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The Incredible Shrinking FDIC

Dike Drummond — Fri, 21 May 2010 17:41:51 +0000

The dreaded FDIC “Troubled Banks” list total hit 775 which is the highest number since 1992. BTW, 72 have already failed this year. While at the same time … the number of insured institutions hit all time low below 8000. Back in 1990 the FDIC insured over 16,000 institutions. What a rapid and profound shift that is.

Here is the Full Article

Distressed Asset Life Cycle Teleclass Download

Dike Drummond — Thu, 25 Feb 2010 21:42:44 +0000

We just recorded a new Teleclass where we outline the Distressed Commercial Asset Life Cycle. You can get a free copy here for the next 2 weeks and then it will change to our latest teleclass and topics change twice a month.

Get yours now: http://www.investortours.com/free_teleclass.php

Is Multifamily Stabilizing?

Dike Drummond — Thu, 21 Jan 2010 19:07:46 +0000

We are all waiting for spring … when all things are born anew!

AND before you can get green shoots like these in the commercial real estate markets … the first step is the market fundamentals have to stabilize. At some point rent and occupancy simply must stop falling and enter the category of “No Change” as the analysts in our industry survey the national markets. Only then can the turnaround … and those little shoots … begin to emerge.

Here’s a sign we may be seeing some stabilization sooner than most pundits had predicted.

Most of the national “experts” reported in the press over the last several months have gone on record predicting it will not be until the 3rd quarter (and most then say “at the earliest”) until we see the Commercial Real Estate Markets recover.

Here is a report showing 16 of 28 major markets in the US where multifamily rents are NO CHANGE in the fourth quarter of 2009. See the report at this link …

Could this be the first sign that some “green shoots” are on the way – might they be curled up under the surface yearning to emerge when the sun comes out all the way? Stay tuned …

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Is walking away from your loan now Socially Acceptable

Dike Drummond — Fri, 18 Dec 2009 15:19:20 +0000

In this economy, where many individuals and businesses bought at the peak and are now under water on their loans, is it now Socially Acceptable to walk away from those loans? Are we to the point where a “strategic default” – as this has come to be known – is simply idle water cooler banter amongst investors.

Today Bloomberg announced that Morgan Stanley is doing just that for the second time in 2009. And the Wall Street Journal has had a series of articles on single family home owners and the epidemic of strategic defaults in home loans

More on Morgan Stanley …

Back in the boom days Morgan Stanley made a series of purchases of commercial property from folks like Sam Zell that turned heads because everyone in the industry knew they had over paid. Now the stuff is hitting the fan and Morgan Stanley is simply handing the properties back to the bank and walking away – even though the loans are still current!

Last month they agreed to surrender 17 million square feet of office buildings to Barclays Capital after acquiring them for $6.5 billion in 2007 from Crescent Real Estate Equities.
Now they are announcing plans to relinquish five San Francisco office buildings to its lender two years after purchasing them from Blackstone Group LP near the top of the market.

From Bloomberg: “San Francisco prime office rents fell 37 percent in the third quarter from a year earlier, the biggest decline since 2001, as companies cut jobs, Colliers International said. The vacancy rate rose to 14 percent, the highest since 2005. Almost 1.4 million square feet of space was returned to the market in the first nine months of the year. ”

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Commercial Trend Alert – “Pop Up Shops” a Win-Win in Hard Times

Dike Drummond — Tue, 24 Nov 2009 12:38:48 +0000

With Retail Property in the tank across the nation … a couple week’s rent is WAY better than nothing at all. Retailer business owners are in an equal scramble to make a buck from the shrinking consumer spending pie … and Time Magazine is reporting that this is leading to some creative win:win solutions across the country in the form of what they are calling “Pop Up Shops”. Here’s the skinny …

The value proposition:

I will rent your space for a couple months and give you some extra cash flow
If you let me try out a new retail concept without having to sign a long term lease

And the “Pop Up Shop” is born.

Now we have all seen these types of stores before. You know the ones … the Halloween Costume shop that pops up for just a couple weeks in October. And any number of holiday focuses shops at Christmas – the Hickory Farms store anyone? The difference now is this is a real main stream trend.

Examples:

ToysRUs is opening 350 “Holiday Express” toy outlets nationwide
American Eagle is opening a store for only 77 days in Pittsburgh to sell its “77Kids” brand clothing
Ann Taylor is opening similar pop ups in NYC

If there ever was a time to try out a new retail idea without having to pony up for a long term lease … this is it.

Here’s the full article

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TV Ads for Commercial Property Auctions – What’s Next?

Dike Drummond — Fri, 20 Nov 2009 17:21:13 +0000

Last night I was watching television when an ad came on – in prime time – promoting a foreclosed/distressed Commercial Property Auction. “Who wants to by an empty Home Depot location … step right up”

I thought to myself, “This really is a sign the end is near – meaning it is seriously time to buy!” I have never seen anything like this before. Sure, the “no money down” guru crowd does a lot of work with TV… but that’s usually late night infomercials … and yes I do own a Carleton Sheets course from the 90’s.

Then today I saw the same ad in the Wednesday Wall Street Journal – a half page spread in “The Property Report”. That’s more like it.

Here’s the website for the auction. They have no less than 9 empty Home Depots to move.

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Silverdome Sells for 10 Cents on the 1975 Dollar – Talk about Distressed Commercial Property !

Dike Drummond — Wed, 18 Nov 2009 16:53:48 +0000

The Pontiac (MI) Silverdome – former home of the Detroit Lions – just sold for $583K. That is not a typo …. $583,000

It cost $54M to build in 1975. Just think what that is in today’s dollars !!

The Glory Days?

Back in 1994 Brazil beat Italy in a world cup game in this building.
Michael Jackson, Madonna and Elvis all played there
Pope John Paul II, once delivered Mass from the field
But the Silverdome’s biggest event was Wrestle Mania III in 1987, when 93,000 fans packed into the stadium to watch Hulk Hogan body-slam Andre the Giant. That was the biggest turnout ever for an indoor sports event.

The Detroit Lions NFL team hasn’t played there since 2002 and the buidling was costing the city of Pontiac $1.5M to keep up.

The new owners are going to host MLS Soccer Games (GO SOUNDERS!)

Here’s the full article.

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