The real estate industry has been bracing for new accounting regulations that would require all lease obligations to remain on the balance sheet. But Mindy Berman, managing director of corporate capital markets at Jones Lang LaSalle, points to two overlooked issues: Sale leasebacks should be much easier to execute under the new regulations, which are expected to be released this month, and real estate retail will take a big hit from them.
Mexican private pension funds, called Afores, are expected to double their investments in private equity this year, with real estate and infrastructure among their prime targets. This month alone, they have invested $460 million. AMB Property started a real estate fund with $260 million in pension investments. GE Capital is also developing such a fund.
Prices for Fannie Mae and Freddie Mac mortgage bonds declined because of concern that home-loan refinancing will pick up after an announcement by the Federal Reserve that it will purchase more government notes. Mortgage securities reached an all-time high in July but have since dropped. Concern is mounting that more homeowners will refinance and policymakers will alter rules to aid struggling borrowers.
Merrill Lynch analyst James Feldman has upgraded SL Green Realty to "buy from "neutral," citing a $67 per-share price target. He noted SL Green has underperformed the office REIT category in the past three months but also noted the beginning of a recovery in New York's office market would benefit the company.
Losses on commercial mortgage-backed securities continued to rise in the second quarter, Moody's Investors Service reports. The weighted average loss severity rate is now 35.4%, up from 34%. That number will rise even higher as loans originated from 2006 to 2008 are liquidated, Moody's senior analyst Keith Banhazl says.