Here are some other news and notes on retail and retail real estate from around the Web today.
Goldman Sach's earnings report today revealed that commercial real estate remains a concern for banks. Goldman had $700 million in losses on commercial real estate. Updated: Chris Rodriguez from RetailChatr points out that Goldman's losses were actually $1.2 billion once you factor in $500 million in real estate principal investments. The $700 million was on its commercial mortgages.As one analyst put it, "This is the lingering-write-down asset class. There is a fair amount of pain to be had across the industry."
According to Bloomberg, Leon Black's Apollo Global Management LLC plans to raise $600 million in a public offering of shares in its only commercial property investment fund. The company, Apollo Commercial Real Estate Finance Inc., will be organized as a REIT and will focus on properties in major cities. It is targeting distressed real estate.
We posted our weekly news analysis and looked at how commercial real estate lenders are willing to extend and pretend rather than foreclose on troubled assets.
Alan Weiss, who was a partner in Case Shiller Weiss, the firm that developed the Case Shiller index, believes he and his partners have developed one of the answers to how the property world gets re-equitised. Essentially, they intend to float unlevered real estate investment trusts, specialised initially in multi-family rental housing, that will pay dividends to the public, not interest and principal repayments to the lenders.
What makes this economic, he says, is that “debt has gotten so expensive that equity is competitive. While equity markets have fallen, they have continued to work while the debt markets have shut down.”