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Volume 2 - Number 3 | February 10, 2005
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TOP STORY: Interest Rate Risk Concerns REIT Watchers
By Erika Morphy
Last week the federal funds rate rose 25 basis points, an increase largely expected by market participants. But what if it had been 50 or even 75 basis points? Could the real estate market—in particular, REITs, which just delivered less than stellar earnings this January—have absorbed a steeper increase? Good news: A new academic study simulating the effect of specific unexpected macro economic shocks—interest rate or inflation increases, for example—on REIT performance has delivered a relatively positive outlook for the industry. The findings come as concern increases that REITs are too dependent on floating-rate debt.
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Ten Minutes With…Colony Capital’s Richard Saltzman
By Erika Morphy
For the past 14 years, Colony Capital LLC has stuck close to its original investment mandate: private equity, higher-return investing. But all that is about to change as the Atlanta-based opportunity fund explores new directions. “We are currently diversifying into areas where we think we can provide high value-add products that we would characterize as being different or complementary to what we have done in the opportunity space,” says Colony president Richard Saltzman.
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Behind The Deal: Maguire-CommonWealth Partners
By Benjamin Mark Cole
The Deal: Los Angeles-based public REIT Maguire Properties recently announced the $1.5 billion purchase of a 10-building, 5 million-sf office portfolio from CommonWealth Partners, a private real estate company also based in Los Angeles. Maguire’s plan? To establish a joint venture fund.
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CMBS Watch: More Big Brands To Follow JPMorgan's LDP
By Erika Morphy
Analysts and other Street watchers speculate that JP Morgan’s mid-January announcement that it will launch a new brand for large CMBS loans will not be the industry’s last. At least three or four other originators are considering similar moves, according to sources.
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