Real Estate

Irish banks may escape bloodbath

1 Sep 2008

The Emerald Isle s lenders look horribly exposed to its falling property market. Further pain is likely. But Irish banks have mostly avoided structured credit and have belowaverage arrears. Unless the Irish miracle unravels completely, the banks should weather the storm.

Liberty faces a long siege

28 Aug 2008

Two of the world s biggest property companies have pitched their tents outside UK retail giant Liberty. Neither Westfield nor Simon Property will probably strike now retail property is slipping. But they are jostling for the high ground when an acquisition becomes possible.

Taylor Wimpey must get its banks on board

27 Aug 2008

The UK house builder has written down its land bank more aggressively than its peers. That should leave it looking healthier when the market finally turns. But write downs won t fix the negative cash flow or stabilize the share price. What s needed is a deal with its lenders.

Foxtons floundering is private equity test case

26 Aug 2008

BC Partners swoop on the London estate agency last year looked as pricey as the property valuations of its infamously aggressive sales staff. The rental arm may help to keep it afloat. The bigger question is how to minimize the fallout from a classic topofthemarket deal.

Cost of turning the GSEs into real banks: $200bn?

22 Aug 2008

Feeble regulators have allowed US mortgage giants Fannie and Freddie to get by with minimal capital. If Treasury secretary Paulson wants them to be as strong as real privatesector banks so he can break them up and sell them off, he may have to inject some $200bn or more.

UK banks keep on lending to property

20 Aug 2008

Despite an increasingly grisly UK real estate market, bank loans to the sector rose 30% in the last year. Only a bit of that balance sheet growth is new, though. The rest is involuntary some banks didn t stop lending in time. That could hurt as the UK economy slows.

Even before a rescue, GSE owners lose like Bear’s

20 Aug 2008

Bear Stearns Fedassisted sale for $10 a share saw anyone who held its stock a year ago lose more than 90% of their money. Even before a government rescue, owners of Fannie and Freddie are now in the same boat. Put it down to complacent management, weak regulation and conflicts.

British Land suffers from economy – and gloom

14 Aug 2008

The UK real estate firms exposure to the City of London where rents are now falling may justify it trading at a hefty discount to its assets. But the company's shares are also suffering from the bearish assumption that falling rents will be more than fully reflected in prices.

US foreclosure surge piles on more woes for GSEs

14 Aug 2008

The number of houses in receivership is rising fast, and those held by Fannie and Freddie have doubled in the past year meaning even betterquality owners are defaulting. That s a bad omen for the market and for the companies, which must pay a bundle to maintain the properties.

West End real estate slide is test case for UK

12 Aug 2008

London s West End should have the safest commercial property in the country. But even here a double dip is under way falling rents are now joining falling prices caused by the recent property boom unwinding. How bad it gets will be a pointer for the rest of the UK.

GSE shareholders should recall the Federal bit

8 Aug 2008

In another reminder that Fannie Mae and Freddie Mac are cuddlysounding nicknames for companies whose names actually begin with Federal , both US mortgage giants have slashed dividends after billions more in losses. They re right to do so, but shareholders will be the losers.

Repossession threatens UK with return of 1990s

31 Jul 2008

As UK house prices decline, many highly leveraged homeowners will fall into negative equity. House repossessions could rise sharply and recovery is likely to be slow. But lenders and the Bank of England may be able to help more now than the last time around, only two decades ago.

Taylor Wimpey moves to Plan B

24 Jul 2008

The UK house builder has called in NM Rothschild to renegotiate its covenants, confirming that the sector can t raise equity in the current environment. Taylor Wimpey will now try to ensure its bondholders don t abandon the company. Luckily, that doesn t look likely.

US housing bill could turn into albatross

23 Jul 2008

Legislators want to be seen doing something. But the bill which President Bush now says he ll support has flaws. For instance, it entrenches Fannie and Freddie and adds fresh government exposure to mortgages. These and other temporary fixes could prove hard to shake off.

Agency debt trades on Panglossian assumptions

16 Jul 2008

The proposed bailout of mortgage giants Fannie and Freddie has given a big boost to their debt. Spreads are now back in line with their historic levels. Yet terms of the bailout are unknown. With so much uncertainty, larger spreads seem warranted.

Spain lets top property company go bust

15 Jul 2008

Martinsa Fadesa filed for administration with E5.4bn in debts after the government refused a bailout. The decision must have been tough: it could lead to a cascade of failures, restructurings and bank woes. But a purge is required to restore balance in the overbuilt market.

Should rescued GSEs now be slowly killed off?

14 Jul 2008

Fannie Mae and Freddie Mac distort the US economy, and one option now available is gradually to kill them off. They can t be closed immediately, but if they were run down though higher fees and lower salaries, market forces would probably replace them within five years.

Fannie-Freddie containment is crucial

11 Jul 2008

If US policy wonks handle the crisis poorly, the mortgage giants woes could spread throughout the economy with dire consequences for banks, consumers and the government itself. Decisive action is called for, but the pain should be spread gradually.

Fannie, Freddie are US government’s monster SIVs

10 Jul 2008

Like the banks that ignored their contingent exposures to offbalancesheet vehicles during the boom years and lost billions when things soured, the US chose to pretend it wouldn't ever have to back the mortgage giants. Now it faces an unpleasant reality.

Abu Dhabi could avoid making Mitsubishi’s mistake

9 Jul 2008

One of the emirate s sovereign wealth funds has bought 90% of New York s iconic Chrysler building. It s reminiscent of Mitsubishi Estate s disastrous 1989 investment in Rockefeller Center. But Abu Dhabi has missed the peak and it has enough wealth to wait out the downturn.