The RED Wrap: Bad debts die hard Wed, 22 Feb 2012 13:40:00 EST Erik Ipsen - Bad debts just don't die like they used to do. That's one big reason why, more than three years after the crash, the nation's commercial real estate market remains in the sick ward. |
Lehman wins approval to boost 1st credit payout Wed, 22 Feb 2012 10:13:09 EST  (Bloomberg) - Lehman Brothers Holdings Inc., the defunct investment bank that filed for bankruptcy more than three years ago, won court approval for a plan that may boost its first payment to creditors by about $2.8 billion. U.S. Bankruptcy Judge James Peck in Manhattan signed off on a proposal Wednesday to limit cash reserves for disputed claims, which Lehman said will free up cash and allow increased initial distributions to creditors with approved claims. Judge Peck at a court hearing described Lehman’s plan as an “appropriate balancing” of the needs of creditors whose claims have been allowed and those that are fighting with Lehman over claims. Lehman filed the biggest bankruptcy in U.S. history in 2008 and won court approval in December for its plan to pay creditors. CEO Bryan Marsal has said he intends to raise $65 billion from the firm’s assets in the next few years, giving the average creditor less than 18 cents on the dollar for estimated claims of about $370 billion. Judge Peck approved a plan to use non-cash assets for a portion of reserves for disputed claims. The aggregate amount of disputed claims for which Lehman must maintain reserves is about $112 billion, the firm said in a court filing. Lehman had argued that it would be “inequitable” to delay distributions to creditors that reached settlements over claims because of the need to retain “unusually large” cash reserves for disputed claims. The request was supported by the committee representing unsecured creditors. “We believe there is no risk that a creditor will bear permanent risk of nonpayment,” Dennis Dunne, a lawyer for the group, said at the hearing. Lehman estimates that allowed claims of general unsecured creditors total more than $280 billion, according to a court filing. It said it could distribute $11.9 billion to $14.7 billion of cash initially, depending on cash reserves for disputed claims. |
7-Eleven steps on the gas in Manhattan Wed, 22 Feb 2012 11:50:02 EST  7-Eleven is taking a big gulp out of Manhattan. Last year, the Dallas-based chain known for its Slurpee beverages, embarked on an aggressive roll-out here by signing 15 leases for sites. Now the company says it has no intention of easing back.With a dozen outposts already up and running in Manhattan, the chain's parent, Seven & I Holdings Co. expects to open as many as another 14 this year, some of those in spaces leased last year, others in locations not yet set. In coming months new stores will bow in neighborhoods including midtown, Greenwich Village, Chelsea and the Upper East Side. The company is also eying the Financial District. Beginning next year, 7-Eleven plans to ramp things up, adding 20 locations—ranging in size from 1,500 square feet to 3,000 square feet—every year until 2017. “Between the number of folks living in Manhattan, coupled with the worker population, there's significant demand and opportunity,” said Dan Porter, vice president of real estate at 7-Eleven. Sean Duffy, 7-Eleven's senior vice president for development, noted that the outposts now open here are all performing well, due largely to fresh food sales of lunch items like salads, sandwiches and hotdogs. “It's a very (strong) market for us,” he said. At this rate the chain, which is all but ubiquitous in many parts of the country, may provide more competition for drugstore Duane Reade, which has also been ramping up its fresh food offerings to meet increasing demand. The company, which boasts 7,200 locations across the U.S. and a whopping 44,000 worldwide, is working toward converting many of its corporate-owned outposts to franchised outlets. In New York that also means working with existing bodega owners to persuade them to transform their businesses into 7-Elevens. Three such conversions will open here this year, Mr. Porter said. Typically it costs between $200,000 and $1 million to open a 7-Eleven franchise. Ariel Schuster, executive vice president at Robert K. Futterman & Associates, noted that the chain's strong balance sheet appeals to many local landlords. “It is a national-credit tenant, poised for growth and has capital dollars to invest,” he said, noting there are still plenty of empty spaces in Manhattan for the chain to fill. |
US home sales climb 4.3% to 20-month high Wed, 22 Feb 2012 10:42:31 EST Bloomberg News - (Bloomberg) - Sales of previously owned U.S. houses rose in January to the highest level since May 2010, adding to signs the housing market is regaining its footing. Purchases climbed 4.3% to a 4.57 million annual rate, less than forecast, from a revised 4.38 million pace in December that was slower than previously estimated, a report from National Association of Realtors showed Wednesday in Washington. The median forecast in a Bloomberg News survey called for a rise to 4.66 million. Prices and inventory fell. A strengthening job market, combined with record affordability driven by low home prices and mortgage rates, is helping underpin demand. Nonetheless, the Federal Reserve and Obama administration are striving to find ways to lend the industry additional assistance amid concern mounting foreclosures will continue to hinder the recovery. “It's not a huge improvement, but at least we're not hitting new lows, which is good news,” Jennifer Lee, an economist at BMO Capital Markets in Toronto, said before the report. “Foreclosures are still a big part of the problem for the housing market.” Estimates of the 74 economists surveyed by Bloomberg ranged from 4.4 million to 4.91 million after a previously reported 4.61 million pace in December. Existing-home sales, tabulated when a contract closes, climbed to 4.26 million last year, from 4.19 million in 2010. Demand peaked at 7.1 million in 2005 during the housing boom. In 2008, sales totaled 4.1 million, the least since 1995. The number of previously owned homes on the market dropped to 2.31 million, the fewest since March 2005. At the current sales pace, it would take 6.1 months to sell those houses, the lowest since April 2006, down from 6.4 months in December. The median price of a previously-owned home fell 2% to $154,700 from $157,900 in January 2011, Wednesday's report showed. The median price dropped to $166,100 last year, the lowest since 2002, from $172,900 in 2010. Sales of existing single-family homes increased 3.8% to an annual rate of 4.05 million. Purchases of multifamily properties, including condominiums and townhouses, rose 8.3% to a 520,000 pace. Purchases rose in all four U.S. regions, led by an 8.8% gain in the West and a 3.5% increase in the South. The fourth-warmest January on record may have helped bring out homebuyers. The National Oceanic and Atmospheric Administration reported the average temperature was 36.3 degrees Fahrenheit, 5.5 degrees above the 1901-2000 long-term average. The favorable conditions helped spark Home Depot Inc.'s biggest sales gain since the first quarter of 2004. The world's largest home-improvement retailer said Tuesday that receipts at stores open at least a year climbed 5.7% in the three months ended Jan. 29. Net income increased 32%, the Atlanta-based company said. Wednesday's housing report showed contract cancellations were reported by 33% of the group's members in January, the same as a month earlier. Of all purchases, cash transactions accounted for about 31%, about the same as a year ago. Distressed sales, comprised of foreclosures and short sales in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 35% of the total, up from 32% a month earlier. Investors accounted for 23% of purchases last month, while first-time buyers were 33% of the market. One asset has been the improvement in employment. The jobless rate fell in January to a three-year low of 8.3%, and payrolls rose by 243,000 workers. Employment growth has accelerated in each of the past three months. Greater affordability is also supporting home demand. The Realtors group's measure of whether households earning the median income can afford a median-priced house at current interest rates reached record levels in the last three months of 2011. Reports last week indicated housing is on the mend. Builders broke ground on more homes than forecast in January, helped by warmer weather, and permits also advanced. The National Association of Home Builders/Wells Fargo index of builder confidence climbed in February to the highest level since May 2007. Beazer Homes USA Inc. reported that orders jumped 36% in the final three months of 2011 from a year earlier, and closings on new houses surged more than 60%. The Atlanta-based builder said it expects to sell more properties this year than last. “While our visibility into the economic conditions for the remainder of the year is limited, I believe that we will benefit from a gradually improving housing market,” Allan Merrill, CEO, said on an earnings call on Feb. 2. Policy makers are working to help distressed homeowners. The top five mortgage lenders this month reached a $25 billion settlement with 49 states and the U.S. government over the use of faulty paperwork in foreclosures. Fed Chairman Ben Bernanke said the central bank's efforts to spur growth are being blunted by impediments to mortgage lending, and called for more steps to heal the housing industry. “The economic recovery has been disappointing in part because U.S. housing markets remain out of balance,” Mr. Bernanke told homebuilders on Feb. 10 in Orlando, Fla. “We need to continue to develop and implement policies that will help the housing sector get back on its feet.” The foreclosure crisis is unlikely to subside any time soon. Owners of more than 14 million homes are in foreclosure, behind on their mortgages or owe more than their properties are worth, said RealtyTrac Inc., a property-data company in Irvine, Calif. |
© Neuss 2012 - Mandarina