Blog because you like it

Just some personal thoughts posted elsewhere...Blog because you like it or consider it a good exercise in keeping current. Consider the additional writing, speaking and clients (or declined business) a fringe benefit. Thanks to the Law Blog for pointing this out.

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Why real estate in San Diego is so expensive

This is one reason . Good old vernal pools, those puddles that emerge in the spring and bring life to rare species of plants, and yes, even shrimp. I think an average house in America's Finest City is over $700K these days. Granted, there are other reasons for expensive housing, but CEQA is one reason for sure.
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TALF and Ratings - Get Out Your Cash!

Here's the latest gloom and doom piece -- perhaps warranted, too -- this time in the Journal . The point? It is great that the government finally got on the darn bandwagon by including CMBS and commercial properties in TALF, but that's just not enough. Now, if we are going to have all this bailout money in the first place (we will not get into the philosophical or practical arguments of how to repay all this debt) including the commercial sector is important in my opinion. But, as the story points out, only top-rated debt is eligible. And S&P is telling us that it may downgrade a boatload of properties, thus rendering them ineligible for TALF money. A lot of people blame the ratings agencies for getting us into this mess in the first place by rating deals AAA that had no business being so. And now when they want to clean up the mess by downgrading these deals, it could create another, even larger, problem. Jeez. The moral? Owners are going to either have to pony up ...
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Interesting trend - don't buy the dirt, buy the developer

Private Equity Real Estate has a good article (free sub. required) about a trend among private equity players: instead of buying up property or finished buildings or even developments, they are buying all or chunks of development or doing equity participation deals with them. I've seen the latter trend forever, of course. And it is a wise move on their part to do so. Take the undercapitalized developer, bring in a money source with cash to place, give the money partner a preferred return and the developer a nice promote and you have a total win-win situation. Buying the developer itself is an interesting twist. The upside is guaranteed stability. The downside? Are you expected to work exclusively on the owner's deals? What happens to the promotes -- are they there in the form of high bonuses or gone? The flexibility may not be there. But I still find the idea intriguing.
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