20 posts tagged “bailout”
Despite daily reminders of the commercial real estate industry's bleak state of affairs, experts see glimmers of relief in the current legislation making its way through Washington. According to experts interviewed by the National Real Estate Investor Online, efforts to revive the economy as a whole are expected to extend through to the commercial sector and improve conditions. "I think the stimulus bill will have a positive effect on the economy, and a positive effect on the economy is going to have a positive effect on commercial real estate," said Lawrence White, professor of economics at New York University. Specifically, provisions investing government dollars in infrastructure through the stimulus bill President Obama signed Tuesday would help the overall industry. According to John Terrence Farris, director of the Master of Real Estate Development program at Clemson University, "Commercial development depends on good infrastructure."
Of course, not everyone is so optimistic. Writing for Commercial Property News' "From the Inside" blog, NorthMarq Capital CEO Ed Padilla looks to Cuba for examples of the limitations inherent to government spending. "Ultimately the private sector will carry most of the weight to resolve the recession," he stated. However, most experts seem optimistic that government actions, including the recently proposed Homeowner Affordability and Stability Plan, will be sufficient to restore consumer confidence and revive the flagging markets.
For more news and information, visit Blumberg Capital Partners.
Blumberg Capital Partners was recently featured in two Real Estate Forum magazine articles, "Cleaing Up on Toxic Assets" and "Commercial Real Estate Industry Pleads for Federal Intervention."
An excerpt:
Any action to restore liquidity in the markets is generally welcomed throughout the industry. But some observers caution that even with a federal bailout, the commercial real estate sector needs painful de-leveraging to return to a state of normalcy. Maturing debt obligations will come under greater distress this year with office rents poised to fall an additional 20% and vacancies likely rising 25% by year-end, according to a recent analysis by Blumberg Capital Partners.
"Creating a refinancing stimulus is helpful to thaw the credit freeze, but these ticking debt time bombs will make it difficult for our public officials to get their arms around the problem," says Philip Blumberg, chairman and CEO of the Coral Gables, FL-based firm.
To read these articles, visit the Blumberg Capital Partners news item.
Last week’s GlobeSt.com Quick Poll asked readers whether or not our new president’s economic recovery plan would help the commercial real estate industry. It was a close call, but 55% of our nearly 770 respondents voted “no,” with the remainder thinking Barack Obama’s will work. Philip Blumberg, founder of Coral Gables, FL-based Blumberg Capital Partners was in the minority. He spoke with GlobeSt.com recently about why he has hope in Obama’s plan.
An excerpt:
I am a fiscal Republican, but a registered Democrat, and he has made a very strong impression on fiscally conservative people. He’s taken a very common-sense approach. But his plan is in formation. To the degree that he seems fiscally aware of the potential impacts of a highly inflationary economy because of government spending, it’s refreshing to hear from a Democrat, particularly the most important Democrat.
It bodes better for this economy. Not that it bodes well, but better than the worst perspective, which has been flagrantly spending money or making commitments that are ultimately going to be disasterously inflationary. The concept that real estate is a good inflation hedge has some merit to it, but certainly not enough merit to warrant the type of inflation we are going to be looking at.
To read the full article, click here.
The House of Cards Economy: Philip Blumberg of Blumberg Capital Partners discusses the domino effect within the economy and the time it takes to fix the damages done within the system. For more news and information, visit Blumberg Capital Partners.
Blumberg Capital Partners was recently featured in a Real Estate Channel article titled "Blumberg Capital Partners Chief Spotted the Crash and Exited Two Years Ago".
An excerpt:
Philip F. Blumberg may not have a crystal ball on his desk but says he spotted the current commercial real estate price drops two years ago and yanked his Blumberg Capital Partners company off the playing field.
By liquidating the bulk of his firm's holdings over the past two years, he generated a 30 percent return this year and cleared all debt from the company's books.
To read the rest of this article, click here.
Blumberg Capital Partners was recently featured in a Saudi Gazette article titled "Commercial estate bailout needs ‘painful deleveraging’ to succeed".
An excerpt:
An analysis of commercial real estate values, leasing and vacancy trends shows that any government bailout of the industry will require a painful, significant deleveraging to succeed, Blumberg Capital Partners, one of US leading investment fund managers, said on Tuesday.
Blumberg Capital Partners’ new office market assessment, which takes into account the fresh economic data from the past two months, comes on the heels of its widely cited prediction in October that commercial real estate prices in 2009 could drop some 20 percent further- - on top of an anticipated 15 percent drop this year.
Blumberg Capital Partners was recently featured in an article on GlobeSt.com titled "Fundamentals Worsen as CRE Industry Eyes Bailout Funds".
An excerpt:
Up until September the commercial real estate industry had had just enough breathing room to keep from going into free fall. A credit squeeze had shelved or delayed many projects – but fundamentals were still strong, and the economy’s recession shallow.
A new report by investment fund manager Blumberg Capital Partners, found that maturing debt obligations will come under even more stress in 2009 with leasing rates poised to drop an additional 20%. Office vacancies could potentially rise to 25% by the end of the year, and take until 2011 to stabilize.
To read the rest of this article, click here.
The National Federation of Independent Business Research Foundation recently conducted a poll of small business owners that revealed 75% of small employers watched the actions of the Federal Reserve Board over the last six months - and 25% of them are worried that their businesses won't survive the recession.
"The fundamental small-business problem is the poor economy, abetted by the drop in real estate values and the nation's financial turmoil," said William Dennis, who directed the poll for NFIB, in a Business Journal article. "Efforts to provide additional credit, whether through encouraging bank lending or government loan guarantees, are not likely to be of much help to small-business owners," he said.
20% of small employers have reduced, postponed or cancelled a planned investment(s) or reinvestment(s) in the last six months, though 11% increased plans. A slowing economy is the primary reason for the curbed investment in over half of cases. An absence of finance is practically never mentioned as a reason for reducing investment. Only 9% cited an inability to obtain credit, the same percentage that cited falling real estate values.
For more news and information, visit Blumberg Capital Partners.
Philip Blumberg on CNBC's Closing Bell 12/23
Members of the commercial real estate industry are seeking government help. Steven Wechsler, CEO of the National Association of Real Estate Investment Trusts, and Philip Blumberg, CEO of Blumberg Capital Partners, discuss.
Blumberg Capital Partners, one of the nation's leading investment fund managers, today said that an analysis of commercial real estate values, leasing and vacancy trends by its staff shows that any federal bailout of the industry will require a painful, significant deleveraging to succeed.
The company said any bailout plan is working against a legacy of debt time bombs created by imprudent, unrealistic buyers who over-borrowed during the peak of the market in anticipation prices would continue rising unabated.
The Blumberg analysis shows that maturing debt obligations will come under even more stress in 2009 with leasing rates poised to drop an additional 20% to levels not seen since 2002, and with office vacancies potentially rising to 25% by the end of the year. Indeed, the nation's office market could take until 2011 to stabilize, the company's analysis shows.
"Creating a refinancing stimulus is helpful to thaw the credit freeze, but these ticking debt time bombs will make it difficult for our public officials to get their arms around this problem," said Philip Blumberg, Chairman and CEO, as well as firm's chief investment strategist. "Now, because the global economic recession has worsened over the past few weeks, coupled with layoffs at the front end of the cycle, demand for office space nationally is falling. Until companies can weather this storm and start expanding again, prices will remain low for landlords, and vacancies will rise."
To read the full article and analysis, click here.
