Friday, October 23, 2009

Market, CRE Stories, and CIT Update

by Bill McBride on 10/23/2009 04:00:00 PM

While we wait for the 100th bank failure of 2009 ...

Stock Market Crashes Click on graph for larger image in new window.

From Doug Short of dshort.com (financial planner).

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

The S&P was off 1.2% today. The index is up about 60% from the bottom (and off 31% from the peak).

Two different views on CIT:

From Bloomberg: CIT Sees Recovery as Low as 6 Cents in Bankruptcy

CIT said in a regulatory filing today that if its reorganization plan fails, it “will likely face bankruptcy” and that those claims would fetch recoveries between 6 cents and 37 cents a dollar.
And from MarketWatch: Icahn urges bondholders not to accept CIT plan
Icahn said if assets on the comapny's balance sheet are "run off" in a controlled way, CIT bonds will be worth at least 80 cents to 85 cents on the dollar.
A few CRE stories:

Yesterday from the NY Times: Court Deals Blow to Owners of Apartment Complex

And more Tishman troubles, from Bloomberg: Tishman Speyer Office Park in L.A. Faces Foreclosure (ht Brian)
A Tishman Speyer Properties LP office park in California ... is the subject of a foreclosure lawsuit saying the owners failed to repay $154 million in debt due in July.

Tishman Speyer and Walton Street Capital LLC bought the Campus at Playa Vista at the top of the U.S. real estate boom in 2007. KeyBank National Association sued to foreclose against limited partnerships controlling the Los Angeles property ... The Los Angeles Business Journal reported Oct. 19 that a mortgage on the property was up for sale for $50 million.
If that LA Business Journal story is correct, the lenders were trying to sell the $150 million note for $50 million. Ouch.

And from Bloomberg: NYC Tower Buyers Wrestle Towering Vacancy Dilemma (ht Mike In Long Island, others!)
... Worldwide Plaza [is 40% vacant]. It’s one ... George Comfort & Sons Inc., was able to buy the ... in July for $590 million, two years after it sold for almost three times as much.

The purchase price may allow Duncan to undercut the rents competitors charge as he leases his 709,000 square feet. Manhattan has 59 million feet of available offices, according to brokerage Colliers ABR, the most since June 1996, and rents for the best space are down more than 30 percent from their peak last year.