Company News

June 14, 2013: Boston Realty Advisors retained to sell 171 Newbury Street; Download PDF

June 5, 2013: Sale of Newbury St. Icon Could Top $1,600 Per SF, featured in the Real Reporter; Download PDF

June 5, 2013: Route 9 Gulf station eyed for development, featured in the Brookline Tab; Download PDF

May 3, 2013: Boston Realty Advisors to market the Staples site in the New Hampshire, featured in the Real Reporter; Download PDF

May 1, 2013: Sanford Buys Prime 27,000-SF Retail Site; BRA Brokers Deal Funded by Belmont Savings, featured in the Real Reporter; Download PDF

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Archive for the 'CMBS' category

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31 Milk Street "Goes Back to Lender"

Today at about 11:40AM, 31 Milk Street was taken back by the lender by means of a credit bid of $8.2M. The par value of the note according to public records was over $16M.

http://www.bankerandtradesman.com/news137510.html

Posted at 03/23/2010 06:37 PM by Jason S. Weissman

Categories: Boston Real Estate, REO, OREO, CMBS, Subprime Mortgage

Jason Weissman Speaks At Harvard Business School

In recent company news, founder and principal of Boston Realty Advisors, Jason S. Weissman, served as a panelist at the annual 2010 Harvard Business School Real Estate Symposium Panel on Saturday. The annual Symposium was formed in 2007 in order to bring students together with the leading professionals within the real estate industry. The conference represents a rare opportunity to hear from and meet some of the most influential real estate executives in the United States. The professionals in attendance represent the full spectrum of property related companies, encompassing development to investment banking, property services, and acquisitions. You can see a list of the panelists with bios, here.

Posted at 03/01/2010 06:17 PM

Categories: Boston Real Estate, Commercial Real Estate, Lending, Real Estate Investment, CMBS

Weekly Thoughts by Jason S. Weissman for the Week of February 22, 2010

Jason S. Weissman

Founder and Principal

Boston Realty Advisors

February is almost over and 2010 seems to be starting off very well. Over the last couple of weeks it seems that we have only discussed the “distressed” component of the real estate business. I have a couple of thoughts on some relevant distressed stories, but I’ll also identify some bright spots in the industry later in this post. But for now:

More Distress, and a show of the times..

In Nantucket this week, TD Bank North held a foreclosure auction for the Point Breeze. They repurchased the asset, via a credit bid of $22M. The existing debt for the development was $40M. See the story in the Nantucket Mirror. http://www.ack.net/pointbreeze022510.html

Last Friday, the New York post reported that One Madison Park is headed for foreclosure.
Click here for article

I identify these two totally unrelated assets, as each is quite high profile in their own right. A trophy Nantucket Island site, and a premier luxury condo project on Madison Park in NY. We will see many core assets in Triple A locations continuing to be foreclosed upon and pricing will continue to recalibrate. This leads me to my next points. The pricing recalibration process is very uncomfortable and painful for owners/borrowers and their respective property lenders. However, once the recalibration process occurs, whether through a foreclosure sale or otherwise (the lender selling the note, etc.) the market can begin to ‘work’ on the asset. In the case of Nantucket, TD Bank North will write down the $22M credit bid ($18M loss) and potentially look for a developer to either purchase all cash or provide new debt on the asset to a better capitalized developer in hopes that this process will bring the asset back to market and get the ‘work’ started.

The ‘work’ affect on the macro market is the following: builders begin to work again, vendors such as brokers, architects, attorney’s, interior designers, etc., can ‘work’ on the sale of the assets to end users. This will allow end users will be able to purchase the assets at the ‘market value.’ My scenario above would be an ideal situation, but unfortunately the process mentioned above is simply taking time, “a cog in the wheel,” as they say. But, we do see solid examples of recalibrated pricing, making the market move again, and getting the industry “working again.”

The Brighter Side:

Bayside Expo Center is "under contract" to UMASS Boston

You may remember that the Bayside Expo Center was lost to foreclosure last spring by Corcoran Jennison Company. The loan was $22M, and LNR repurchased it back by means of a credit bid for $11M. The site is now under contract for $18.7M or 85% of the loan value.

Click here for full story

John F. Kennedy Presidential Library and Museum

We think this is a spectacular site. Given the macroeconomic environment, UMASS is the best buyer. For the City of Boston, it is a shame that this site cannot be redeveloped into a more neighborhood inclusive use, such as housing, public space and neighborhood retail. The waterfront views and proximity to the Harbor Walk and the JFK Library (where I run daily) all make this an incredible place, and I’m not sure that many Bostonian’s know how great it is. Take a look at the JFK Library Website and definitely take a visit --- http://www.jfklibrary.org/ I have said to many people before, Boston could really be a world class, waterfront city---like a Sydney Australia, if our Waterfronts were developed properly. But this is just a thought and a dream for now. For today, it’s a good thing that this asset is trading at 85% of the loan balance. Maybe UMASS Boston will add public spaces (parks and/or museum) and a commercial component to their redevelopment of the site.

View of the Waterfront and the Financial District from the Boston Harborwalk

Story from the WSJ – Commercial Sales Jump

This story references in the national press the sale of the One Brigham Circle Development to AEW, for a 6.5% cap rate!

Click here for full story

We are definitely seeing a pent up demand for high quality, low risk investment grade product. Watch for some strong sub 7% cap rate retail deals in the Boston Market over the next four to six months.

Posted at 02/25/2010 09:53 AM by Jason S. Weissman

Categories: Boston Real Estate, Commercial Real Estate, Lending, Boston Commercial Real Estate, Distressed Debt, CMBS

Weekly Thoughts by Jason S. Weissman for February 15th, 2010

“Residential CDO’s Still Are a Problem, a Big One---and Note to Self, Caveat Emptor, Always”

In this week’s Economist, in the special report, on “Financial Risk”, they featured the diagram below.

www.economist.com/specialreports/displayStory.cfm

Simply put, there is no need to explain it. Is this unbelievable? Not to state the obvious, but how can professionals at the bond rating agencies have such variance in their risk underwriting? The A+ Paper issuance category had an estimated default rate of .06% default rate over a three year period. The actual default rate was 20.96%! That’s a variance rate between predicted an actual of performance of 34,833%. How can someone be off by an error of 34,833%? Especially, an expert, who focuses daily on underwriting and analyzing risk!

Rating	Estimated Three Year Default Rate	Actual Default Rate	% Variance between Estimate and Actual
AAA	0.001	0.1	9900%
AA+	0.01	1.68	16700%
AA	0.04	8.16	20300%
AA-	0.05	12.03	23960%
A+	0.06	20.96	34833%
A	0.09	29.21	32356%
A-	0.12	36.55	30358%
BBB+	0.34	48.73	14232%
BBB	0.49	56.1	11349%
BBB-	0.88	66.67	7476%

Source: Variance calculation by Boston Realty Advisors

So when investing in real estate or notes securitized by real estate (or for any investment vehicle for that matter ), you need to rely on “practical” gut feel knowledge. Simply put , when hundreds of thousands of home buyers were putting zero equity into their home purchases without reserve or “skin” in the game, there was an obvious practical problem. This was definitely a case of “group think” on the part of the rating agencies. This topic has circulated the media world and our industry for about four years now. I am writing about in today’s Weekly Report simply based on the extent of how bad this problem was. Even in 2009, no one would of predicted that close to 70% of all BBB- paper would be in default.

So on Caveat emptor: don’t trust the experts, avoid group think. If something doesn’t feel right, it isn’t right. That's how market bubbles are created; market fundamentals that just don't match up with 'everybody's doing it' mentality. So, bottom line: trust your judgment and “Let the Buyer Beware!”

My Prediction: The real estate markets are functioning quite rationally, now. The micro-trend that I am now following that just doesn't make sense, is the following: Why/how the FHA is still lending between 95-97% on residential properties…I wish I had some other macro market "bubble" to predict, but this is the only one I can spot, for now.

I am the Founder and Principal of Boston Realty Advisors. Please check in weekly to review my blog entries. I value client/reader feedback!

Posted at 02/16/2010 09:08 AM by Jason S. Weissman

Categories: Investment, CMBS, Subprime Mortgage, CDO, Lending