Wednesday tidbits
Why do I love technology? Because the weather could not be more perfect today here in Bourbonnais (in other words, an average day in San Diego or Santa Barbara). And, it is my wife's day off. SO, that means my emails and work calls will come in on the Blackberry while we run errands, go to the golf course and otherwise find ways to enjoy the glorious weather.
That being said, here are some quick thoughts for the day:
JLL's paying $613 million for Staubach in a down market with fears that tenant rep services will not be as in demand as in past years. I still think it is a good bet. Staubach is a primo brand in the industry. It is hard to put a tag on that price. Plus, the net present value of the deal is apparently only $317 million.
Recourse loans? We're going back to recourse loans? Good grief, that's scary. We all know about the Macklowe guaranty on his risky bridge loan, but I've been hearing about at least partial recourse quietly on some deals, especially new construction. That's gotta put fear or inertia in the heart of some developers. (I remember reading Donald Trump saying he'd never do a recourse loan again after his problems some years ago.) The alternative I would recommend for my developer clients is to bring in a money partner with enough equity to make the LTV on the deal small so recourse is not on the table. But such is the problem in this market, and by bringing in a money partner you lose much of your upside unless you negotiate a good promote and get good development and management fees.
Editorial: If anything's going to mess up this economy, energy prices will. So yes, let's drill for oil domestically and find alternative energy sources, especially for cars. (We already know nuclear is the solution for power but have to get off our butts and build plants.) Honda should license its nascent hydrogen fuel cell technology, and let's get the whole auto industry collaborating to improve and make the technology affordable. And not 15 years or 10 years from now. RIGHT NOW. Treat it like the war in terror because ultimately it is a big part of that.
OK, I'm done. Off to enjoy this day.
That being said, here are some quick thoughts for the day:
JLL's paying $613 million for Staubach in a down market with fears that tenant rep services will not be as in demand as in past years. I still think it is a good bet. Staubach is a primo brand in the industry. It is hard to put a tag on that price. Plus, the net present value of the deal is apparently only $317 million.
Recourse loans? We're going back to recourse loans? Good grief, that's scary. We all know about the Macklowe guaranty on his risky bridge loan, but I've been hearing about at least partial recourse quietly on some deals, especially new construction. That's gotta put fear or inertia in the heart of some developers. (I remember reading Donald Trump saying he'd never do a recourse loan again after his problems some years ago.) The alternative I would recommend for my developer clients is to bring in a money partner with enough equity to make the LTV on the deal small so recourse is not on the table. But such is the problem in this market, and by bringing in a money partner you lose much of your upside unless you negotiate a good promote and get good development and management fees.
Editorial: If anything's going to mess up this economy, energy prices will. So yes, let's drill for oil domestically and find alternative energy sources, especially for cars. (We already know nuclear is the solution for power but have to get off our butts and build plants.) Honda should license its nascent hydrogen fuel cell technology, and let's get the whole auto industry collaborating to improve and make the technology affordable. And not 15 years or 10 years from now. RIGHT NOW. Treat it like the war in terror because ultimately it is a big part of that.
OK, I'm done. Off to enjoy this day.
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