All GLG News Analyses Filed Under: Commercial Market Trends
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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June 3, 2009
The Real Estate Reel | www.cre-advice.com
Financing difficulties in the commercial real estate markets
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Kenneth LeonardPrincipalLeonard Associates
A Perfect "Comparable" for Determining Value
June 3, 2009
Filene's Warns of Store Closings, Job Losses | www.chicagorealestatedaily.com
Since I was responsible for the selection of locations and the negotiation of leases for the first five Filene's Basement stores, I have naturally followed the fortunes of this troubled retailer very closely. Therefore I feel qualified to opine on the underlying message contained in this recent announcement about the future value of Filene's real estate portfolio. This value is of critical importance to the creditors and bankruptcy judge to help determine the total asset value of the company. I think I can safely assume that because of the previously announced pending sale of the two downtown Chicago stores, a substantial value has been allocated to the leasehold value of their other leased stores. Now that the prospective buyers have walked away from this sale, whatever value has been given to the rest of their leases is in serious doubt and the intelligent investor in Filene's bonds or creditor's paper, needs to immediately downgrade the prevailing asset value numbers.
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Kenneth LeonardPrincipalLeonard Associates
June 1, 2009
Sears' MyGofer Lies Low For Now | www.chicagotribune.com
Having spent several hours analyzing Mr. Lampert's newest attempt to demonstrate his retailing acumen in Joliet, Illinois, I can safely say that the Tribune's retail analyst very negative review was far too complementary. The Trib and TheStreet.com characterized Mr. Lampert's feeble effort to "revolutionize retailing" as a poorly conceived attempt to marry Amazon.com with Dairy Barn. TheStreet.com also awarded Eddie's new store concept with its' "Five Dumbest Things On Wall Street" award. In my humble opinion I think both the Trib and TheStreet were being far too complementary. Although I realize that Mr. Lampert may not have familiarized himself with very many of the prior bad retailing ideas in history, but even the barest minimum of research would have revealed the terrible flaws that caused the demise of such well conceived and well accepted earlier "catalog showroom concepts" as Service Merchandize, Best Products, Ellman's, Sterling Jewelry or Brendel's!
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June 1, 2009
CBRE: Rising vacancy across Europe offers occupiers greater choice and flexibility | www.europe-re.com
The european markets at the moment are, generally, in a very uncertain position. Rental fees are not anymore granted for Landlords. Large areas offices' contracts renewals or new contracts are very difficult at the moment. The main cities like London, Milan, Frankfurt, Paris, Rome are suffering a little bit less then others due to their location in the heart of business' areas.
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Robert CanterPresident-FounderPerformance Realty Solutions, LLC
S&P Downgrades Triple A Rated CMBS Bonds
May 29, 2009
New debt fears over commercial property | www.ft.com
With S&P about to downgrade Billions of Dollars worth of CMBS bonds the investor community holding these assets are in a panic. This has become a self-fulling prophecy, and had the rating agencies gotten it right the first go round, perhaps we would not be in the world of hurt we now find ourselves.
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Robert CanterPresident-FounderPerformance Realty Solutions, LLC
May 26, 2009
S&P lowers rating for Tishman Speyer's D.C. portfolio | washington.bizjournals.com
The key implication here is Tishman Speyer is paying the price for their arrogance and avariciousness. They have been proven so wrong in their thinking that this past commercial real estate bubble would last forever...Of course they are not alone.
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Spain's Residential Construction Equipment Market Collapse (RBA, TEX, Liebherr)
May 21, 2009
The Cranes in Spain Point Mainly to a Strain | online.wsj.com
The Spain's residential real estate collapse side-effects are now being seen in construction equipment markets, as exagerated demand for construction created an unsustainable market for cranes, trucks, tractors, mechanical diggers. Companies in the construction equipment industry, now face both the complete dryness of one of their booming markets and the competitive pressure coming from strained used equipment. Sales data from Terex Corp. (TEX) showing a 70% drop in orders or Liebherr that went from selling 900 construction cranes in 2006 to 0 in the first quarter of 2009, quantify the daunting situation. The only positive implications are for auctioneers like Ritchie Bros. (RBA) that are being overwhelmed by the quantity of stock items that they are requested to clear.
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Steve BottfeldPrincipalMarketing Solutions
May 11, 2009
Big Project in Las Vegas Secures Pact to Survive | online.wsj.com
MGM Mirage's CityCenter, the $9.4 billion-plus resort under construction in Las Vegas, won a crucial victory last week when its lenders and owners struck a deal that guarantees the project will be finished. With unemployment topping 10.4% in Las Vegas -- and headed higher in the short term -- this project offers three critical positive elements to the Las Vegas economy in the second half of this year. (1) It provides vital new employment; (2) (2) It provides continued employment for those in construction and administration; and (3) (3) It offers new reasons for visitation to Las Vegas. In short, the completion of CityCenter is not a life jacket for the Las Vegas economy. It may be a full fledged lifeboat enabling an escape from a sinking economy. Let me amplify these thoughts:
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Kenneth LeonardPrincipalLeonard Associates
Eddie: Your Ignorance Is Showing
May 7, 2009
Sears focused on its real estate | www.chicagotribune.com
At the recent SHLD board meeting Mr. Lampert announced his latest "original" thoughts about how he was going to extract value from what he has called his "$12 billion hidden asset value in Sears owned stores". His plan is simple, he increases the size of his real estate department so he can start leasing the under utilized space in Sears stores to other retailers. He plans to become a landlord by creating "mini-malls" inside his stores. Will it work? Of course not! Why not? Read below.
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Jack KernManaging DirectorKern Investment Research
April 29, 2009
New shopping centers across Europe delayed or cancelled as economic downturn bites | www.europe-re.com
The quality of life for many Europeans has unquestionably improved as such popular habits in the West as visiting shopping centers and spending money have become a favored practice. Now, with the recession becoming a more international phenomena, not surprisingly many new projects are being put on hold or cancelled entirely, just like, well - here in the U.S. It just goes to show you that recessions do not observe boundaries and regional economies are sometimes not so regional. Even the typically American problem of getting financing has been exported to the EU and surrounding areas.
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