Signs the commercial real estate capital markets are thawing continue to emerge. Bank of America, Citigroup, JPMorgan Chase and Goldman Sachs plan to pool loans for securitization; and foreign investors such as the Abu Dhabi Investment Authority are interested in U.S. commercial real estate.
There is a lot of uncertainty surrounding real estate mutual funds, which have followed the same trajectory as REITs in recent years. According to Morningstar, one plus for the space is that several large diversified funds -- which can invest in any sector -- have large holdings in real estate, which suggests the managers see value in the industry.
States and cities increasingly are selling off their real estate holdings to balance budgets -- or at least come close. They are finding it is a buyers' market. Governments usually sell their real estate when they are having a fiscal crisis, says Dan Fasulo, managing director of Real Capital Analytics. That usually means "they wind up getting lower prices when they do actually sell."
Developers Diversified Realty will not be returning to the CMBS market for additional financing despite its success last year in the capital markets. Instead, it has sold $304 million of common shares in the equity market. The company declined to elaborate.
Rugby Estates Investment Trust and ING UK Real Estate Income Trust are in negotiations with the goal of the ING unit to make an offer to Rugby. Nothing is settled yet. "At this stage, there is no certainty that any offer will be forthcoming, nor as to the terms on which any offer might be made," Rugby Estates Investment Trust said.