than Obama. That survey, released in September, was conducted by the global law
firm DLA Piper.
And as change comes to Washington, DC, the most critical issue in the
first few months is to fix the nation’s
economy.—Natalie Dolce
CRE INDUSTRY TACKLES
TROUBLES WITHOUT TARP
One of the factors driving down the prices
of commercial mortgage-backed securities
recently—along with the uncertain economy and the frozen credit markets—has
been disappointment by some holders of
CMBS that the government has thus far
chosen not to employ its Troubled Asset
Relief Program to buy distressed real-estate
assets from shaky financial institutions.
That could change, of course, if the current administration changes its mind or
the new administration chooses to change
the way that TARP funds are applied.
Regardless of whether the government
decides to buy or not buy distressed commercial assets, however, the commercial
real estate industry is gearing up to service
those troubled loans and properties—
which it is going to have to do with or
without TARP funds in the mix. “Even if
TARP were to buy these assets, regardless
of whether it bought debt or hard assets or
both, somebody has to service those properties and those loans,” observes Conrad
Andersen, senior vice president of global
client solutions in the Newport Beach office of Grubb & Ellis Co.
Andersen is one of the leaders of a
new Grubb & Ellis unit called the financial services asset management practice
that the Santa Ana-based company has
formed to serve financial institutions,
special servicers and government agencies with troubled assets. He says that
the effect of the government’s decision
not to apply TARP funds to commercial
assets right now is neither positive nor
negative but “neutral” for the commercial real estate industry.
Andersen explains that, hypothetically,
“If the government did acquire hard assets from financial institutions, it would
help to provide more liquidity in the
capital markets, and that could certainly
have an impact on commercial real estate
markets.” However, that’s only a supposition because, since Andersen points out,
the rate of defaults on CMBS and other
commercial loans right now is still not
very significant. “At this point, it’s more of
a trickle,” Andersen says.
Trends suggest, however, that the default rates on commercial loans are going
to increase significantly, primarily in the
hospitality, retail and office sectors. That’s
one reason that Grubb & Ellis and other
real estate services companies, as well as
law firms and other professionals who
serve the industry, have been gearing up
to provide services for financial institutions and other clients who are likely to
face problems with troubled assets.—Bob
Howard, GlobeSt.com
ORANGE COUNTY
Bacchus Sells Out
331,000-SF Project
At Irvine Spectrum
Bacchus Development has sold the last of
the units at its 331,000-square-foot Bacchus
Office Park and is recording steady sales at
two other projects in Irvine. Michael Vukovich of the Irvine-based development
firm says that with the closing out of Bacchus Office Park, the company has now
developed more than one million square
feet over the past five years at five projects
in the Irvine Spectrum.
Prices for the Bacchus Office Park
TOP OF THE MARKET Powered by GlobeSt.com
Southern California's biggest deals from Oct. 20 to Nov. 12, 2008, arranged by sector. The URL will bring you to the full story.
SECTOR DEAL
URL
TERMS
DEALMAKERS
LEASING
Union Bank of California, 345,000-sf lease, Union Bank Plaza. globest.com/resocal/12_08/1.html $3.24 per sf/per month Cushman & Wakefield and Hines
Keenan & Associates, 95,000-sf renewal
globest.com/resocal/12_08/2.html
$30M
Cushman & Wakefield
PURCHASES Watson Land Co., 266,780-sf warehouse/distribution property globest.com/resocal/12_08/3.html $117 per sf
Eastdil Secured and the Klabin Co.
Inland American Real Estate Trust,
654-room Hyatt Regency Orange County
globest.com/resocal/12_08/4.html $112 million
Molinaro Koger
DEVELOPMENT Port of Los Angeles unveils 400-acre Waterfront Project
globest.com/resocal/12_08/5.html Undisclosed
Port of Los Angeles
City of Ontario, Citizens Business Bank Arena
globest.com/resocal/12_08/6.html
$150M
AEG and City of Ontario
FINANCE
Emmett Fund Inc. contributes to Douglas Emmett Fund X LLC globest.com/resocal/12_08/7.html Up to $1B in equity Douglas Emmett Inc.
