Hawaii is seen nationally as one of the troubled hotel loan hotspots, with no less than a dozen hotels in some stage of distress. Real Capital Analytics, a New York-based commercial real estate research firm, has identified $2.09 billion of troubled hotel loans in the Aloha State.
The average debt per property is $174.4 million, the highest nationally. The next highest state on Real Capital’s list is Nevada, where distressed loans average about $32 million less than in Hawaii.
Ben Thypin, a Real Capital senior market analyst, says Hawaii’s status is a function of the value and size of hotels here, not because of the number of properties involved. Nevada, for example, has 59 hotels where financial woes have checked in, while California has 239.
Nonetheless, Hawaii hotels are on the list and are part of the $32.3 billion of distressed-hotel debt nationally. Thypin says it will most likely take years for the situation to resolve as owners, lenders, special servicing agents, receivers and lawyers huddle.
Read More: http://www.hawaiibusiness.com/Hawaii-Business/February-2011/Hawaii-Hotels-in-Foreclosure/
With Penzance out of the picture, Garrison and other lenders on the original deal began battling for control of the properties. The fight, which is now playing out in legal arguments before the New York State Supreme Court, exhibits the ongoing influence Wall Street debt owners have over Washington-area properties as owners work to emerge from the recession.
Garrison, though not the main lender on the buildings, used Penzance's default to take control of ownership last fall. Ben Thypin, senior market analyst at research firm Real Capital Analytics, said Garrison "took over the properties with the intention of holding them."
As new owner of the buildings, however, Garrison assumed the $107 million mortgage that Penzance had taken out and almost immediately was asked to pay up by lenders higher in the food chain -- igniting a battle for distressed assets that commercial real estate professionals commonly refer to as "tranch warfare."
Read More: http://www.washingtonpost.com/wp-dyn/content/article/2011/01/28/AR2011012806054.html
The deal is rocket fuel for South Florida’s sputtering commercial sales market, helping bolster sales volume last year by 169 percent, to $2.6 billion, according to data from Real Capital Analytics. It also speaks to South Florida’s appeal to large institutional investors, according to Ben Thypin, senior market analyst at Real Capital Analytics.
“This is a sign of confidence in the South Florida market,” he said. “They are trying to take advantage of depressed pricing.”
Read more: http://www.bizjournals.com/southflorida/print-edition/2011/01/28/duke-closes-on-premier-properties.html
Ben Thypin, a senior market analyst with Real Capital Analytics, believes in particular that markets that did not get “overheated” during the boom will likely squeak through now with commercial properties intact and unforeclosed. Many lenders opted in 2009 and 2010 to “extend and pretend” on troubled loans, essentially banking on their being a way to resolve delinquent accounts or settle up with borrowers later once the commercial market had bottomed out. Now that most experts are predicting that there will not be a “double dip” in the commercial sector, lenders, buyers and borrowers are starting to move on these types of resolutions.
Read More: http://rejournalonline.com/commercial-foreclosures-to-be-the-exception-in-2011/853376/#_ftnref1
Ben Thypin, senior market analyst for New York-based Real Capital Analytics, agrees.
"Lenders have a lot of assets in trouble, and they're trying to prioritize and figure out what is worth holding onto and what needs to be dumped now," Thypin said.
"It will take years to work off all the distressed inventory."
That doesn't necessarily mean the other shoe is dropping, Thypin said.
"Lenders are actually a lot more optimistic than they were last year."
Read More: http://www2.tbo.com/content/2011/jan/20/201751/largest-block-of-commercial-space-in-pinellas-goes/news-breaking/
“This validates both the Brookfield and Fairholme strategy in being investors,” said Ben Thypin, senior market analyst at Real Capital Analytics Inc., a New York commercial real estate data firm. “I don’t think there’s a reason to sell now unless they’re set to make a good profit.”
Read More: http://www.businessweek.com/news/2011-01-18/fairholme-to-sell-general-growth-stake-to-brookfield.html
“As general hotel financing improved over the past three months and will going forward, there is going to be more competition for big deals,” said Ben Thypin, an analyst at Real Capital Analytics Inc. in New York. “You want to be buying now, not in two years, when you should probably be selling. But with Sunstone there’s even more pressure because they are public and have a responsibility to shareholders to act.”
Read More: http://www.bloomberg.com/news/2011-01-13/sunstone-plans-to-buy-1-billion-of-hotels-this-year-after-prices-decline.html
Institutional investors are once again scouring the hard-hit Atlanta real-estate market for bargains. In another recent deal, Parkway Properties Inc. last month said it was on track to buy the office and retail portion of the 50-story tower at 3344 Peachtree Road for about $346 a square foot in one of the priciest office-building sales Atlanta has seen in years.But that building is located in Atlanta's tony Buckhead section and is 93% leased. The price being paid in the Atlantic Station deal reflects relatively weak demand for properties that are a bit more challenged.
The 25-story office building is only 40% occupied. Since its completion in 2009, it has struggled to compete for tenants in a fiercely competitive market where the third-quarter office-vacancy rate of 20.8% hovered near a 25-year high, according to Reis Inc., a real-estate research firm. The retail complex is about 88% leased, although Mr. Maddocks says there are a number of expiring leases and some of the tenants aren't paying rent.
"That someone is willing to shell out this kind of money is certainly not bad news, but I'm not sure it implies any blessing on the Atlanta market," says Ben Carlos Thypin, a senior market analyst with Real Capital. "There's still a lot of pain."
Investor wariness of Atlanta is reflected by relatively low sales activity. The combined volume of retail and office sales in the Atlanta region rose just 6% last year to $901 million, from $846.8 million in 2009, according to Real Capital. By comparison, investment sales of retail and office properties in New York and its suburbs more than tripled to $7.4 billion last year from $2.3 billion a year earlier.
Read More: http://online.wsj.com/article/SB10001424052748704515904576076150512000910.html?mod=googlenews_wsj
Chinese purchases jumped to $127 million last year from $18 million in 2009, Real Capital says, including a $46 million deal by SouFun Holdings Ltd. of Beijing to buy a Lower Manhattan building once owned by insurer American International Group Inc. The report doesn’t include purchases through property funds, a route that Chinese buyers prefer, said Ben Carlos Thypin, a senior market analyst at Real Capital.
“They are investing through conduits a lot of the time,” Thypin said. “The fund investment market is much more opaque.”
Read More: http://www.bloomberg.com/news/2011-01-03/cic-backs-manhattan-tower-as-china-steps-up-u-s-real-estate-investments.html
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.