Mr. Gavin Campbell

GLG News^SM Analyses by Gavin Campbell

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Foreclosures Set to Add More Years of Supply to Downtown Miami Condo Market

July 22, 2009

Analysis of:Downtown Miami condos pass 60% occupancy | www.frej.net

The article describes a recent study that takes comfort in the fact that "62% of units in new downtown Miami condo buildings are occupied..., defying the perception that the majority of high rises built in recent years are empty." But this ignores the fact that there is still a 10 year supply of unsold inventory at today's absorption rates and pricing , and ignores the fact that foreclosures of previously sold units increased 500% last year in Miami Dade, which will only add to the glut.

Banks and Special Servicers Continue to Postpone the Inevitable

July 22, 2009

Analysis of:Pru Sees Debt as Best Investment Bet | www.globest.com

The article notes that distressed debt provides the best near term opportunities for r investors. And, in a perfect world, it should be; banks and conduits learned in the last downturn that they were not good at owning foreclosed properties, so their instincts this time are to just sell the paper. But, to do this they must mark it to market, and that, ironically, prevents many of them from selling it. But, they will face reality sooner rather than later, and the market will be better for it.

Value, Like Beauty, is in the Eye of the Lender

March 31, 2009

Analysis of:Soros Says Commercial Property Values Will Fall 30% | www.bloomberg.com

Commercial real estate values have dropped to a point where owners generally aren't sellers, so realized transaction pricing has not followed the value drop. But lenders will force transactions on overleveraged or defaulting assets in due course.  But, depending on the product type and geography, the pricing and value implications of this will vary dramatically.

Disconnect Between Public and Private Commercial Real Estate Markets

March 3, 2009

Analysis of:Commercial Property Activity Falls to 12-Year Low | www.cnbc.com

The slow down in commercial real estate transactions is a function of two things; the relative scarcity of acquisition financing and the large bid-ask spread between buyers and sellers. The recent drops in public REIT values are a harbinger of things to come in the private markets, and point to a more liquid market, dramatically reduced sales prices, and a higher volume of transactions towards the back half of this year.

Is Anybody Home?

January 7, 2009

Analysis of:As Vacant Office Space Grows, So Does Lenders’ Crisis | www.nytimes.com

The article correctly forecasts increases in vacancy and decreases in operating cash flow for office space across the country, and the resulting increases in loan defaults that will occur because of it.  But, the scenario is even worse than the current numbers show because of the large amount of sublease space that is not captured in the numbers. The essential question, however, is how lenders will react to this problem, or, in the case of CBMS, whether there is even somebody "home" to talk to. As active participants in the real estate equity and debt markets, we are encouraged by the creativity we are seeing from lenders in dealing with this problem.

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