The investment arm of Kuwait’s social-security system bought a luxury apartment building in Manhattan’s Noho neighborhood, as demand for multifamily properties surges, two people with knowledge of the deal said.
Wafra Investment Advisory Group Inc. last week completed the purchase of 2 Cooper Square, a 144-unit building that includes a rooftop pool, video-game center and private movie- screening room, said the people, who didn’t disclose the price and asked not to be named because the deal hasn’t been made public. The owner was Atlantic Development Group LLC, a Manhattan-based builder that finished the tower in 2010, according to the property website.
“The rental market is so competitive in New York and newer buildings are going to be the most competitive,” Ben Thypin, director of market analysis for Real Capital Analytics Inc., said in an interview.
Read More: http://www.bloomberg.com/news/2012-01-31/kuwaiti-social-security-fund-buys-luxury-apartment-building-in-manhattan.html
Grave dancers are slipping into Seattle and picking up office properties on the cheap by buying distressed debt, a dynamic that could spark a flurry of deals for downtown office buildings.
Targets of these opportunistic investor groups are borrowers who bought when the market was hot five years ago and who have now either defaulted or are struggling to repay loans on properties whose values have tumbled in the economic downturn.
In some cases, investor groups are also forced to buy debt instead of property when they are unable to find suitable real estate on the market.
“The people who are buying debt would be interested in buying the property outright, but that is not a viable option in some cases,” said Ben Thypin, director of market analysis at New York real estate research firm Real Capital Analytics.
Grave-dancer investment is hard to track, Thypin said. “The debt-buying market is very opaque,” he said.
Read More: http://www.bizjournals.com/seattle/print-edition/2012/01/27/debt-drives-a-rash-of-office-deals.html?page=all
When it comes to the commercial- mortgage bond market these days, location is everything.
From Webster, Texas to Providence, Rhode Island, borrowers in the U.S. are coming up short, unable to get new loans as about $59 billion in mortgages packaged into bonds comes due in 2012, according to data compiled by Bloomberg. In contrast, $930 million has been refinanced on two New York skyscrapers in the past month; Vornado (VNO) Realty Trust’s Park Avenue tower and Sheldon Solow’s 9 West 57th Street, home to Chanel SA and KKR & Co.
Insurers and international banks have zeroed in on lending to the strongest borrowers in the best markets since 2010, according to Ben Thypin, director of market analysis for Real Capital Analytics, a New York-based research firm. While appetite for so-called trophy assets will continue in 2012, some lenders may push into smaller markets, he said.
“One of the big questions this year is whether or not the trickle of activity we saw move into secondary and tertiary markets in 2011 becomes more of a flood,” Thypin said. “The economy is a big determining factor.”
Read More: http://www.bloomberg.com/news/2012-01-24/no-takers-for-texas-as-new-york-city-trophies-find-refinancing-mortgages.html
Related Companies, the US property developer and manager which recently entered the fund management business, will announce the close of its first distressed asset fund with equity commitments of $825m.
The Related Real Estate Recovery Fund, which exceeded its target of $750m, is among the biggest US commercial real estate vehicles raised in 2011 and the largest investment fund run by a property developer, according to Preqin, the alternative investment research group.
Ben Carlos Thypin, director of market analysis at Real Capital Analytics, said there was $178bn worth of distressed commercial property in the US. “That pile of existing trouble, combined with all of the properties that are worth less than the amount owed on loans they have coming due in the next few years should provide ample investment opportunities for distressed property funds,” he said.
Read More: http://www.ft.com/intl/cms/s/0/538a7a72-438c-11e1-9f28-00144feab49a.html#axzz1kIHQi0SI
By Ben Carlos Thypin
Acquisition activity for student housing has returned to near peak levels, with $2.2 billion in volume transacted during 2011.
That total is up 40 percent compared to 2010 and nearly quintuples total sales volume from 2009. While activity in the sector is still 16 percent below its 2005 peak of $2.5 billion in sales volume, progressive increases in quarterly sales volume during 2011 bode well for a robust transaction environment in 2012.
Read More: http://studenthousingbusiness.com/industry-voices/1873-letting-the-facts-speak.html
The Kushner Companies’ purchase in 2007 of 666 Fifth Avenue, an aluminum-clad office tower in Midtown Manhattan, for a record price of $1.8 billion is considered a classic example of reckless underwriting. The transaction was so highly leveraged that the cash flow from rents amounted to only 65 percent of the debt service.
As many real estate specialists predicted, the deal ran into trouble. Instead of rising, rents declined as the recession took hold, and new leases were scarce. In 2010, the loan was transferred to a special servicer on the assumption that a default would occur once reserve funds being used to subsidize the shortfall were bled dry.
But the story may yet have a happy ending for Kushner, a family-owned business that moved its headquarters from Florham Park, N.J., to 666 Fifth, its first acquisition in Manhattan.
Instead of foreclosing on the 39-story building, which stretches from 52nd Street to 53rd Street, the lenders agreed last month to reduce the principal and defer some of the interest payments on the interest-only loan and extend its maturity for two years, until February 2019. In exchange, Kushner and its powerful new partner in the deal, Vornado Realty Trust, agreed to pour tens of millions of dollars into the building to improve its leasing prospects. The 1.5-million-square feet office building is currently 30 percent vacant.
The modification of the Kushner loan reflects a larger confidence in the city’s long-term future as a financial center. While many commercial mortgages across the country are still in trouble — and more distress is expected — those in New York City are in better shape.
Of the $11.8 billion in commercial loans in Manhattan that were classified as troubled since 2008, just $3.4 billion, or 29 percent, remains in distress, said Ben Carlos Thypin, the director of market analysis for Real Capital Analytics, a New York research firm. About $3.5 billion in loans — covering 14 buildings, including 666 Fifth Avenue, 3 Columbus Circle and 280 Park Avenue — have been restructured.
Read More: http://www.nytimes.com/2012/01/18/realestate/commercial/the-kusher-companies-deal-for-666-fifth-avenue-avoids-foreclosure.html?_r=1
The deal represents the latest in a series of acquisitions over the past two years, as the New York hotel market continues to recover from the crash.
Ben Thypin, director of market analysis at Real Capital Analytics, said he expects to see additional interest from investors.
“There’s only so many high-end hotels [like Park Central] near Central Park out there,” Thypin said. “Hotels like this are going to continue to see a lot of interest both from investors and travelers.”
Read More: http://therealdeal.com/blog/2012/01/03/park-central-hotel-sells-for-396-2m/
Prediction: “In 2011, we expect hotel deal volume to increase by 90 to 130 percent over last year’s levels… the increase in transaction volume [is due to] the dramatic recovery in revenue per available room, or revpar, continued improvement in the debt markets, investors’ intention to sell assets before the 2007-2012 loan terms expire, and currency movements.”
Soothsayer: Arthur Adler, CEO-Americas for Jones Lang LaSalle Hotels.
Verdict: Thumbs sideways, but pointing slightly up. Hotels traded at an even quicker pace than Adler anticipated, according to Real Capital Analytics’ Ben Carlos Thypin. “[Real Capital] tracked over $3 billion in hotel deal volume in Manhattan in 2011 and the finalized total may be higher. While JLL’s prediction ended up being a little conservative, their rationale for predicting such a dramatic increase was right on the money,” Thypin told The Real Deal.
Read More: http://therealdeal.com/blog/2012/01/03/who-got-it-right-and-who-got-it-wrong-in-predicting-the-2011-market/
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.