Macroeconomia Immobiliare USA (residenziale e commerciale) e finanza strutturata

[Imark]

Ed intanto i prezzi del Commercial real estate USA continuano a sgonfiarsi, nonostante i tassi ai minimi storici... nota consolatoria: i prezzi sono il portato di deals conclusi alcuni mesi fa, quando la situazione ed il sentiment erano peggiore di quelli attuali per via del crollo dei valori azionari...

[FONT=verdana,arial,helvetica]Moody's: U.S. Commercial Real Estate Prices Fall 8.6% in April[/FONT]

[FONT=verdana,arial,helvetica]New York, June 22, 2009 -- Commercial real estate prices as measured by Moody's/REAL Commercial Property Price Indices (CPPI) decreased 8.6% in April, leaving the index at 25.3% below its level a year ago and 29.5% below the peak in prices measured in October 2007.[/FONT]

[FONT=verdana,arial,helvetica]Moody's says the large negative return for April likely reflects in part the fact that deals closed during that month were negotiated at the end of 2008 and in the first quarter of 2009, when securities markets and overall sentiment were plunging.[/FONT]

[FONT=verdana,arial,helvetica]"The size of April's decline, following a 5.5% decline in January, also suggests that sellers are beginning to capitulate to the realities of commercial real estate markets," says Moody's Managing Director Nick Levidy. "While loss aversion is no doubt still in play with many owners, more distressed sales appear to be occurring, resulting in more negative returns and causing larger drops in the index." [/FONT]

[FONT=verdana,arial,helvetica]Overall sales volume in the market also fell in April as compared to March, and by count April had the lowest number of transactions in the history of the CPPI. [/FONT]

[FONT=verdana,arial,helvetica]In the Eastern region, the CPPI shows prices for all four property types declining over the last year, but with apartment prices holding up best. These have declined 11.8% from a year before, compared with drops of 15.9% for industrial properties, 27.2% for offices, and 21.5% for retail.[/FONT]

[FONT=verdana,arial,helvetica]Overall, the South has been the worst performing region over the last year. All four property types have seen annual declines of more than 20%, with industrial properties falling the most, with a decline of 28.8%.[/FONT]

[FONT=verdana,arial,helvetica]The indices also show that all four property types have performed worse in Southern California than they have in the Western region as a whole. In Southern California, the office market has been the worst performer, with prices dropping 22.2% in the last year.[/FONT]

[FONT=verdana,arial,helvetica]The three major office markets -- New York, San Francisco, and Washington DC—have all posted significant annual declines. The San Francisco office market saw a drop of 20.3%, while New York had a decline of 12.9% and Washington 21.1%, both less than the yearly decline for the Eastern region of 27.2%.[/FONT]

[FONT=verdana,arial,helvetica]Moody's notes the Florida apartment market, like the apartment market in the South as a whole, has experienced three straight years of falling prices. Florida apartment prices are now down 31% from their peak.[/FONT]

[FONT=verdana,arial,helvetica]The CPPI [/FONT]

[FONT=verdana,arial,helvetica]Moody's/REAL Commercial Property Prices Indices are based on the repeat sales of the same properties across the US at different points in time. Analyzing price changes measured in this way provides maximum transparency and methodological rigor. This approach also circumvents the distortions that can occur with other commercial property value measurements such as appraisals or average prices, says Moody's. [/FONT]

[FONT=verdana,arial,helvetica]The title of this report is "Moody's/REAL Commercial Property Price Indices, June 2009." [/FONT]

 

[paologorgo]

devo ammettere che mi piace molto quello che scrive Zingales (tra gli altri ricordo alcuni suoi articoli su Gm che inquadravano benissimo il problema... ed il suo intervento, mi pare in Senato, post-crack Lehman...) - una sua analisi del comportamento (strategic default) in presenza di valori immobiliari inferiori al debito contratto:

Moral and Social Constraints to Strategic Default on Mortgages

Luigi Guiso European University Institute, EIEF, & CEPR
Paola Sapienza Northwestern University, NBER, & CEPR
Luigi Zingales University of Chicago, NBER, & CEPR

Abstract

We use survey data to study American households‘ propensity to default when the value of their mortgage exceeds the value of their house even if they can afford to pay their mortgage (strategic default). We find that 26% of the existing defaults are strategic. We also find that no household would default if the equity shortfall is less than 10% of the value of the house. Yet, 17% of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50% of the value of their house. Besides relocation costs, the most important variables in predicting strategic default are moral and social considerations. Ceteris paribus, people who consider it immoral to default are 77% less likely to declare their intention to do so, while people who know someone who defaulted are 82% more likely to declare their intention to do so. The willingness to default increases nonlinearly with the proportion of foreclosures in the same ZIP code. That moral attitudes toward default do not change with the percentage of foreclosures in the area suggests that the correlation between willingness to default and percentage of foreclosures is likely to derive from a contagion effect that reduces the social stigma associated with default as defaults become more common

http://www.financialtrustindex.org/images/Guiso_Sapienza_Zingales_StrategicDefault.pdf

 

[paologorgo]

America's Most Endangered Malls

Birmingham's Century Plaza mall was a consumer mecca when it opened in 1971, drawing shoppers from outlying suburbs and even from other states. Over the years, however, people moved outward from central Birmingham, and new shopping centers sprouted around them. Sales at Century Plaza declined. Three of the mall's four big "anchor" tenants eventually left, and smaller retailers followed. By 2008, Century Plaza was a shadowy hulk with more shuttered stores than open ones. Then the last anchor tenant, Sears, announced it was leaving. The mall finally closed for good in early June.

Malls have a natural lifespan, as population centers shift, architecture evolves, and shopping habits change. But a sharp recession is clearly accelerating the demise of vulnerable retailers--and some of the shopping centers they inhabit. Plunging sales are one obvious reason. Many retailers are also saddled with heavy debt taken on in recent years to fund aggressive growth. And the credit crunch has made cash scarce for firms that need it most.
Those tough conditions have already driven retailers like Circuit City, Linens 'N Things, and Steve & Barry's out of business. Other chains are closing stores and slashing costs as they fight to survive. General Growth Properties, a Chicago firm that operates more than 200 malls--and owns the remnants of Century Plaza--declared bankruptcy in April and is working on a restructuring plan.

The churn is transforming America's retail landscape. "During times like this, good malls tend to get better and bad malls tend to get worse," says Steve Sterrett, chief financial officer of Simon Property Group, the nation's largest mall operator. The first sign of trouble is often the departure of department stores and other anchor tenants, especially if those spaces stay vacant. High-quality, name-brand merchants often follow, with discounters--or nobody--replacing them. Shoppers sense the ennui, and gravitate toward malls that feel more vibrant, which only deepens the distress at troubled properties. By some estimates, about 10 percent of the America's malls could close within the next few years.
To gauge which malls are in trouble, U.S. News analyzed data from Green Street Advisors, an investment research firm in Newport Beach, Calif., that specializes in publicly owned real estate companies. Their data includes occupancy rates, sales per square foot, and quality grades for about 650 of America's biggest shopping centers. The average property in the data set has sales of about $420 per square foot and an occupancy rate of 92 percent, good for an A- grade.

The malls at the bottom of the list earn grades of C- or D, with falling sales at many stores and a high proportion of discount retailers that tend to draw the least lucrative consumers. As a rule of thumb, malls with sales of $250 per square foot or lower are struggling. "It's hard for many retailers to be profitable at $250," says Jim Sullivan of Green Street. And nine out of 10 malls at the bottom of Green Street's list have sales at or below that threshold.
The data we used doesn't cover strip malls and other shopping centers owned by private firms, which tend to be smaller, less profitable, and more vulnerable to a bad economy than regional malls. But the following 10 malls still represent bleak snapshots of some of the weakest spots in the nation's retail economy.

Century III Mall, Pittsburgh, Pa. (Occupancy rate: 70 percent; sales per square foot: $200*). About 30 of the 120 stores at this suburban Pittsburgh mall have closed recently, including anchor tenant Steve & Barry's and KB Toys (both of which have declared bankruptcy), Old Navy, Ruby Tuesday's, and Macy's Furniture Outlet. The 30-year-old complex targets value shoppers but competes with nearby discounters like Wal-Mart and Kohl's. Other area malls with more upscale stores are doing better. Century's owner, Simon Property Group, may be looking to sell Century III.
Chambersburg Mall, Chambersburg, Pa. (62 percent; $234). Sales have held steady over the past year, but a bucolic location 60 miles southwest of Harrisburg makes this sleepy mall a perennial underperformer. K.B. Toys, Value City, and B. Moss closed their stores after declaring bankruptcy. Newcomers include discounters like Bolton's and Burlington Coat Factory, which are likely to generate little excitement.
Crossroads Mall, Omaha, Neb. (68 percent; $200*). Shoppers are fleeing this 50-year-old mall in central Omaha for suburban shopping centers that feel safer and more vibrant. The departure of Dillard's in 2008 left one of three anchor slots vacant. The Zales and Gordon's jewelry chains are also gone, along with Gap and most of the mall's food-court restaurants. According to press reports, owner Simon Property Group recently put the property up for sale. A buyer could try to resuscitate the mall or convert it to a different kind of retail or commercial complex.
Hickory Hollow Mall, Nashville, Tenn. (82 percent; $187). Dillard's has left, and other departed tenants include Linens 'N Things and Steve & Barry's, two of the biggest casualties of the recession. Two of four anchor slots are vacant, and the theater recently switched from first-run movies to late-run discount flicks. With a lack of retailers, the mall may convert some of its space to office use. One new tenant: the local police, who recently opened a recruiting station at the mall.
Highland Mall, Austin, Tex. (61 percent; $150*). While gleaming new stores have been springing up in some parts of Austin, this 38-year-old mall along I-35 has struggled to keep stores open--and avoid embarrassing controversies. Anchor JCPenney left in 2006, and this year Dillard's sued the mall's owners, claiming they let the mall become a "ghost town." The owners countersued, claiming that the suit is part of a scheme to help Dillard's get out of its lease early.
Palm Beach Mall, West Palm Beach, Fla. (82 percent; $250*). A year ago, the plan was to renovate this fading 42-year-old property. But that changed with the recession. Anchor tenants Dillard's and Macy's bolted within the last year, and in April, the mall's owners defaulted on a big bank payment, triggering a foreclosure lawsuit that could force the sale of the property. The power company even threatened to shut off the mall's electricity, but the bill was paid at the last minute. While remaining tenants like Sears and JC Penney await the outcome of litigation, other nearby malls are adding space and gaining customers.
SouthPark Mall, Moline, Ill. (84 percent; $225). The owners spent a couple of years trying to sell this Quad Cities landmark, built in 1974, but they finally gave up late last year. Local officials would like to see the aging property converted to a more modern "lifestyle mall" with boutiques, lounging areas, and an upscale ambience. But modest local incomes probably can't support the major investment that would require. For now, the only upgrades at SouthPark are the construction of a few strip centers on "outlots" surrounding the mall, to be occupied by cheap restaurants and local service businesses.
Southridge Mall, Des Moines, Iowa. (84 percent; $168). The 2007 arrival of Steve & Barry's was supposed to mark a revival for this 34-year-old complex on Des Moines's South Side, which has been losing shoppers to more gentrified suburban malls. Then the discounter went bankrupt and closed its stores. The mall's owners have been trying to sell the property, and city officials have been working on ways to revitalize the entire area. They better hurry: At $168 per square foot, Southridge's sales are among the lowest for big malls.
Towne Mall, Franklin, Ohio. (49 percent; $207). This aging structure between Cincinnati and Dayton has been troubled for years, as the owner, CBL & Associates, and local officials have deliberated over whether to tear it down and build something more modern. Towne Mall has one of the highest vacancy rates of any operating mall, with more closed stores than open ones. A decision on the mall's fate is supposed to come soon.
Washington Crown Center, Washington, Pa. (70 percent; $265). Three of its biggest retailers--Macy's, Bon-Ton, and Gander Mountain--have suffered deep losses as consumers have cut spending. The mall's owner, Pennsylvania Real Estate Investment Trust, is revamping some of its properties--but not Washington Crown Centre, one of the weakest malls in its portfolio. PREIT could end up selling some of its subpar properties, which leaves this mall vulnerable.
* Where noted with an asterisk, figures are Green Street estimates.


http://finance.yahoo.com/news/Americas-Most-Endangered-usnews-1952033275.html?x=0

 

[Imark]

Fornisce spunti di un certo interesse circa lo stato dell'arte per il residenziale USA... e parliamo di RMBS a cartolarizzazione di prime jumbo mortgage loans.

1,784 Ratings Lowered On 167 U.S. Prime Jumbo RMBS Transactions From 2005-2007; 1,028 Ratings From 107 Deals Affirmed

• We reviewed 180 RMBS transactions backed by U.S. prime jumbo mortgage loan collateral issued in 2005, 2006, and 2007.
• We downgraded 1,784 classes from 167 of these transactions and affirmed our ratings on 1,028 classes from 107 transactions.
• We removed 586 of the affirmed ratings from CreditWatch negative.
• The downgrades reflect our belief that credit enhancement for the affected classes will be insufficient to cover projected losses due to increased delinquencies and the current condition of the housing market.

NEW YORK (Standard & Poor's) July 1, 2009--Standard & Poor's Ratings Services today lowered its ratings on 1,784 classes from 167 residential mortgage-backed securities (RMBS) transactions backed by U.S. prime jumbo mortgage loan collateral issued in 2005, 2006, and 2007.

We removed 1,249 of the lowered ratings from CreditWatch with negative implications. In addition, we affirmed our ratings on 1,028 classes from 94 of the downgraded transactions and from 13 additional transactions.

Furthermore, we removed 586 of the affirmed ratings from CreditWatch negative. The complete rating list is available in "U.S. Prime Jumbo RMBS Classes Affected By July 1, 2009, Rating Actions," which was published today on RatingsDirect, at www.ratingsdirect.com.

The list is also available on Standard & Poor's Web site, at www.standardandpoors.com. In the left navigation bar, click on Ratings, then Residential Mortgage-Backed Securities. Locate the list under the Ratings Actions Press Releases tab.

The downgrades reflect our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given our current projected losses.

To review these transactions, we applied our assumptions, which is discussed in "Assumptions: Standard & Poor's Revises U.S. Prime Jumbo RMBS Lifetime Loss Projections For Transactions Issued In 2005, 2006, And 2007," published June 16, 2009, on RatingsDirect, at www.ratingsdirect.com, and on Standard & Poor's Web site, at www.standardandpoors.com.

To assess the creditworthiness of each class, we reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration.

For mortgage pools that continue to experience increasing delinquencies, we increased our stresses to account for potential increases in monthly losses.

In order to maintain a rating higher than 'B', we assessed whether, in our view, a class could absorb losses in excess of the base-case loss assumptions we used in our analysis.

For example, generally, we assessed whether one class could, in our view, withstand approximately 130% of our base-case loss assumptions in order to maintain a 'BB' rating, while we assessed whether a different class could withstand 155% of our base-case loss assumption to maintain a 'BBB' rating.

Each class that has an affirmed 'AAA' rating can, in our view, withstand approximately 235% of our base-case loss assumptions under our analysis.

The affirmed ratings reflect our belief that the amount of credit enhancement available for these classes is sufficient to cover losses associated with these rating levels. Subordination provides credit support for the affected transactions.

The underlying pool of loans backing these transactions consists of fixed- and adjustable-rate, first-lien, prime jumbo mortgage loans

 

[paologorgo]

Regular TBP reader Steve Barry created this chart last year which projected forward the ongoing losses for Case Shiller; We first ran this back in December, and it ran all over the internet (mostly without attribution).
Well, its time to update this. Here is Steve’s most recent version:
>



http://www.ritholtz.com/blog/2009/07/update-case-shiller-100-year-chart/

 

[stockuccio]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afTeVIC9hmY0

Distressed Commercial Property in U.S. Doubles to $108 Billion

By David M. Levitt


July 8 (Bloomberg) -- Commercial properties in the U.S. valued at more than $108 billion are now in default, foreclosure or bankruptcy, almost double than at the start of the year, Real Capital Analytics Inc. said.
There were 5,315 buildings in financial distress at the end of June, the New York-based real estate research firm said in a report issued today. That’s more than twice the number of troubled properties at the end of 2008.
Hotels and retail properties are among the most “problematic” assets following bankruptcy filings by mall owner General Growth Properties Inc. and Extended Stay America Inc., according to the report. The scarcity of credit is causing property defaults in all regions and among every investor type, Real Capital said.
“Perhaps more alarming than the rapid growth in the distress totals is the very modest rate at which troubled situations are being resolved,” the report said.
About $4.1 billion of commercial properties have emerged from distress, according to Real Capital.
“In far more situations, modifications and short-term extensions are being granted, but these can hardly be considered resolved, only delayed,” the study said.
The June figures issued today are preliminary.

 

[paologorgo]

There is currently $3.5T of debt associated with commercial real estate, about half of which is on the books of banks. In his testimony, Fed's Greenlee says they've been following this situation closely. And Simon Johnson wonders: "Why do I not find this reassuring?"

---

Apartment REITs' Good Recovery Profiles

Credit Suisse​

WITH THIS REPORT, Credit Suisse relaunches its coverage of U.S. real-estate investment trusts (REITs).
We review four factors that we believe will occur over the next five years: (1) rising debt costs; (2) continued deleveraging; (3) declining earnings before interest, taxes, depreciation and amortization with job losses; and (4) a low-supply rent recovery for the apartment sector.
Our five-year forecast ironically is for flat sector earnings. However, the underlying changes are large depending on the period.
We think the best 2010-2011 earnings profiles will be flat, led by well-capitalized retail and office REITs such as Simon Property Group (ticker: SPG), Realty Income (O), and Boston Properties (BXP).
We think the best recovery profiles will be apartment REITs, due to financing advantages and high economic sensitivity. In contrast, we think secular factors, along with more-challenging rental comparables, keep long-term retail growth muted.
Across sectors, a key factor is balance sheet. Lower marginal debt costs and a lack of equity dilution lead to higher growth across sectors. Our greatest earnings declines came from large deleveragers (Simon, Macerich (MAC)), with subtle intrasector differentiation ( AvalonBay Communities ' (AVB) 2013 growth rate exceeds BRE Properties ' (BRE), primarily due to deleveraging/mark to market factors).
Short term, we find apartment valuations at risk given high multiples and top-line risk. However, apartment valuations look more reasonable on 2013 estimates.
We tend to like higher-yielding REIT debt better than the equity given our flat earnings profile.
Domestically, our best idea is Simon due to its combined low multiple and lack of development entanglements. On a global basis, Simon also screens as inexpensive, but perhaps on a "cheap for a reason" basis (U.S. retail fundamentals lag those of other major markets).

-- Andrew Rosivach, CFA
-- Steve Benyik
-- Sarah Lewis
-- Ariyanto Jahja​

http://online.barrons.com/article/SB124702539895510171.html?ru=yahoo#mod=yahoobarrons

 

[Imark]

Fornisce spunti di un certo interesse circa lo stato dell'arte per il residenziale USA... e parliamo di RMBS a cartolarizzazione di prime jumbo mortgage loans.

1,784 Ratings Lowered On 167 U.S. Prime Jumbo RMBS Transactions From 2005-2007; 1,028 Ratings From 107 Deals Affirmed



...

Ad una settimana di distanza, altra raffica di dowgrades su miliardi di $ di RMBS su mortgages jumbo (e quindi mutuatari "prime" ma importi eccedenti quelli operabili da Fannie & Freddie), con la caratteristica del trattarsi di cartolarizzazioni di anni compresi fra il 2002 ed il 2004, ossia quelli che si ritenevano relativamente protetti dal calo dei rating in quanto sottoscritti quando l'immobiliare USA non era ancora proprio "a bolla".

 

[Imark]

Forte crescita della volatilità della capacità reddituale dell'immobiliare commerciale USA, specie uffici ed hotel, nel 2008 rispetto al 2007.

Si attesta su livelli record, quintupli rispetto all'average registrato da fitch dal 2000, ossia dall'anno in cui ha iniziato ad aggiornare questo indice.

L'agenzia ne deduce ulteriori difficoltà in arrivo per il settore...

 

[paologorgo]

Mortgages: Option ARMs Are the New Subprimes


Here’s a sign of changing times — not necessarily for the better. The WSJ reports that Option ARMs are now


performing worse than subprime.

From the WSJ article:

For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the U.S.
Option ARMs were typically issued to creditworthy homeowners and allow borrowers to make a range of monthly payments. The payment options include a partial-interest payment that adds the unpaid interest to the loan’s balance. On many such loans, balances have risen while values of the underlying properties have plummeted amid the housing crisis.
As of April, 36.9% of Pick-A-Pay loans were at least 60 days past due, while 19% were in foreclosure, according to data from First American CoreLogic, a unit of Santa Ana, Calif.-based First American Corp. In contrast, 33.9% of subprime loans were delinquent, with 14.5% of those loans in foreclosure, the figures show.
​

As you can see from the chart above, this is kind of disconcerting since these loans are just beginning to be recast. We haven’t even started to deal with this problem and their already cratering. I suspect that many of the borrowers are just throwing in the towel as they recognize how truly far under water they are. Do the math and figure out what 30% price depreciation combined with 10% negative amortization does to your equity position. Not pretty!
Then throw in a new amortization schedule at market rates on a 25 year term and you can quickly see that there is no feasible way out of this quagmire short of either massive foreclosures or massive modifications. We aren’t talking about starter homes either, folks. These loans were used by the overreaching middle class to buy the McMansions. Hold your fire if you want to trade up, the deals are coming.
The article in the Journal names Wells Fargo (WFC) and JPMorgan Chase (JPM) as being heavily exposed to this sector. True, both bought banks that had big portfolios of this junk. But there’s a big difference in the portfolios.
JPMorgans comes from WAMU (WM) who did a lot of stated income deals with fairly low down payments. They cap out at neg ams of 110% generally. Big problems with this portfolio. Wells on the other hand bought Wachovia which bought their portfolio from World Savings. Most of these were done at 75% to 80% LTV and don’t cap out and require a reset until they reach 125% LTV.
Perversely, World was conservative in terms of the equity it demanded going in but pretty liberal in terms of the amount of negative am they would allow. Net, net they probably have a less exposed portfolio than Morgan.
The one thing you can expect is that there will be some sort of massive bailout of these loans. The people who used these mortgages to buy their homes have more political clout than the subprime folks. They have some levers to pull so expect to pay for their mistakes.

http://seekingalpha.com/article/148442-mortgages-option-arms-are-the-new-subprimes