NREI_NEWSLINE_ Penton Media November 18, 2009 If you want to view this on the web go to: http://enews.penton.com/enews/nrei/v/765 TOP STORY --Vulture Funds Lie Low as REITs Move in to Nab Hotel Deals By Denise Kalette The U.S. economy has been downright inhospitable to the hospitality industry. Not only have hotel sales plunged to a fraction of last year's deals, but the sector has also been whiplashed by declining occupancy levels and room rates. In 2008, the volume of hotel sales reached $10.7 billion for the year, but by the end of September 2009, sales totaled just $2 billion, according to New York research firm Real Capital Analytics. By comparison, at the peak of transactions in 2007, annual sales totaled a lofty $77.4 billion. So dire has the financial status of the hospitality industry become as a result of the recession and scarcity of credit, that it has led to an upheaval among the hotel investment giants and a reversal of financial power -- at least for now. To view the full article go to: http://nreionline.com/finance/news/vulture_funds_lie_low_1118/ ONLINE EXCLUSIVES --Despite Slower Deal Volume, Commercial Banks Continue to Lend, Reis Reports By Sibley Fleming While sagging credit conditions were initially responsible for the weakened commercial real estate capital markets, today poor and declining fundamentals are adding to the problem, according to Reis economist Ryan Severino. "The decline in transaction volume and transaction prices is broad-based, consistent with continuing weakness in property fundamentals as well as little improvement in credit availability," said Severino during the New York-based research firm's third-quarter capital markets briefing today. "Neither of these is likely to improve in the immediate future so we should expect volumes and prices to remain depressed for some time, even if the pace of decline slows." Moody's Economy.com projects unemployment to peak at 10.6% in 2010. The impact on demand for commercial real estate space will result in peak vacancy rates of 18% for the office sector and 8.3% for apartments in 2010, according to Reis. Retail vacancies are not expected to peak until 2011 when they reach 12.5%, but Reis anticipates no recovery for the sector until 2012 "at the earliest." To view the full article go to: http://nreionline.com/finance/news/slower_deal_volume_banks_1118/ --U.S. Life Insurers Can Endure CMBS Delinquencies, Fitch Reports By Sibley Fleming Although delinquency rates for property types underwritten by commercial mortgage-backed securities rose to 3.96% at the end of October, the life insurance sector should be able to manage its near-term exposure to losses related to commercial real estate, Fitch Ratings reports. While life insurers may be able to withstand such losses related to commercial real estate in the short-to-intermediate term, in some cases their ratings may be downgraded when because of pressure from other asset classes and products. To view the full article go to: http://nreionline.com/news/life_insurers_can_endure_cmbs_delinquencies_1117/ --Doubling Down on Green By Sibley Fleming The past two years have been brutal for U.S. businesses and their employees. That reality has trickled down to commercial real estate owners and landlords who have been grappling with how to pay debt service on properties with rising vacancies and falling rents. Against such a bleak economic backdrop, green building has not retreated, but in fact sunk its roots even deeper into the commercial real estate industry's psyche and practices. "We see an increase in awareness and activity, particularly on existing buildings and retrofitting of existing buildings," says Marc Heisterkamp, director of commercial real estate for the U.S. Green Building Council based in Washington, D.C. "It is in a tough economy that top companies rise to the occasion and find ways to save money and position their real estate for the future." 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