Bond investors doubt the Federal Reserve will clearly indicate during its policy meeting today that it plans to increase interest rates in September for fear it may hurt the economy. "In my opinion it is too soon to signal a hike," said Jim Caron of Morgan Stanley Investment Management.
The Federal Reserve and Federal Deposit Insurance Corp. have requested more information from American International Group, Prudential Financial and General Electric's GE Capital to address funding and liquidity. The regulators want the resolution plans submitted by Dec. 31.
Cerberus, Lone Star and Blackstone are buying up distressed commercial and residential debt from Europe's banks.
Cerberus has bought about 20 European portfolios of nonperforming loans since the start of 2013 as the largest acquirer, according to Cushman & Wakefield, paying a fraction of the face value.
Shanghai-based Global Logistics Properties is acquiring a 100-property, 58-million-square-foot portfolio from Industrial Income Trust for $4.55 billion. The deal is structured as 100 separate transactions, with the properties located in 20 major U.S. markets, and should close by mid-November.
Companies such as Home Partners of America and HomeLPC are bringing back the rent-to-own business, targeting homeowners whose credit history doesn't meet new mortgage-lending standards. Home Partners of America secured $500 million from BlackRock's alternative investments arm last year.
The percentage of homeowners has dropped to a 48-year low of 63.4%. Meanwhile, about 1.6 million new households have formed in the last year, and most are renters. Demand is pushing rents up faster than incomes are rising, making the cost of apartment living unaffordable for many.
Taubman Centers' new Mall at University Town Center near Sarasota, Fla., appears poised for success, thanks to the rising stock market, increasing tourism and the nearby construction of high-end apartments. Chief Operating Officer William Taubman said the company saw a hole in the market for an upscale mall that targets customers earning $100,000 or more per year.
AvalonBay Communities, which has a strong footprint in Silicon Valley, reports that average rents in Northern California are up 10% year over year. The region has the largest increase in AvalonBay's portfolio.
Tight supply and high demand for apartments are pushing rents upward. Developers, meanwhile, are busy with plans for new supply, and investors should pay attention to those companies, writes Justin Lahart. "If supply is what prices say the market craves, somebody has to build it," he writes.
Bluerock Residential Growth REIT has acquired or committed to buy $400 million in assets this year in markets that have above-average job growth, said CEO Ramin Kamfar. The REIT has a strong development pipeline, which could grow as large as $1 billion, he said. "In our markets, we find that there's tremendous value creation in terms of development," he said.