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Strategies & Market Trends : Commercial Real Estate tic.............tic,,, -- Ignore unavailable to you. Want to Upgrade?

To: jmiller099 who wrote (14)	9/29/2008 1:00:18 PM
From: Smiling Bob	Respond to of 442

good point The vacancies are definitely piling up, but still a long way to go. As long as I see far fewer properties for lease than in past, softer recessions; I'll continue adding to positions. How many bailout bucks are heading for CRE or will even impact it enough even indirectly? --- REIT shares pounded by shortage of debt financing Wed Sep 17, 2008 8:43pm EDT By Ilaina Jonas NEW YORK, Sept 17 (Reuters) - Shares of U.S. real estate investment trusts were pounded on Wednesday, with those with the most need to refinance their debt taking the biggest beating, an analyst said. U.S. commercial real estate overall is facing a slower leasing market as consumers rein in their spending and businesses contract. Commercial real estate relies heavily on debt to finance properties and boost returns. "In the current environment no one is lending," RBC Capital Markets analyst Rich Moore said. "Somehow, commercial real estate has gotten a black eye. Not only don't the bankers want to lend to each other, they don't want to lend real estate either." The MSCI U.S. REIT Index, a yardstick used to measure REIT share performance, fell 5.5 percent on Wednesday. It is down 7.36 percent since the start of the year. REITs that rely on the financial industry were slammed. Vornado Realty Trust VNO.N closed down 7.5 percent, or $7.12 per share, to $88.00. SL Green SLG.N closed down 6 percent, or $4.32, at $66.60, and touched $65.54 during the day, its lowest price since November 2005. But shares of those facing refinancing pressure were beaten down further. General Growth Properties Inc GGP.N shares closed down 14 percent, or $3.29, to $20.37. "The market recognized that they need debt capital, and they need it very soon," Moore said. "This is the wrong time to need money, and GGP needs money." At the end of the second quarter, General Growth said it was facing $2.42 billion in refinancing for the rest of the year. It has since repaid at least $391 million. It faces $3.33 billion of maturing debt in 2009. Much of its debt comes from its 2004 acquisition of Rouse Cos for $7.2 billion plus the assumption of $5.4 billion in Rouse debt. Unlike companies such as Simon Property Group Inc SPG.N, Kimco Realty Corp KIM.N and Federal Realty Investment Trust FRT.N, which all have debt to market capital of about 40 percent to 25 percent. Chicago-based General Growth's is about 70 percent. Maguire Properties Inc MPG.N, took on a load of debt when it bought the Orange County, California portfolio of properties from Blackstone for $2.875 billion in 2007. Five of the southern California-focused REIT top 10 tenants are banks or finance companies. At the end of the second quarter, it had about $537 million of debt maturing within nine months. Its shares closed down 12 percent, or 99 cents, to $7.11, and hit an intraday low of $7.08 - its lowest price since becoming a public company in 2003. (Reporting by Ilaina Jonas; Editing by Leslie Gevirtz)