Archive for February, 2009
Lehman Brothers’ Real-Estate Carcass battle.
Lehman Brothers Holdings Inc.’s bankruptcy has turned the real-estate industry into a world of haves and have-nots. When the investment bank collapsed in September, its property assets alone were valued at a staggering $43 billion, making it one of the largest real-estate bankruptcies ever.
Since then, Lehman’s partners, creditors and vendors in hundreds of property deals have been fighting for what is left of the investment bank’s real-estate carcass. Typically, partners of a company in bankruptcy can squeeze more funding for a project by convincing the judge that the investment will increase the value of the estate in the long run.
But that is a difficult argument to make in the worst commercial real-estate market in decades. Lehman plans to tap some of its $6 billion cash hoard to prop up selected real estate plays. For instance, Lehman received the court’s permission to allocate $230 million to apartment giant Archstone to keep it afloat.
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Sales way down, prices holding.
The frozen market may actually be an asset once recovery occurs. Do you believe it? If the answer is NO, then you should read the article below.
Over $1 billion in real estate was sold in 2008, according to the year-end report from the Park City Board of Realtors. That’s nothing to shake a stick at. It’s only been since 2004 that sales that high have been achieved in Summit County.
The number of transactions, however, was so low mostly due to the fourth quarter that the last comparable year was 1992, said board president Lincoln Calder. Now here come the bad news:
For Realtors who depend on quantity of sales for their living, like those who specialize in condo or land sales, it’s a perfect storm. Homeowners in the Park City area typically made their purchase as an investment. They aren’t foreclosing, aren’t interested in selling it cheap and are more than willing to wait until the economy improves, explained Jim Lewis of Summit Sotheby’s.
Shoppers used to seeing real estate markets crash in their hometowns, come to Park City hoping to find similar deals in a highly desirable location. They know they can get a lot for their money in this economy and are looking to make a killing. The result is deadlock.
So what is the good news?
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