Situs Newswatch 11/2

Situs Acquires Hatfield Philips; Becomes Europe’s Leading Loan Servicer

Situs, the premier global provider of strategic business solutions for the finance and commercial real estate industries has acquired Hatfield Philips International (“HPI”), the leading non-performing loan (“NPL”) and commercial mortgage backed securities (“CMBS”) special servicer in Europe.

By acquiring HPI from Starwood Property Trust, Inc. (NYSE: STWD), Situs now becomes the market-leading independent loan servicing firm in Europe with over €145 Billion ($160 Billion) combined assets under management globally.

“The European market is a dynamic and exciting place for debt servicers currently as banks continue to deleverage their balance sheets amidst regulatory pressure, and new market entrants rush to deploy equity and debt products into Europe,” said Steve Powel, CEO of Situs. “The acquisition of HPI is another milestone in our ongoing European expansion, and expands our professional capabilities in the performing and non-performing debt space now across sixteen European jurisdictions.”

“Joining Situs allows us to be a part of something special,” said Blair Lewis, CEO of HPI. “HPI brings a premier platform of seasoned real estate underwriters and workout specialists to Situs’ market leading offerings. It is exciting to think about our new opportunities, as a combined platform.”

Bloomberg reports about €21.6 Billion ($24.5 Billion) of European commercial real estate loans were sold in the first half of 2016, compared with about €34.9 Billion for the whole of 2015, according to data compiled by Deloitte LLP. Sales in the region may reach €80 Billion in 2016 as Italian loan disposals increase, broker Cushman & Wakefield Inc. said in April.

“We’re proud to welcome the HPI team to the Situs group,” said Situs CEO Steve Powel. “And as we have with previous acquisitions, we plan to carefully and thoughtfully join them with our existing operations.

Powel adds, “Clients will continue to receive the same level of excellence they have come to expect, and with the increased number of team members and expanded reach, we will be able to offer greater flexibility and an expanded suite of solutions to support the full life cycle of the asset.  We will continue to provide the accurate insight, increased efficiencies, and operational excellence that our clients expect to drive profitability and manage investment risks.”

Click here to view the full press release.

U.K. Banks May Gain $14.6 Billion Yearly Leaving EU

The U.K.’s biggest banks and financial firms could gain an additional 12 billion pounds ($14.6 billion) a year in revenue from Britain leaving the European Union, according to a report from a pro-Brexit lobby group.

Leaving the 28-nation trading bloc and ending membership in the EU single market for trade and services would help Britain cut “stifling Brussels red tape” to help U.K.-based financial firms grow sales, the Leave Means Leave campaign said in the report published on Sunday. London will also avoid a banking crisis and a fight for the survival of the euro area, according to the group.

The report comes in stark contrast to warnings from numerous global financiers arguing the City of London will be damaged by Britain leaving the EU, putting at risk tens of thousands of jobs and billions of pounds in revenue and taxes. Barclays Plc Chief Executive Officer Jes Staley said Friday he’s looking at “incremental steps” to relocate operations elsewhere in the trading bloc to offset the impact from Brexit.

read more: Bloomberg

U.K. Mortgage Approvals Rise to Three-Month High

U.K. mortgage approvals rose in September to a three-month high, the Bank of England said.

Almost 63,000 loans for house purchase were granted, up from a revised 60,984 in August, it said in a report in London on Monday. Economists in a Bloomberg survey had forecast a figure of 61,500.

The report also showed that consumer credit rose 1.4 billion pounds in September after a 1.6 billion-pound increase the previous month.

The BOE figures suggest that household demand for credit is holding up since the Brexit vote in June. With the economy performing better than expected in recent months, the central bank is forecast to refrain from cutting interest rates this week.

Business lending rose 1 billion pounds in September, above the average for the previous six months, according to the BOE. Annual loan growth was 3 percent.
Mortgage lending increased 3.2 billion pounds last month, the most since June.

Demand for housing is partly being driven by low borrowing costs. The effective interest rate on new mortgages fell 4 basis points to 2.27 percent in September, the lowest since the series began in 2004.

read more: Bloomberg

Brexit: How About a Cheap Rolex

The effect on the value of the pound of Britain’s vote to leave the European Union has rarely been out of the headlines since the June 23 referendum. But while the markets panicked — an estimated $2 trillion was wiped off world markets the day after the vote — the decline of the currency has proved a boon for Britain’s luxury watch retailers.

With watches priced in pounds — particularly those at the high end — suddenly much more attractive to the international market, customers from all over the world have been buying in Britain.

London has felt the biggest “Brexit” boom. According to the global market research company GfK, sales of watches priced at more than 10,000 pounds, or $10,980, were up 67 percent in the British capital in September, compared with the same period last year. And the figure was almost as high outside London, up 56 percent.

The Federation of the Swiss Watch Industry reported that exports to Britain were up 32.4 percent year over year in September, making the country the world’s fourth-largest importer of Swiss watches. In 2015, it was eighth.

“Brexit has been hugely beneficial,” said Brian Duffy, chief executive of Aurum Group, which he said accounts for 46 percent of all British watch sales through its network of Watches of Switzerland, Mappin & Webb and Goldsmiths stores. “There are undoubtedly more tourists, and they’re looking to spend, because they’re confident in the value they’re getting. Luxury watch sales across the group are up by 40 percent, end of June to Week 1 of October.”

David Coleridge, chairman of The Watch Gallery, which operates showrooms in Selfridges on Oxford Street and in Manchester, as well as a Rolex boutique in the ultra-luxury apartment building One Hyde Park in Knightsbridge, said Brexit had created “the perfect storm.”

read more: NY Times

Italy’s Economy Getting the Boot

Italy’s blue-chip stock index has lost more than half its value since 2008. Industrial production is sinking rapidly.

Only the level of debt and youth unemployment in the country are rising. The third-largest economy in the euro currency zone stands on the precipice. While Greece makes up only 3 percent of the euro zone’s total debt, Italy makes up 23 percent.

Matteo Renzi could hardly contain himself. For the second time just over a week, he was sharing the spotlight with German Chancellor Angela Merkel at a German-Italian summit in Maranello. Again, Ms. Merkel was offering her support for the Italian prime minister – just as French President Francois Hollande had also done recently.
“The reforms are brave,” Ms. Merkel said, reassuring the audience that it would take longer than just a few weeks for the results to become apparent.

The praise was music to Mr. Renzi’s ears, coming as it did from the unspoken leader of Europe.

But then, Ms. Merkel went on to address the “flexibility” with which Italy has been whitewashing its budget figures. Ever since the outbreak of the euro crisis, the chancellor has had little patience for fiscal trickery.

Whenever Ms. Merkel and Mr. Renzi meet, sooner or later the conversation lands on Italy’s lackluster financial situation. And when it does, the smile melts off Mr. Renzi face. The Italian premier, a master of self-dramatization who signs his weekly “e-news” newsletters with the salutation, “A smile, Matteo,” has very thin skin when it comes to criticism.

read more: Handelsblatt

 

U.S. Industrial CRE Looking Good

The Ten-X U.S. Industrial Market Outlook concludes — long-term the sector will  continue to enjoy healthy expansion, thanks to the continued rise of distribution centers tied to the growth of e-commerce and the increasing use of warehouses as cloud computing facilities.

Ten-X Research’s data suggests that Nashville, Tenn., Los Angeles, Calif., Memphis, Tenn., Atlanta, Ga. and San Bernardino-Riverside, Calif. are markets in which investors should consider buying industrial assets. While overall economic conditions in these areas differ, each finds itself in a unique position to capitalize on the mounting demand in the sector, citing strong absorption rates that promise to outpace supply over the next two years.

Other markets, particularly those that rely heavily on energy industries, are struggling amid the lasting slump in oil prices, which has contributed to an economic malaise affecting nearly all real estate sectors. Four Texas cities – Houston, Dallas, Fort Worth and San Antonio – are among the metro areas where Ten-X believes industrial investors might consider selling their properties. Suburban Maryland, a region in which the economy has proven sluggish due mostly to low population growth and a floundering professional and business services industry, also made the ‘Sell’ list.

“The industrial sector is benefiting from the same shifts that are afflicting its retail counterpart. As more and more people choose to stay home to do their shopping, companies need more space to house and distribute the products they sell online,” said Ten-X Chief Economist Peter Muoio. “While other economic factors are hurting energy-dependent and port-exposed markets, this change in consumer behavior appears built to last, and puts industrial owners in a favorable position for the years to come.”

A majority of indicators show the sector should continue to blossom, as Ten-X Research predicts rents should increase by approximately 3 percent over the next two years. Vacancies, meanwhile, are likely to fall as low as the mid-7 percent range in 2018, which would be their lowest since 1990.

Investors should remain cautious, however, as the sector will remain vulnerable to a cyclical downturn on the horizon. Research shows vacancies are poised to rise to around 9 percent by 2020, while rents are projected to see a decline of about 1 percent per year beginning in 2019.

 

NYC Property Company Selling off Six Buildings, Asking $125M

Debrah Lee Charatan’s BCB Property Management is in the process of selling off much of its real estate holdings. The latest batch to hit the market is a six-building portfolio with a price tag of $125 million, or $930 per square foot, the firm told The Real Deal.

The package contains five rental buildings on the Upper West Side and one in Morningside Heights, all in close proximity to Columbia University. Together, the buildings hold 152 rental units and five retail spaces, and span nearly 135,000 square feet.

A Cushman & Wakefield team led by Robert Shapiro and Hall Oster is marketing the portfolio for sale – either as four separate packages or as one big one. If sold separately, the individual asking prices are: $48 million for three contiguous buildings at 3143-3149 Broadway; $36 million for 500 Cathedral Parkway; $29 million for 111 West 104th Street; and $12 million for 242 West 109th Street, the brokers said.

read more: TheRealDeal

 

As Manhattan’s Luxury Market Cools, Hamptons Soar
Following a slowdown that has affected the local market for more than a year, Hamptons luxury properties saw a jump in prices and sales volume in the third quarter.

The quarter’s median sales price for Hamptons luxury properties – which is the top 10 percent of the market – was $6.2 million, a 17 percent rise year-over-year. According to Douglas Elliman’s latest market report, sales over $5 million increased 29 percent year-over-year and sales below $1 million rose 22 percent year-over-year. Across the entire Hamptons market, sales increased 2 percent compared to this time last year, the first rise in five consecutive quarters. However, Jonathan Miller, CEO of appraisal firm Miller Samuel, told The Real Deal that sales between $1 million and $5 million – which Miller says has previously been considered a ‘sweet spot’ – fell by 24 percent.

 

 

You’re Kidding, Christmas Decorations and Music, Already?

It was just Halloween – but some radio stations have already skipped ahead to playing only Christmas music.

It used to be national news when some itchy radio station went all-Christmas before Halloween. But with some malls already decorating for Christmas, it doesn’t seem all that early, any more – unless you can’t tolerate 24-hour Christmas ditties. Many listeners find it irritating, but it’s an attention-getter. Sometimes it’s also a prelude to a December 26 change in permanent format. Those are the only ones that Radio Insight says it’s going to track this year. Lance Venta reasons that it’s become “very predictable when most stations will flip to Christmas music.” Of the unpredictable extra-early adopters, there’s a new sign-on in Branson, Missouri (1120/98.1, back on October 1). In Astoria, Oregon (Radio Beam’s KEUB at 93.3), And San Angelo, on Bill McCutcheon’s “Frosty 103.5” KBJX. As for the usual suspects, the site catches an all-holiday playlist in Birmingham on SummitMedia’s easy oldies “Easy 102.1” WENN/1320 and its translator. (Last year, WENN committed to all-Christmas far earlier, on September 25.) In Tallahassee, there’s iHeart’s AC “105.3 My FM” WTLY/1270 and its translator. And in Chattanooga, iHeart’s classic country “96.1 the Legend,” an HD-fed translator. No doubt there are more.

read more: InsideRadio