Structural constraints on the delivery of new supply in a given market reduce an owner’s competition for tenants, which may lead to higher occupancy, higher rent levels, stronger rent growth and higher capital values over time...
The ripple effects from the Lehman Brothers bankruptcy filing in September 2008 are still being felt across the commercial real estate industry. This past December, Lehman Brothers Holdings Inc. sold the general partnership interests of two of its...
Sometimes being first on the scene is a good thing. Other times it is better to trail the first responders. When purchasing the assets of a distressed company under Section 363 of the Bankruptcy Code, there are advantages and drawbacks to both...
Becoming involved with a distressed asset is like deciding to read "War and Peace", but discovering that your copy of the book starts on page 400. It takes a lot of catching up. Getting to know the asset’s history and stakeholders, and the...
Many market observers have pointed out similarities between the current downturn in commercial real estate and the downturn in the early 1990s. Both were preceded by an extended period of relaxed underwriting standards, excess capital chasing...
When commercial property loans go into default, how much can lenders reasonably expect to recoup from asset dispositions or the sale of mortgage notes? A new study from Real Capital Analytics (RCA) reveals that recovery rates on defaulted...
The cap rate spread over the 10-year Treasury yield is normally positive, reflecting the additional risks inherent in real estate assets (Exhibit 1). The risk premium is generally considered necessary to compensate for liquidity, leasing and...
