The Golden Truth: NYC Commercial Real Estate: It's Getting Worse

Wednesday, March 10, 2010

NYC Commercial Real Estate: It's Getting Worse

Another big NYC real estate mogul is taking gas on one of his buildings. Unfortunately, the beneficiaries (teachers) of his co-owner, the California State Teachers Retirement System, will most likely bear the economic brunt of this "imminent default," as I'm sure Larry Silverstein has taken more out in fees connected with the deal than he has left in as equity, or would be on the hook for when the deal takes a dirt nap. Recall, Silverstein was the real estate guy who profited handsomely from the destruction of the World Trade Towers, as he benefitted nicely from the property and casualty insurance policy he had recently re-upped on the WTC complex.

Here's a link to the article: Another one bites the dust Here's a cool view of the building: LINK

If I had to guess, knowing what I know about how big State pension funds are marking their private equity and real estate holdings, I would bet that CalSTers has this investment fully valued. It seems it's always the little guy who gets screwed these days, as the teachers who rely on CalSTers for their retirment income will take a big hit on this one and many others like it.

2 comments:

JoeThursday, 11 March, 2010
Dave,

This excerpt is from Jim Willie's latest over at GoldSeek.

" Last week, USFed Chairman Bernanke cast aside Mark-to-Market once again, so that heavy commercial loan losses could be ignored."

The FASB should be renamed as "F*cked Accounting Sterilization Board".

Joe M.
ReplyDelete
Replies
Dave in DenverThursday, 11 March, 2010
Thanks Joe. I actually know for a bona fide FACT that banks are way overmarked on their CRE paper. A very good friend of mine (one of my best) is involved in real estate workout consulting. He told every deal he looks where the underlying property is worth at best 50 cents on the dollar, the big bank lender has teh loan marked at par. Every single one. We're talking BAC, WFC etc.
ReplyDelete
Replies

Add comment

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.