Archive for September 17th, 2008
by David Bodamer September 17th, 2008
The likely rush to sell is driving down the already battered market, forcing financial firms to take additional losses on the estimated $150 billion worth of commercial real-estate debt on their books as the once relatively resilient pocket of the property sector now comes under heavy fire.
“As a result of Lehman’s bankruptcy, other financial institutions will feel more pressure to sell assets at deeper discounts sought by investors,” said Spencer Garfield, a managing director of Hudson Realty Capital, a New York-based real-estate fund manager.
Goldman Sachs Group Inc. on Tuesday said it had reduced its portfolio of commercial mortgages and securities by about $2 billion to $14.7 billion as of the end of its third quarter, which ended Aug. 29, taking a $325 million loss.
“It sure doesn’t feel like the real-estate markets are improving anytime soon, and we will reduce that class going forward even if we think they are good assets,” said Goldman Sachs Chief Financial Officer David Viniar. “Those assets are marked where they can be sold.”
Link.
Hat tip to Deal Junkie for spotting this.
Related Topics: Finance, Investment, News, Retail Real Estate, Trends |
by David Bodamer September 17th, 2008
I typically don’t link to stories that are so macro-economic and afield from commercial real estate, but the headline says it all. Wow.
Three-month bill rates may be the lowest since April 1934, when they declined to 0.15 percent, based on monthly figures on the Fed Board of Governors’ Web site. Daily figures go back as far as 1954.
Reserve Primary Fund, the oldest U.S. money-market fund, yesterday became the first in 14 years to expose investors to losses after writing off $785 million of debt issued by Lehman.
Shareholders pulled more than 60 percent of the fund’s $64.8 billion in assets in the two days since Lehman folded. Losses on the securities firm’s debt forced the fund to break the buck, meaning its net asset value fell below the $1 a share price paid by investors.
“The panic going round the money market world is what they’ve been investing in is not as safe as they thought it would be,” said Dominic Konstam, the head of interest-rate strategy in New York at Credit Suisse Securities USA LLC, another primary dealer. “If the banks don’t want to lend to each other they don’t want to lend to the banks. That means where else are they going to put their money — they’re going to put it in T-bills for safety.”
Related Topics: Finance, Investment, News |
by David Bodamer September 17th, 2008
Build-A-Bear Workshop Inc. said it plans to close friends 2B made concept, a line of make-your-own dolls, and expects related charges in the third and fourth quarters, and through the third quarter of fiscal 2009, sending its shares down as much as 14 percent.
“With the slowdown in consumer spending, particularly for discretionary products, we believe the best strategic course for the company is to continue to focus our primary efforts on building our Build-A-Bear Workshop,” Chief Executive Maxine Clark said in a statement.
The stuffed-toys retailer has operated 9 friends 2B made stores with little fanfare since the fourth quarter of 2006, so its action was not a surprise, Stifel Nicolaus & Co Inc analyst David Schick said in a note to clients.
Link.
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by David Bodamer September 17th, 2008
Discount clothing chain Steve & Barry’s has begun final liquidation sales at the 103 locations it will be closing following its takeover last month by BHY Holdings LHC, an affiliate of investment firms Bay Harbour Management and York Capital Management.
Steve & Barry’s LLC, based in Port Washington, N.Y., filed for Chapter 11 bankruptcy protection in July after ambitious growth plans were hurt by slower consumer spending and the credit squeeze.
A bankruptcy court approved the $163 million acquisition in August. Under terms of the deal the company is closing nearly half its locations to operate with a smaller base of 173 stores, in an effort to achieve profitability.
Final liquidation sales have begun at the closing locations and the last day of sales for 24 stores will be Sept. 24. Other stores will close soon after.
The company still plans to open a retail location in New York ”over the next few months”, but no other new stores are planned.
Link.
Related Topics: News, Retail, Trends |
by David Bodamer September 17th, 2008
A possible deal for Linens ‘n Things has evaporated. Now the company may face liquidation, possibly not even surviving the holiday shopping season.
Cerberus Capital Management last week abandoned a prospective plan to buy the struggling home-furnishings chain, which filed Chapter 11 in May after being taken private for $1.3 billion in 2005 by billionaire Leon Black’s Apollo Capital Management, sources said.
In turn, Linens ‘n Things may take liquidation bids as soon as mid-October, paving the way for chainwide going-out-of-business clearances in November and December, sources said.
For six weeks, buyout giant Cerberus had been weighing a plan to scoop up the chain at a rock-bottom price, downsize it and return it to profitability, sources said.
Link.
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by David Bodamer September 17th, 2008
It’s been hard not to get focused on the saga on Wall Street. But there is other news going on in the industry.
On Friday, Walgreen launched a surprise counteroffer for Longs Drugs, which CVS had previously agreed to acquire.
Now, Longs has rejected the offer from Walgreen and continues to recommend the CVS bid to its shareholders.
Related Topics: Investment, News, Retail |
Real Estate Roundtable Applauds AIG Move
by David Bodamer September 17th, 2008
Here’s a very brief statement from the Real Estate Roundtable Real Estate President and CEO Jeffrey D. DeBoer on the bailout of AIG, the latest major move to stabilize the financial system.
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