its topgrade roster of office blocks and shopping centres. Supply shortages mean prime landlords will continue to thrive. But with lenders deleveraging fast, the picture in secondary locations could still get worse.

Rising costs may add M&A splash to paint business

11 May 2011

Prices for raw materials like titanium dioxide are surging while pricing power remains weak amid the U.S. housing slump. Rather than watching profits dry, don't be surprised if the likes of SherwinWilliams, PPG and Buffett's Benjamin Moore make deals to crunch out costs.

Deutsche mortgage misstep is doubly embarrassing

3 May 2011

Being sued for mortgage fraud is bad enough. Deutsche is taking solace in 90 pct of the loans being made before it bought the alleged offender, MortgageIT. But it calls Deutsche's due diligence into question. That's a bad advert for a bank trying to sell M&A advice to clients.

HK’s first yuan IPO sets poor precedent

29 Apr 2011

Li KaShing s real estate trust Hui Xian dropped 11 pct on its debut. Jittery markets and currency volatility didn t help, but aggressive pricing looks a bigger factor. It is bad news for underwriters HSBC and Bank of China, whose hot new investment idea now looks like a flop.

UK house prices might bottom in 2013

18 Apr 2011

Forget the frothy London market. Elsewhere in Britain, homes are taking longer to sell and supply is up. Low interest rates may have lifted the market off its lows. But history suggests a return to stagnation for the next two years, and a negative feedback loop with the economy.

Thirteen turns out not too unlucky for Blackstone

15 Apr 2011

Steve Schwarzman's buyout shop gets it right more often than not. Acquiring Graham Packaging 13 years ago wasn't one of those times. After multiple botched exit attempts, it finally has a buyer. Returns on the $4.1 bln deal look tiny but Blackstone is still making money.

Five years from U.S. housing peak, still no bottom

15 Apr 2011

April marks half a decade since the highwater mark for American house prices. After rising from a trough in 2009, prices are falling again and activity is very thin. It's another complexity for policymakers eyeing inflation: hiking interest rates could further squash housing.

HK’s debut yuan IPO needs first-mover discount

13 Apr 2011

Investors are abuzz over the Hui Xian real estate trust, Hong Kong's first yuandenominated IPO. The $1.6 billion issue will help develop a fledgling market. But investors will get a pricy, illiquid stock. Current owner Li Kashing should leave some money on the table.

China’s hot property: a guide for the perplexed

31 Mar 2011

The country has not one real estate bubble, but many. Prices in big cities are sky high, while ghost towns sit empty. China tolerated a boom for too long and is now in a tough spot. Falling prices would threaten growth and social stability but fall they must, says John Foley.

U.S. gets religion on adopting mortgage standards

29 Mar 2011

In a sense, it's back to the future. Regulators are championing the return of 20 pct down payments and other sensible, if relatively conservative, lending practices to housing finance. Some banks may squawk since it effectively ends a path to easy profits, but it's worth it.

Bond insurance zombie MBIA isn’t dead yet

25 Mar 2011

That's small consolation to Warburg Pincus, which pumped in funds as the crisis torpedoed the whole industry. If MBIA, with claims possibly climbing over $20 bln, can fend off a lawsuit by banks challenging its split, there might be hope for the investment but not the business.

Treasury offers test case for Fed’s exit strategy

21 Mar 2011

Tim Geithner's department is set to offload $142 bln of mortgage bonds it accumulated during the crisis. The Federal Reserve should take note. The gradual sale of Treasury's portfolio could hint at how markets will react when the Fed comes to sell its nearly $1 trln stash.

U.S. shouldn’t get too excited about covered bonds

17 Mar 2011

Importing this European method of funding mortgages and other assets makes sense, once a few hurdles are cleared. But Fannie and Freddie's likely continued dominance will stunt their appeal. And, as property busts in the UK and Spain show, they don't guarantee prudent lending.

Citi finally set to make money on U.S. housing

16 Mar 2011

No, the bank is still sitting on lots of toxic mortgages. But its investment banking arm is at least poised to reap fees from managing the IPO of Zillow, a website providing free data on real estate sales and valuations. It's meager consolation for some $50 bln of writedowns.

Rate rise sting could worsen UK house price slump

7 Mar 2011

The Bank of England is under pressure to show it is tough on inflation. Yet a rate hike will squeeze many homeowners and push some towards default. It could make it harder for prices to stabilise. Unless the UK economy is stronger, BoE action may do far more harm than good.

Fannie, Freddie fix fades further into future

2 Mar 2011

U.S. financial reform architect Barney Frank sees signs of consensus with Republicans on reducing the government's role in mortgage finance. But the GOP's former enthusiasm for major reform looks to be waning. Delay and dilution make it more likely taxpayers remain on the hook.

Dark side of American bank consolidation exposed

1 Mar 2011

Wall Street's titans aren't paid to sweat the details. That's become painfully obvious from the foreclosure mess that may cost big banks like JPMorgan and BofA billions. Bank mergers brought cost savings, and temporarily higher stock prices, but left a massive muddle.

U.S. property hotspot revealed by $17 bln of deals

28 Feb 2011

Giant wagers in commercial real estate, exemplified by the Blackstone and Ventas transactions unveiled on Monday, might appear risky. After all REITs, one gauge of the sector, are trading at premium valuations. But a recovering economy and tight supply make it a sound bet.