Archive for the ‘Finance’ Category
by David Bodamer May 16th, 2007
Feldman Mall Properties has reported its delayed year-end earnings, putting to rest any lingering questions about the company’s performance.
Most importantly, the company reported net income for the year ended December 31, 2006 of
$20.2 million, or $1.54 per diluted share, as compared to a net loss of $2.6 million, or $0.21 per share for the year ended December 31, 2005. Meanwhile, its fourth quarter FFO of $0.18 per share was in-line with the company’s guidance of $0.18 to $0.20 per share and in-line with analysts’ expectations. Full-year FFO was $0.80 per diluted share, up from $0.78 per diluted share in 2005.
Already, analysts from both RBC Capital Markets and Friedman Billings Ramsey issued reports judging the results sound and both expressed optimism about the progress the company is making in repositioning its portfolio.
The company also has said it will take steps to avoid future late filings, which Retail Traffic reported on last month.
Specifically, the company’s release states:
The Company lacked the sufficient number of personnel to ensure that the financial statements were prepared on a timely basis. As a result, the Company was unable to adequately complete its necessary procedures on time. The lack of sufficient personnel caused delays in the review and approval of supporting documents and journal entries necessary to prepare our financial statements on a timely basis in accordance with regulatory guidelines. At the beginning of 2007 management commenced hiring and training additional personnel to correct this material weakness.
As for its results, Newsday provides a good summation:
Feldman Mall Properties of Great Neck, a real-estate investment trust, said Tuesday it lost $1 million in the fourth quarter, compared with a loss of $2.1 million in the same period last year.
The company said that on a per-share basis, it lost 8 cents in the fourth quarter, compared with 17 cents in the year-ago quarter.
Feldman said funds from operations, a commonly used measure of financial results in the REIT industry, were $2.7 million in the last three months of 2006, compared with $2.1 million in the final three months of ‘05. The company’s FFO was 18 cents a share in the fourth quarter, compared with 15 cents in the corresponding period a year ago.
For the full year, Feldman said its FFO totaled $11.7 million, or 80 cents a share, compared with $10.9 million, or 78 cents a share for the full 2005 year.
The company’s net income for the full 2006 was $20.2 million, or $1.54 a share, against a net loss of $2.6 million, or 21 cents for all of 2005.
Feldman said that the results for 2006 include a $29.4 million gain on the partial sales of the Foothills Mall.
Related Topics: Finance, News, REITs, Retail Real Estate |
by David Bodamer April 26th, 2007
Colonial Properties Trust has been working on it for years, but it appears it has found a way to sell off its remaining office and retail assets.
It is working with DRA Advisors, which over the years has been a frequent partner with Developers Diversified Realty Trust.
Real estate investment trust Colonial Properties Trust said Thursday it sold its interests in 26 office and 11 retail properties to two separate joint ventures for an undisclosed amount.
The REIT will keep a 15 percent interest in each of the joint ventures, while the partners — OZRE Retail LLC and a fund managed by DRA Advisors LLC — will hold the remaining interests. The company also said it will continue to manage and lease the properties.
As a result of these deals, Colonial Properties expects to pay out a special dividend of about $10.75 per share if approved by the company’s board. The company also said it expects to reduce its annualized dividend rate to between $2.05 per share to $2.15 per share, from $2.72 per share, beginning in the third quarter.
Related Topics: Finance, Investment, News, REITs, Retail Real Estate |
by David Bodamer April 19th, 2007
Two months after selling Equity Office Properties to Blackstone for $39 billion and in the middle of his attempt to acquire the Tribune Co., Sam Zell addressed a REIT symposium at New York University. There he predicted real estate would remain strong for at least two more years.
Speaking from notes and sporting his trademark business casual attire – a corduroy jacket over a striped shirt with the top two buttons open – Zell leaned over the podium as he walked listeners through 20 years of real estate market history. He opened with an anecdote about a 1984 Texas bumper sticker: “Please, God, give us one more oil boom. We won’t screw it up this time.”
He said the real estate market might as well have printed similar stickers – and that the industry did get its hoped-for boom. And though prognosticators have suggested that the market has peaked, he said the short-term outlook remains strong.
Related Topics: Finance, Investment, News, Trends |
by David Bodamer February 6th, 2007
NREI Online has a longer report about the 2006 volume of commercial mortgages. In total, it looks like the industry hit a new record, topping 2005. Retail volumes, though, were down.
The good news for mortgage bankers is flowing as fast as the capital these days.The good news for mortgage bankers is flowing as fast as the capital these days. Commercial/multifamily mortgage originations rose 3% in the fourth quarter of 2006 over the same period a year earlier, and total annual volume is expected to surpass the previous record of $201 billion set in 2005, according to the Mortgage Bankers Association.
The combination of an abundance of capital, improving property markets and innovative financing vehicles such as commercial-debt obligations (CDOs) are boosting lending volume to unprecedented heights, says Jamie Woodwell, MBA’s senior director of commercial and multifamily research.
“There are a number of fronts parked over the commercial/multifamily world that are leading us to some pretty calm seas,” says Woodwell. The researcher’s remarks came during a media luncheon at the Marriott hotel in downtown San Diego on Monday as part of MBA’s annual commercial/multifamily convention. The event has drawn about 5,000 attendees.
Related Topics: Conference Coverage, Finance, News |
by David Bodamer February 5th, 2007
The Mortgage Bankers Association is still computing final numbers, but preliminary results indicate that loan volume on retail real estate fell in the fourth quarter of 2006.
According to an MBA statement:
Commercial and multifamily mortgage bankers’ loan originations in the fourth quarter were three percent higher than during the same quarter last year. … The increase in commercial/multifamily lending activity during the fourth quarter was driven by increases in originations for hotel properties, offices, industrial and multifamily. When compared to the fourth quarter of 2005, the overall increase included a 20 percent increase in loans for hotel properties, an 8 percent increase in loans for office properties, a 3 percent increase in loans for industrial properties and a 2 percent increase in loans for multifamily. Lending for retail properties saw a 5 percent decrease and health care properties saw a decrease of 7 percent.
Related Topics: Conference Coverage, Finance, News, Retail Real Estate |
by David Bodamer February 5th, 2007
As part of Retail Traffic’s continuing conference coverage, we will be providing updates from this week’s CREF/Multifamily Housing Convention & Expo 2007 being hosted by the Mortgage Bankers Association in San Diego.
One of the hot topics at the show is insurance. This year marks the expiration of the latest version of the Terrorism Risk Insurance Act. Beyond that, there are also concerns about the availability of wind and flood insurance—especially with disputes and hefty payouts still being resolved from 2005’s killer hurricane season.
There have been a lot of conflicts concerning the damage caused by hurricanes and whether it was caused by wind or water. That’s important because it affects who is responsible for recouping the property owner. In addition, with more big storm seasons expected, insurers have been reluctant to provide insurance in coastal markets.
The loss of any of these types of insurance threatens to put mortgages into default and putting a crimp on what continues to be a booming industry. As it stands, 2006 is expected to be a record year for originations. (MBA is still computing final numbers.)
No one wants the party to end because of an issue like insurance. So 2006 promises to be a big year as real estate and insurance groups push for an extension of TRIA and for some kinds of similar backstop or legislation to make wind and flood insurance more available and affordable.
Related Topics: Conference Coverage, Finance, Management & Leasing, News, Retail Real Estate, Trends |
by David Bodamer January 18th, 2007
There’s an update on the Mills being acquired by Brookfield, from thefirst report.
One of the big questions about the proposed acquisition is why its happening now. But as the report illustrates (which first appeared on our sister site NREI Online), a looming debt deadline played a big part in Mills reaching an agreement.
But the saga isn’t over yet. Gazit-Globe, which has been pursuing Mills aggressively since October, upped its recapitalization offer after the Brookfield deal was announced. That means that Mills could change its mind on Brookfield or that Brookfield may eventually be forced to increase its $21 per share offer for the beleagured REIT.
Gazit-Globe, which owns about 9 percent of Mills stock, originally offered Mills $1.2 billion in October, proposing to buy Mills stock and extend the firm new lines of credit. Then on Tuesday-the day before the Brookfield deal was announced-Gazit upped its offer to $21 per share, amounting to $1.8 billion in acquiring stock and new debt, including an offer to refinance the Goldman Sachs loan. Another shareholder, Farallon Partners, which holds 10.9 percent of all Mills shares – offered to buy $499 million of new Mills stock, offering $20 per share. (In October, Farallon had entered into a standstill agreement with Mills.)
Either of the offers could have helped to solve Mills most pressing problem – a March 31 deadline to pay a $1.06 billion mortgage loan from lenders represented by Goldman Sachs Mortgage Co. Farallon’s equity was to have been augmented with CMBS proceeds to pay down the loan, while a Gazit-Global share purchase would have paid down the debt and been coupled with a refinancing of the remaining balance with the Royal Bank of Canada.
Related Topics: Finance, Investment, News, REITs, Retail Real Estate |
by David Bodamer January 8th, 2007
Commercial real estate financiers are getting a lot of mileage out of their newest toy–commercial real estate collateralized debt obligations. Everyone at the show calls them CRE CDOs. (It rolls off the tongue easier the more you practice saying it.) The final data for 2006 presented at CMSA’s CMBS Investor Conference shows that CRE CDO issuance grew to $34.3 billion in 2006–a 62 percent gain from 2005 and more than four times the volume of issuances in 2004. (Robert Ricci, managing director for Wachovia Securities projects 2007 volume to reach $60 billion)
There are a lot of differences between CMBS and CDO–too many to try and encapsulate here. The key difference is that issuers have the option to actively manage the pool of assets inside CRE CDOs. They can cycle loans in and out, change property types, change geographic distribution (all within limits, of course). Issuers are also not limited to fixed-rate mortgages. It can include that, but more commonly includes floating rate debt of all stripes. Managed pools can also include REIT and REOC debt, mezzanine financing, preferred equity and other derivatives. Another difference is that unlike with CMBS issuances, sponsors can (and often do) retain ownership of some of the pool.
From a sponsor standpoint, it seems to be an attractive option and CRE CDOs promise to play a growing role in provding financing for the commercial real estate sector. And, because the pools are actively managed, sponsors can charge higher fees–as high as 45 basis points compared with 20 basis points for CMBS.
Despite the explosion in CRE CDO issuances, it does have a long way to go to catch up to the popularity of CMBS. CMBS issuances reached $299.2 billion in 2006–a $60 billion gain over 2005 and more than double 2004’s volume of $128 billion.
Related Topics: Conference Coverage, Finance, News, Retail Real Estate |
by David Bodamer January 8th, 2007
When covering retail real estate and largely talking to professionals that specialize in this sector, it’s easy to get caught up in the view that retail will continue to roll along. Sure, there will be some blips and most investors and developers think that retail is not going to see the same kind of growth in 2007 that it has in previous years. It’s no longer the leading light in commercial property circles either. But for the most part the mood is optimistic.
But stepping into a different circle and hearing what a different group of investors and financiers have to say provides a stark contrast. At the Commercial Mortgage Security Association’s CMBS Investors Conference in Miami, a gathering of investors, servicers, sponsors and other professionals involved in securitizing real estate debt, a morning panel discussed the prospects for commercial real estate in 2007. Retail didn’t fare well.
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Related Topics: Conference Coverage, Finance, Investment, News, Retail Real Estate, Trends |
by David Bodamer January 5th, 2007
Traffic Court will be hitting the road this weekend. Check here next week for live reports from the Commercial Mortgage Securities Association’s annual CMBS Investors Conference being held January 7-9 in Miami, Fla.
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Related Topics: Conference Coverage, Finance, Investment, News |
