Investment Group Expands to Multi-Family Market in Louisiana

Investment Group Expands to Multi-Family Market in Louisiana-Image via Wikipedia

Post Investment Group, Inc, a Los Angeles-based opportunistic real estate investment firm, today announced their initial foray into the Louisiana multi-family market with the acquisition of Quail Creek Apartments.

Post acquired the property, a 403 unit class B complex, through an on market transaction brokered by Austin-based Apartment Realty Advisors.  Quail Creek represents the first significant transaction outside of Texas for Post, marking a strategic shift in their investment platform.  In addition to developing inroads into a new market, the property is the first non-distressed opportunity pursued in 2010. In reference to the recent transaction, Post commented that the influx of investment-grade capital in tandem with inexpensive debt has enabled firms to realize positive leverage down to a 4.50% cap rate and thus resulted in a migration toward Class A product.  In conjunction with institutions, dividend-driven opportunistic groups have followed the financially engineered yields to newer product as well, creating a vacuum in Class B appetite and resulting in this opportunity for Post.  According to Scott Pickett, Director of Acquisitions for Post, “Post is actively looking to expand both our core-stabilized and distressed acquisition platforms by identifying strategic assets in fundamentally sound markets.”  Mr. Pickett expands to say, “Post is in the process of evaluating new markets that exhibit strong economic and operational metrics as well as transactional volume and clarity.  In addition to furthering our foothold in Texas, we are currently exploring markets such as Colorado and California and potentially Arizona and Florida.”

Quail Creek is the fourth acquisition for Post in 2010, and in combination with deals currently under contract will surpass their 2010 goal of $120 million in total capitalized acquisitions for the year.  By the end of 2010, Post expects to have expanded its holdings to nearly 10,000 apartment units, an important milestone in multi-family ownership.  Moving forward Post is focused on expanding their breadth of operations in multi-family through continued investment vigor and with the creation of a development division which is expected to break ground on their first two projects in December of this year.

Quail Creek was purchased through a joint venture with a Los Angeles-based private asset management firm.

About Post Investment Group, Inc

Post Investment Group is an opportunistic real estate investment firm focused on the acquisition of multi-family assets nationwide.  The company specializes is both core plus and distressed investment opportunities capitalized through private and institutional investors.

Post Investment Group 1-310-788-3445

SOURCE Post Investment Group, Inc

Wall Street Reform Brings Flood of Federal Investigations

Wall Street Reform Brings Flood of Federal Investigations-Image via Wikipedia

When President Obama signed the Wall Street reform bill into law on July 21, he likely ushered in what might be called “the decade of the whistleblower”—an era marked by a flood of federal investigations sparked by bounty-hunting employees looking to cash in on rewards that, in some cases, could turn them into instant millionaires. Indeed, the Dodd-Frank bill became law just three months ago, but plaintiff’s firms already report an astronomical jump in calls from would-be whistleblowers, noted two LeClairRyan attorneys, who will explore the potentially far-reaching impact of the Dodd-Frank whistleblower provisions during an Oct. 29 webinar at

The free Webinar, which runs from noon to 1:30 p.m. EST, will be conducted by James P. Anelli, a veteran labor and employment attorney with decades of experience representing management, and Carlos F. Ortiz, a seasoned white-collar defense attorney who served as a federal prosecutor for more than 15 years. Both attorneys are shareholders in LeClairRyan, based in the firm’s Newark, N.J., office.

While the Dodd-Frank Act has been widely discussed, its extremely significant whistleblower provisions have gone nearly unnoticed, the attorneys said. And yet, under those provisions, whistleblowers that provide information that exposes SEC violations will get up to 30 percent of fines exceeding $1 million. “Bear in mind that recent fines involving violations of the Foreign Corrupt Practices Act (FCPA) have reached up to $100 million,” Ortiz noted.  “The fallout from these whistleblower provisions will be huge. This is an incredible incentive for employees who are looking to get rich to do all they can to gather information on, and report, potential violations by their employers. Why would they go through existing compliance hotlines when they can contact a plaintiff’s attorney and pursue such potentially lucrative payouts?”

Generally speaking, the scope of previous SEC whistleblower laws was limited to cases of insider trading. Dodd-Frank, which will be administered by the newly created Bureau of Consumer and Financial Protection, applies to all potential SEC and commodities-trading violations. For a variety of reasons, it will affect a broad swath of both private and public entities, Anelli noted. “In the old days, whistleblower laws applied to Wall Street traders using insider knowledge to swap ‘hot stock tips’ with each other, but the new framework is quite broad,” he explained. “It applies to virtually any company that deals with consumer credit, loans or property in any capacity, including mortgage brokers, financial advisors and credit-counseling services.”

During the webinar, Ortiz will describe the manifold ways in which public companies that do business overseas could be forced to deal with an upsurge in employee-generated complaints under FCPA. (The conduct of foreign intermediaries, for example, is already under close federal scrutiny.) But public companies are not the only ones that will be affected by the bounty-hunting provisions—their subsidiaries and privately-held competitors might also come under closer federal scrutiny.

“Let’s assume your company is privately owned and does business in Malaysia,” Ortiz said. “If your chief competitor in the market is a publicly-traded American company that, thanks to a whistleblower complaint, becomes the target of a federal investigation, the Department of Justice might launch a broader ‘industry probe.’  DOJ might say, in effect, ‘Now that we know Company X was bribing officials in Malaysia to get work, let’s investigate all of its competitors.'”

Moreover, Anelli added, the new whistleblower provisions apply to all of the subsidiaries of any public company. “A large public company might have 100 subsidiaries, and as long as the financial information of those subsidiaries is used in its consolidated financial statement, those entities are covered under this law,” he said. “The ‘Wall Street reforms’ actually have a reach that is far beyond the publicly-traded realm.”

How should companies protect themselves against bogus complaints filed by bounty-seeking employees? What specific practices and departments tend to be at highest risk of being cited for an SEC violation? How will the new anti-retaliation provisions—which include private causes of action for employees who suffer retaliation—affect the way managers should conduct themselves in the wake of a whistleblower complaint? During the webinar, Ortiz and Anelli will explore these and other questions. They will also offer advice on how companies can develop effective internal controls and document their efforts to maximize compliance.

The potential stakes, the attorneys note, are high: Federal enforcement actions have been increasingly aggressive in recent years, with approximately 150 companies already under investigation for FCPA violations and a growing number of individual executives being singled out for prosecution. “The reforms included a burden-shifting framework that is favorable to employees,” Anelli concluded. “Under this framework, employees in many instances will now be able to show that they meet the burden of proof that is required to recover their cut of the eventual fine. Because of the amounts involved, whistleblower cases are going to turn into big business for plaintiff’s law firms. As more whistleblowers start making big bounties—and headlines—the number of investigations will only grow. Careful preparation clearly is in order.”

To register for the webinar: (“Dodd-Frank Will Usher in the ‘Decade of the Whistleblower’ “) please visit Registration deadline is 11:00 a.m. EST on Friday, Oct. 29.  HRCI credit for the webinar is pending

About LeClairRyan

Founded in 1988, LeClairRyan provides business counsel and client representation in corporate law and high-stakes litigation. With offices in California, Connecticut, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C., the firm’s nearly 300 attorneys represent a wide variety of clients throughout the nation.  For more information about LeClairRyan, visit

Available Topic Expert: For information on the listed expert, click appropriate link.

Carlos Ortiz

SOURCE LeClairRyan

Mergers and Acquisitions Down for Global Markets

Despite the return of favorable conditions for mergers and acquisitions (M&As), a quarter fewer (29%) global businesses are actively seeking acquisition targets, in stark contrast to the appetite for deals six months ago (38%). The fall comes despite only 16% feeling restricted in their ability to pursue growth through M&As compared to 40% a year ago, according to a survey of over 1,000 senior executives around the world, by Ernst & Young.

The third bi-annual Capital confidence barometer, conducted in October, also finds greater optimism among executives about their own company and local economy prospects tempered by greater pessimism about the global picture. Austerity measures, increasing taxes, currency conflicts and regulatory concerns along with a slowing recovery among other issues are undermining confidence in the global economy and reducing the appetite for M&A.

Half of respondents now feel well positioned to execute an acquisition at short notice – up from 36% in 2009 – but more companies are reluctant to commit to a deal. The majority of those that are, look to acquire in emerging markets. There may be a drop in the appetite for M&A generally but we could see some bold first-mover activity given the fall in respondents saying they were likely or highly likely to make a divestiture over the next six months (down to 15% from 38% in April) was higher relatively, than the fall in buyers – increasing the gap between the number of potential buyers and willing sellers.

Rich Jeanneret, Americas Vice-Chair, Transaction Advisory Services at Ernst & Young LLP, says: “According to our findings, there’s tempered exuberance among executives around the globe. M&A is still very much on the agenda, but we’re noticing a bit of a wait-and-see pattern.”

“While confidence in the economic recovery has waned somewhat over the past six months, our survey shows firms are looking to put their cash to work organically as boardrooms take a more cautious approach. There’s less of a focus on top-line growth through M&A and a greater emphasis on performance improvement.”

Seventy-five percent of respondents are now focused on organic growth as their capital allocation priority, through restructuring and performance improvement, compared to 66% six months ago.

Emerging markets targeted

Most companies recognize the imperative for an emerging markets strategy to position them for future growth and plan M&A accordingly. A third (31%) said they were likely to undertake or seriously consider an emerging market acquisition in the next six months. By contrast, interest in developed markets acquisitions has remained flat over the last six months.

Over half of those who planned to invest in the emerging markets expect to enter via a joint venture or strategic alliances, which also show an upward trend.

Jeanneret says: “Our survey finds evidence of a ‘two–speed’ recovery as emerging markets are continuing to attract attention, even more so then they did a year ago while interest in developed economies has been flat. Companies are looking to take advantage of opportunities and resources in these growing economies.”

Credit conditions improve

Overall optimism is increasing for local economies, as 67% of respondents feel more confident about the prospects of their local economy compared in April. Levels of confidence in India (92%) and China (82%) remain high compared to six months ago, but former leader Australia drops out of the top five most confident economies. Russia (89% from 47% in April) and Germany (84% from 64%) enter the top five, while France (66% from 44%) has also seen a large rise in confidence.

In contrast, the outlook for the global economy is less optimistic, with 34% believing recovery will happen within the next 12 months, compared to 40% six months ago.

Steve Krouskos, Global and Americas Markets Leader, Transaction Advisory Services at Ernst & Young LLP, says: “Market confidence-made up of consumers, investors and credit markets-is the primary driver of deal activity.”

Over half (58%) said credit conditions were better now than in April. However, the global picture is patchy. Among the BRIC nations, the majority of executives said the situation had improved, but in the UK and US, only 33% and 47% respectively, see such an improvement.

Companies’ increasing ability to invest in their business is fortified by easing access to finance. Low rates have made debt markets increasingly attractive, and banks have been willing to work with borrowers’ circumstances.

Indeed, of the companies considering M&As, 61% are planning to fund deals with cash, while bank loans have increased too, other forms of debt and bonds have declined considerably.

As a result, 52% of companies have no need to refinance loans or other debt obligations, an increase of nearly 10% on April 2010. Of the 48% of companies that do need to refinance, 63% plan to do it within the next 12 months.

High risk – high reward

With many more companies now in a strong cash position they could well be placed to take advantage and make ‘all cash’ offers to shareholders. While buyers are likely to pay a premium now, in two years they may pay even bigger premiums.

There will be opportunities to make a game-changing strategic move – the risks may be high but so too are the rewards. How organizations manage their capital today will define their competitive position tomorrow.

About the survey

The Ernst & Young Capital confidence barometer is a survey of over 1000 senior executives from large companies around the world and across industry sectors. The objective of the Barometer is to gauge corporate confidence in the economic outlook, to understand boardroom priorities in the next 12 months, and to identify the emerging capital practices that will distinguish those companies that will build competitive advantage as the global economy continues to evolve. This is the third half-yearly Barometer in the series, which began in November 2009.

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information, please visit

This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.

SOURCE Ernst & Young

Flint Energy Services Ltd. (Flint, the Company) announced that it was awarded a new six-year contract by Imperial Oil Canada Limited for field construction work in Western Canada. The contract includes the construction of a pipeline connection in northeast British Columbia, as well as construction of other field facilities in Saskatchewan, Alberta and British Columbia. The agreement also has provision for a further four-year extension after the initial six-year term.

The work will be performed by a number of branches of Flint’s Production Services Division in Western Canada.

W. J. (Bill) Lingard, President and Chief Executive Officer of Flint stated, “We are very pleased to have been awarded this work which will continue over an extended period of time and involve many of Flint’s locations in Western Canada. Our geographic reach, safety record and reputation for project execution, being on time and on budget, have positioned Flint to be able to win these large multi-year contracts with major producers who have oil and gas assets across Western Canada.”

Flint Energy Services Ltd. is a market leader providing an expanding range of integrated products and services for the oil and gas industry including: production services; infrastructure construction; oilfield transportation; and maintenance services. Flint, with more than 10,000 employees, provides this unique breadth of products and services through over 60 strategic locations in the oil and gas producing areas of Western North America, from Inuvik in the Northwest Territories to Mission, Texas on the Mexican border. Flint is a preferred provider of infrastructure construction management, module fabrication, maintenance services for upgrading, and production facilities in Alberta’s oil sands sector.


All statements other than statements of historical fact contained in this news release may be “forward-looking statements”. Such forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in the forward-looking statements, and as such, they should not be unduly relied upon. The forward-looking statements are made as of the date of this news release and Flint assumes no obligation to update or revise them, except as expressly required by applicable securities law. Further information regarding risks and uncertainties relating to Flint and its securities can be found in the disclosure documents filed by Flint with the securities regulatory authorities, available at

SOURCE Flint Energy Services Ltd.

Jumbo Mortgages Fall Below 5%

Total Mortgage Services, LLC, a leading mortgage lender and broker that offers some of the lowest mortgage rates available, announced today that its 30-year fixed jumbo mortgage rates are back below 5 percent for qualified borrowers. Currently, Total Mortgage is offering qualified borrowers a 30-year fixed jumbo mortgage up to $729,000 at rate of 4.875 percent and an APR of 4.932 percent with 0 points.

“The jumbo market is seeing significant improvement in both competitively priced rates and market liquidity. Many borrowers are taking advantage of this opportunity to lock-in low rates,” commented John Walsh, President of Total Mortgage. “Our team of experienced loan officers are responding to an increase in inquires for jumbo products from borrowers looking to take advantage of some of the lowest jumbo rates in the decades. In effect, the tremendous drop in rates has increased the number of both purchase and refinance transactions. Although underwriting standards remain rigorous, we are seeing an increase in the number of borrowers with strong credit qualifying for a more affordable jumbo mortgage with very attractive terms.”

Jumbo mortgage rates are typically higher than current mortgage rates when compared to conforming mortgage loans because of the increased loan size. Jumbo mortgage loans are mortgage loans that surpass the loan limits set forth by Fannie Mae and Freddie Mac. This is why Jumbo mortgage loans are also referred to as non-conforming loans. For example, if a potential borrower is considering purchasing or refinancing a house that costs more than the Fannie Mae conforming limit, $417,000 to $729,750 depending upon location, they will need to get a jumbo mortgage.

Jumbo mortgage rates are always changing depending on many different factors. As of 9:30 A.M. on October 12, 2010, Total Mortgage was quoting the following mortgage rates:

Jumbo Mortgage Rates as of Oct 12, 2010 (also see the chart). (Conditions Apply.)

30 Year Fixed Jumbo Mortgage: 4.875% with 4.890% APR with 0 Points for 30 day lock
15 Year Fixed Jumbo Mortgage: 3.625% with 3.971% APR with 0 Points for 30 day lock
5/1 ARM Jumbo Mortgage: 3.250% with 3.251% APR with 0 Points for 30 day lock
1/1 ARM Jumbo Mortgage: 2.851% with 2.808% APR with 0 Points for 30 day lock

To speak with an experienced loan officer about a jumbo mortgage, please call 1-877-868-2509 or email contact(at)totalmortgage(dot)com.

Borders® and BookBrewer Offer eBook Publishing Tools

Borders® and BookBrewer Offer eBook Publishing Tools

Borders® today announced that it has teamed with BookBrewer to launch BORDERS – GET PUBLISHED™ Powered by BookBrewer. The co-branded publishing service empowers independent authors to publish and sell eBooks through the Borders eBook store, powered by Kobo, as well as other eBook retailers. BORDERS – GET PUBLISHED™ Powered by BookBrewer makes it seamless for any writer or blogger to format, display and sell their content across a number of technology platforms including a variety of tablets and eReading devices. The service will be available at beginning Oct. 25.

“We know many book lovers are also writers or aspiring authors who want to share their stories but do not want to invest the time and money to self publish in print,” said Mike Edwards, CEO of Borders, Inc. “BORDERS – GET PUBLISHED™ Powered by BookBrewer offers the perfect solution — authors can quickly and easily load, format and publish content, which will then be available for sale within a few days on and other major eBook outlets. We’re excited to give new writers and bloggers an opportunity to reach an expanded audience as they make their foray into digital.”

Users can develop and edit content regardless of length, set their own suggested price within bounds set by retailers, and publish via BookBrewer in the Borders’ eBook store. Customers are provided with the option to purchase, download, and instantly read blogger and independent author content on several leading devices, including the iPhone®, iPad™, Android™-powered tablets as well as a variety of eReaders, notably the Kobo™ Wireless eReader, Kobo™ eReader, Aluratek Libre Pro and Velocity® Micro Cruz™ Reader.

Creating an eBook can be done in a few simple steps using the intuitive BookBrewer tools. Authors can add content by typing or copying and pasting it into an online form, or they can feed in their content from an existing Web site or blog. With the click of a button, they can arrange and edit content as they wish. The content is saved as an ePub file — the format most eBook stores require to sell a book.

“Everyone has a story to tell, pictures to share or advice to give. It turns out that those are exactly the kinds of things people want to buy and read as eBooks,” said BookBrewer CEO Dan Pacheco. “We’re thrilled to have the opportunity to work with an iconic brand like Borders, which not only has an incredible customer base, but also has a great local community focus.”

BORDERS – GET PUBLISHED™ Powered by BookBrewer gives authors a choice of two publishing packages: the $89.99 basic package and the $199.99 advanced publishing package. Under the basic package, BookBrewer will assign the book an ISBN (a $125 value), and will make it available to all major eBook stores at a price set by the writer.  Royalties will be based on sales and will vary with each retailer. Authors who choose the advanced package will receive a full version of their ePub file, which they will own and may share with friends, family or submit on their own to eBook stores.

Capital Gold Corporation (NYSE AMEX:  CGC; TSX: CGC)Reports 95% Cash Flow Increase

Capital Gold Corporation (NYSE AMEX: CGC; TSX: CGC)Reports 95% Cash Flow Increase-Image by hto2008 via Flickr

Capital Gold Corporation (NYSE AMEX: CGC; TSX: CGC) (“Capital Gold” or the “Company”) reported today approximately a 42%  increase in revenue for fiscal 2010 and a 95% increase in cash flow from operations for fiscal 2010 compared to the previous year.  The Company recorded gold sales of 54,304 ounces for fiscal year end July 31, 2010, and expects to produce between 65,000-70,000 gold ounces in fiscal 2011.

Below is a table comparing both fiscal 2009 and 2008 performance to fiscal 2010.

For the year


July 31,


For the year


July 31,


For the year


July 31,


Summary of Annual Results

(000’s except per share data and ounces sold)

Revenues 60,645 42,757 33,104
Net Income 11,994 10,407 6,364
Basic net income per share 0.25 0.22 0.15
Diluted net income per share 0.25 0.21 0.13
Gold ounces sold 54,304 48,418 39,102
Average price received $1,117 $883 $847
Cash cost per ounce sold(1) $391 $271 $276
Total cost per ounce sold(1) $444 $314 $335
(1) “Cash costs per ounce sold” is a Non-GAAP measure, which includes all direct mining costs, refining and transportation costs, by-product credits and royalties as reported in the Company’s financial statements.  It also excludes intercompany management fees.  “Total cost per ounce sold” is a Non-GAAP measure which includes “cash costs per ounce sold” as well as depreciation and amortization as reported in the Company’s financial statements.

The following table reconciles the Non-GAAP measure “Cash costs per ounce sold” to the GAAP measure of “Costs applicable to sales per ounce sold”:

Reconciliation from non-GAAP measure to US GAAP For the year


July 31,


For the year


July 31,


For the year


July 31,


Cash cost per ounce sold $391 $271 $276
Intercompany management fee 12 14 10
Other 2 2 (13)
Costs applicable to sales per ounce sold(2) $405 $287 $273
(2)  This measurement excludes depreciation and amortization

“This has been an exceptionally productive year for Capital Gold,” said Company President Colin Sutherland.  “We continue to develop the Orion and Saric exploration projects and optimize operations at our El Chanate open pit mine as we increase production in order to achieve our fiscal year 2011 goal of producing 65,000 to 70,000 ounces of gold.”

Highlights from the year ended July 31, 2010, as compared to the prior year include:

  • Cash flow from operations increased 95%
  • Revenue increased 42%
  • Net income increased 15%
  • Basic net income per share increased 14%
  • Gold ounces sold increased 12%

Outlook and Strategy

  • The Company expects fiscal 2011 gold sales of 65,000 to 70,000 ounces;
  • Cash costs per ounce sold for fiscal 2011 are expected to be approximately $485 per ounce;
  • We anticipate capital expenditures of approximately $12,500 in fiscal 2011 with $7,200 being allocated to leach pad expansion, $1,500 for the addition of agglomeration equipment, $750 in property interest payments; and $600 for additional conveyors; (3)
  • Repayments on Credit Facility of approximately $3,600 during fiscal 2011. (3)

(3)  These amounts are in the 000’s.

Lender Processing Services, Inc. (NYSE: LPS) Show Foreclosures Higher in September

Lender Processing Services, Inc. (NYSE: LPS) Show Foreclosures Higher in September-Image via CrunchBase

Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and analytics to the mortgage and real estate industries reports the following “first look” at September month-end mortgage performance statistics derived from its loan-level database of nearly 40 million mortgage loans.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 9.27%
Month-over-month change in delinquency rate: 0.6%
Year-over-year change in delinquency rate: -7.8%
Total U.S foreclosure pre-sale inventory rate: 3.84%
Month-over-month change in foreclosure presale inventory rate: 1.1%
Year-over-year change in foreclosure presale inventory rate: 3.6%
Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,963,000
Number of properties that are 90 or more days delinquent, but not in foreclosure: 2,319,000
Number of properties in foreclosure pre-sale inventory: (B) 2,055,000
Number of properties that are 30 or more days delinquent or in foreclosure:  (A+B) 7,018,000
States with highest percentage of non-current* loans: FL, NV, MS, GA, LA
States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.


  1. Totals are extrapolated based on LPS Applied Analytics’ loan-level database of mortgage assets
  2. All whole numbers are rounded to the nearest thousand

The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by in-depth charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available on LPS’ Web site,, on October 29, 2010.

For more information about gaining access to LPS’ loan-level database, please send an e-mail to

About Lender Processing Services

Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology, services and mortgage performance data and analytics, to the mortgage and real estate industries. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, workflow automation (Desktop), portfolio retention and default, augmented by the company’s award-winning customer support and professional services. Approximately 50 percent of all U.S. mortgages by dollar volume are serviced using LPS’ Mortgage Servicing Package (MSP). LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. For more information about LPS, visit

SOURCE Lender Processing Services, Inc.

Commercial Real Estate Forecast Brighter

Commercial Real Estate Forecast Brighter

Commercial Real Estate Forecast BrighterImage via Wikipedia

After three years of dislocation and unprecedented loss, commercial real estate industry investors and professionals hint at hopeful signs of tempered commercial real estate market improvements, according to respondents of the Emerging Trends in Real Estate® 2011 report, released today by PwC US and the Urban Land Institute (ULI).

Survey respondents indicate a lowering of performance expectations, anticipating high single digit returns for core properties and mid-teen returns for higher risk investments.  Without ample leverage and attendant risk, real estate assets cannot sustain higher performance, according to survey respondents.  The survey finds that lenders with strengthening balance sheets finally step up foreclosure activity and dispositions of properties during 2011 and 2012, helping values reset 30-40 percent below 2007 peaks.

“The market is predicting extreme bifurcation as the capital flight to quality creates a greater separation between the trophy and less desirable assets,” said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC.  “Well-located and well-tenanted properties that can generative strong cash flow over the next several years are exactly what buyers and lenders want, according to survey respondents.  As a result, prime apartments and office buildings in gateway cities are generating the most attention from the increasing pent-up sidelined capital.”

Debt Market Loosens Further in 2011

The report indicates debt markets thawing further in 2011 as banks continue to strengthen balance sheets, take their losses and step up lending, resulting in higher transaction volumes.  Borrowers are expected to have improved chances to obtain refinancing if they own relatively well-leased cash flowing properties.  But overleveraged owners dealing with high vacancies and rolling down rents may face more uncertain prospects in the credit markets, including the increasing likelihood of foreclosure.

Real Estate market participants continue to see a gulf between buyers and sellers, however, there is an expectation that the ‘bid-ask’ spread will begin to close in 2011 as selling sentiment improves dramatically from last year’s all time survey lows and buyers temper expectations for giant discounts,” said ULI Senior Resident Fellow for Real Estate Finance Stephen Blank.  “Investors with cash could have excellent opportunities to seize market bottom plays by recapitalizing cash-starved owners or buying foreclosed assets.”

Respondents to the Emerging Trends cite the best investor bets for 2011 which include:

  • Temper expectations – Buy well-leased core assets and look for 6 to 7% cash flows.
  • Lock-in leverage – Mortgage rates can’t get much lower and cyclical bottom is the optimum time to leverage properties in order to magnify future value gains as property fundamentals ameliorate.
  • Provide debt and recap equity – Players who fill the gap on assets with lowered cost bases can obtain excellent risk-adjusted returns up and down the capital stack, including mezzanine debt and preferred equity, if not loan to own opportunities.
  • Focus on global gateways, 24-hour markets – Everybody wants to be in the primary coastal cities with international airport hubs.
  • Favor infill over fringe – The ‘move back in’ trend gains force as twenty-something Echo Boomers want to experience more vibrant urban areas and aging Baby Boomer parents look for greater convenience in downscaled lifestyles.
  • Patience is a virtue – Transaction activity will increase and more value add and distressed deals will appear.
  • Buy or hold REIT – Survey respondents expect solid cash flowing returns.
  • Buy land – It won’t get any cheaper than now, but prepare to wait for the right development opportunity.
  • Exercise caution on distressed loan pools – They could be a recipe for disaster if you don’t underwrite the assets properly.

Markets to Watch

Survey participants believe the 24-hour cities will always dominate and outshine secondary markets.  This year, the top Emerging Trends markets selected by survey respondents offer no surprises – Washington D.C. pulls away from the pack, followed by San Francisco, Boston and Seattle, as the pre-eminent gateway cities.  Houston and Denver solidify rankings and respondents show faith in South California’s resiliency, despite recent setbacks.  While ratings improved for markets from coast to coast over 2010’s results, the gap between top and bottom continues to widen, and more than 60 percent of surveyed cities still fall below “fair” ratings for commercial and multifamily investment prospects.

A snapshot of the top five markets ranked by survey respondents:

Washington D.C. Never far from the top, the nation’s capital will hold onto its top ranking as long as the economy labors. The federal government never downsizes while lobbyists and consultants swarm legislators and agencies hoping to influence or stop regulatory changes.  All the activity cushions property markets and attracts investors and no market benefits more from core buyers’ recent flight to quality, driving prices back up.

New York. TARP and Fed funds directed at banks helped financial markets and eased job cuts, triggering the biggest ratings jump for New York.  As major financial employers enjoy record profits, ramp hiring and foreign investors remaining active, lenders are loosening purse strings for trophy office owners.  Apartment rents rebound along with coop/condo prices, which registered only minor drops in top neighborhoods, and retailers begin to fill in gaps in empty streetscape storefronts.  New hotel completions could temper a recovery in occupancies and room rates, but tourists and business travelers are back in droves.

San Francisco. The country’s most volatile 24-hour market, the City by the Bay now offers investors excellent near-market bottom buying opportunities, particularly in apartments and hotels (ET survey #1 buy), office (ET #2), and retail (ET #3).  The market also sidesteps some of its state’s fiscal mess, performing better than Southern California.  Tech and life science industries flourish around top flight universities (Stanford, UC Berkeley), help attract brainpower, and sustain expensive regional living standards.

Austin. A smaller Texas market that scores highest ratings and survey participants note “everyone wants to live in Austin.”  As the state capital and home to a major university (hook ’em, Horns), Austin is one of the few cities in the Sunbelt with growth restrictions.

Boston. This venerable 24-hour city registers high marks for livability, controlled development, and a highly educated labor force, but lacks economic vibrancy.  Office rents didn’t drop precipitously off pre-crash 2007 highs, but remain well below 2000 peaks, and local brokers predict only a slight turnaround in 2011. Apartment rents will track back up as expensive for sale housing keeps tenant demand high for multifamily units, and hotels show life.

Rounding out the top ten markets to watch:

  • Seattle gets a boost from in-migration to the area adding 160,000 new residents since the recession.
  • San Jose aligns with San Francisco gateway benefits, including a flourishing tech and life sciences industry.
  • Houston is expected to come out stronger from the recession than most states, creating more real estate demand.
  • Los Angeles remains an attractive location with Southern California serving as the most important gateway to the Pacific Rim and Latin America.
  • San Diego tracks closely to Los Angeles with its desirable climate albeit the gateway status.

Among property sectors, the survey finds that apartments outrank all other sectors—favorable demographics and the housing bust should increase renter demand and some interviewees forecast rent spikes by 2012 in some infill markets where development activity has ground to a halt.  Readily available financing from Fannie Mae and Freddie Mac bolsters buying activity.  Core players also like warehouses and infill grocery anchored retail, while full service center city hotels remain the top choice for opportunity investors.  Suburban office gets the cold shoulder in the survey.

Now in its 32nd year, Emerging Trends is the oldest, most highly regarded annual industry outlook for the real estate and land use industry and includes interviews and survey responses from more than 1000 leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.

A copy of Emerging Trends in Real Estate® 2011 is available at or

Mortgage Rates Slip Lower

Mortgage Rates Slip Lower

Mortgage Rates Slip Lower

Rates for most mortgage products fell to new lows, but the average rate on the benchmark conforming 30-year fixed mortgage rate inched higher to 4.47 percent, according to’s weekly national survey. The average 30-year fixed mortgage has an average of 0.35 discount and origination points.

To see mortgage rates in your area, go to

The average 15-year fixed mortgage slipped to 3.85 percent, and the larger jumbo 30-year fixed rate retreated to 5.10 percent, both record lows. Adjustable rate mortgages hit new lows also, with the average 5-year ARM declining to 3.62 percent and the average 7-year ARM backpedalling to 3.86 percent.

Mortgage rates were mostly lower this week, for both fixed and adjustable rate loans. While the Federal Reserve is likely to resume a bond purchase program designed to push interest rates lower, don’t assume this will automatically translate into lower mortgage rates. Why? For starters, the current foreclosure moratorium mess raises both the cost and the amount of time involved in foreclosure, factors that could ultimately be passed along to future borrowers through higher mortgage rates.

The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.47 percent, the monthly payment for the same size loan would be $1,009.81, a savings of $232 per month for a homeowner refinancing now.


30-year fixed: 4.47% — up from 4.45% last week (avg. points: 0.35)

15-year fixed: 3.85% — down from 3.87% last week (avg. points: 0.33)

5/1 ARM: 3.62% — down from 3.64% last week (avg. points: 0.33)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. More than half of the panelists, 59 percent, say mortgage rates aren’t headed much of anywhere and will remain more or less unchanged. More than one in four respondents, 29 percent, expect mortgage rates to move higher while just 12 percent predict further declines over the next week.

For the full mortgage Rate Trend Index, go to

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