| IN THE
June 10,
2009 ISSUE |
Will Green Shoots Sprout for Institutional
Investors?
In the face of waning transaction volume and leasing
activity, many institutional investors are rightfully taking a hard look
at their allocations to the commercial real estate sector. Despite the
temptation to make radical strategic changes, one leading advisor is
recommending that global institutional investors keep the faith when it
comes to their commercial real estate holdings.
In a new study, “U.S. View: Real Estate Investing in a Time of
Uncertainty,” co-author David Lynn, managing director for New
York-based ING Clarion, says history is a good teacher when it comes to
how quickly and strongly the U.S. markets could recover from the current
recession.
TALF Program Hits Headwinds
One week after the Federal Reserve announced that the Term
Asset-Backed Securities Loan Facility (TALF) program would include
commercial mortgage-backed securities (CMBS) issued before Jan. 1, 2009,
Standard & Poor’s released a change to its ratings model that could
downgrade 90% of the highest-quality CMBS issued in 2007.
“The downgrade is something that could impact the Fed’s plans and
certainly will impact the market as far as the TALF is concerned,”
says Kevin Petrasic, former special counsel of the Office of Thrift
Supervision and currently counsel in the banking and financial
institutions group at law firm Paul Hastings Janofsky & Walker in
D.C.
In order to qualify for the program, under which investors obtain Fed
financing to buy debt, CMBS pools will be required to have AAA ratings
from two of the four TALF CMBS-eligible rating agencies, which include
DBRS, Fitch Ratings, Moody’s Investors Service, Realpoint and Standard
& Poor’s.
AIG’s Crash Diet: New York Headquarters
Sold
American International Group (AIG) has entered into a
contract with developer Youngwoo & Associates and Korea-based Kumho
Investment Bank to buy its downtown New York headquarters at 70 Pine St.
and 72 Wall Street. Combined, the two buildings are 1.4 million sq. ft.
The beleaguered insurance giant is expected to remain in its
headquarters through 2010.
It is the latest in a series of moves by AIG to sell assets in order to
repay $182.5 billion that it has received from the federal government
since last September.
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