Commercial RE: Foreclosures, Vacancies, A Little Funding [Housing Tracker]

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Commercial Real Estate

MGM Mirage Gets Some Vegas Funding. “MGM Mirage (MGM) said it received a $1.8 billion credit facility from a group of banks for its massive CityCenter project of hotels, condos, retail stores and restaurants in Las Vegas… The complex needs another $1.2B in financing to round out the $3B needed to complete the project. Separately, MGM Mirage said it renegotiated terms of an existing $7B senior credit facility, raising the debt ratio to cash flow stipulated in its bank covenants to give the company more breathing room, and allowing MGM Mirage to borrow more in the future.” (WSJ, Oct. 7)

Palm Beach Commercial Condo Set For Foreclosure Sale. “A commercial condo inside a historic Palm Beach hotel is scheduled for foreclosure sale after losing a nearly $3.3 million judgment. Meecorp Capital Markets won the judgment in Palm Beach County court Sept. 4 against Palm Beach Resorts International LLC [and others.] The public auction of the 8,026-square-foot commercial unit inside the Palm Beach Hotel is scheduled for Oct. 16… The Palm Beach Hotel was built in 1926 and is managed as a condo-hotel. Palm Beach Resorts International purchased the commercial unit there in January 2007 for $2.8M. Meecorp granted it a $2.7M mortgage in August 2007.” (South Florida Business Journal, Oct. 6) 

Mall Vacancies Grow as Retailers Pack Up Shop.“NY real estate research firm Reis Inc.: Vacancy rates at U.S. malls and shopping centers continued their steep rise in Q3... Malls are seeing their highest vacancy rate since 2001. For shopping centers, the rate is the highest since 1994. In contrast, the apartment market remained one of the most healthy real-estate markets in Q3, benefiting from the struggling home-sales market. Many would-be buyers… are renting apartments instead. In the top 79 U.S. markets, apartments posted a slight increase in the vacancy rate to 6.1%, up from 6% from Q2, and a rise in rents of roughly half a percentage point.” (WSJ, Oct. 6) 

Office Space Is Emptying Out. “Reis: Nationwide, rents on office properties -- including landlord concessions and discounts -- were flat in Q3, the worst result for office-property owners since late 2004… The office market in suburban areas and smaller cities has been declining throughout the year. [Now] previously immune cities such as San Francisco [+0.6% to 9.9%] and Boston [+0.8% to 11.7%] saw vacancy-rate increases in Q3… Rents declined or were flat in 40. Nationwide… About 18 million-sf of space were emptied… The nation's office vacancy rate rose 0.5 percentage point to 13.6%, the biggest increase since the months following 9/11.” (WSJ, Oct. 3)

Oakland Condo Project Restarts As Rental Property. “Strategic Urban Development Alliance, developer of a halted Oakland condo project at 630 Thomas L. Berkley Way is restarting construction, but the complex will hit the market in December as rental units. Construction on 88 units ranging from one- to four-bedrooms and 10,000 square feet of retail space began in 2006, but was halted earlier this year when the contractor, UPA California, went bankrupt. The structure is part of a larger development that includes a 110,000-square-foot, four-story office building… finished in 2005.” (East Bay Business Times, Oct. 3)

                                                            

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