Slowdown in U.K. Bodes Ill for European Property - Wall Street Journal
property derivatives—financial instruments that are indirectly linked to property and take positions on future developments—suggest U.K. property has had its run. Market consensus appears to be that U. More
Posted: 2010-08-17T23:57:50Z
Comments
August 5, 2009, 10:32 am
RE: Fried Frank Elects Seven New Partners - Earthtimes
Distressed debt buy-backs & developer bailouts for stabilized or semi-stabilized assets, signs of a turn-around or institutional interest in lender buy-backs? With more than $150 Billion in commercial real estate loans maturing this year, there is no doubt that the write-downs by lenders, hard money, and bridge loan funds will be monumental. We are already seeing discounted debt buy-backs and other debt being offered at a discount through lender work-outs and other debt restructurings in the commercial real estate arena. Along with epic losses just about to hit the commercial real estate market, there are always vulture investors and newly formed bridge funds that are actively pursuing deals that make sense. Based on recent observations and extensive research, real estate debt and bridge loan funds that were recently capitalized or formed are actively pursuing non-performing debt with a special emphasis on debt that is being offered at a discount. The underlying commercial real estate asset classes can range from plain vanilla income producing assets, semi stabilized assets; low DSCRs, or non-stabilized assets. Currently in the market now, the bridge funds and newly formed CRE funds consider make sense non-stabilized deals to be fractured CRE deals that are 75-90% completed that are in need of interim or gap financing while waiting for completion of construction and lease-up. Our investors are well capitalized and are looking to fund CRE deals that a lender is offering a discount buy-back on senior debt. In essence our institutional investors are willing to purchase discount senior construction debt, extend additional capital for necessary construction and for the lease-up stage. The spread between the original debt balance amount and the newly discounted debt amount should be at least 25%, though ideally 40-60% off the original face amount- essentially this is a developer or builder "bail-out" type of financing. Along with our investors, we honestly believe that there is less risk associated for bridge situations in which there is a discounted debt buy-back and only 20-30% of construction remaining. In addition, our investors can be extremely competitive for financing of stabilized CRE deals as well.
Joe - Greater New York
August 5, 2009, 10:30 am
RE: Fried Frank Elects Seven New Partners - Earthtimes
How to get started in property derivatives? Hi All, I’m currently working as a commercial real estate agent in Brisbane, Australia however am close to finishing my postgraduate studies at Kaplan (formerly the Financial Services Institute/Securities Institute of Australia). I am positioning myself to switch from transacting physical property to synthetics within the next 12-24 months and think that it would be best to get into this area whilst it is still in it’s relative infancy either locally or o/s. I have a few of my own ideas however I thought I would seek other opinions from those currently in the business as to how best to get started in this field? Any advice on qualifications that are sought, required experience, what types of entry-level positions are out there and the tasks that someone in this role would be expected to perform would be greatly appreciated. Also any anecdotal evidence or personal experiences would be great too.
Sam - South Brisbane Area
Welcome to the Property Derivatives Section of the News Blog Real Estate Site. Newsblogrealestate.com is the internet's leading collection of Property Derivatives & information. Find the Property Derivatives information before making a decision about home, townhome, foreclosure, new home or condo.