U.S. CMBS Delinquency Rate Rise Again, REOs Reach $11B

New data from Fitch Ratings shows that the volume of real estate-owned (REO) assets for lenders reached $11 billion in April, a new market record, representing one third of all outstanding delinquencies according to Fitch Ratings. The current and prior month delinquency rates for each of the major property types are:

• Multifamily: 11.64% (12.61% in March)
• Hotel: 10.20% (10.35% in March)
• Industrial: 9.34% (10.91% in March)
• Office: 8.36% (7.99% in March)
• Retail: 7.39% (7.23% in March)

A closer look reveals stark differences in REO trends by state, according to a Costar Group report. In states where non-judicial (power-of-sale) foreclosure is allowed, the inventory of REO assets increased by 64% since the start of last year. Conversely, the inventory in judicial-only states (where the foreclosure process can be notably slower) jumped by 111%. For the current inventory of REO assets, it took an average 179 days to foreclose on properties in power-of-sale states, versus 323 days in judicial-only states. This suggests that the current REO inventory from judicial-only states represents older stock that is finally making its way through the system.

For more news and information visit Blumberg Capital Partners.

Google Buys Tallest Building in Dublin

Google purchased the Montevetro Building this week, the tallest building in the city of Dublin, for €99.9 million (roughly $136 million U.S. dollars) from Real Estate Opportunities (REO) and The National Asset Management Agency (Nama) according to a Wall Street Journal article. Google bought the 15 story, 210,000 square foot Montevetro development on Barrow Street to house about 2,000 staff members and accommodate new business activities that are currently in development. Real Estate Opportunities redeveloped the building, and its chairman, Ray Horney, said the sale is one of the largest commercial real estate deals Ireland has ever seen reported the San Francisco Chronicle. Nama, which acquired the Montevetro building as security for a loan that transferred from a participating institution in April 2010, advance the necessary working capital to complete the development.

"We are at capacity in our EMEA headquarters in Barrow Street and the additional space will allow us to relocate some teams to Montevetro and to create an even more spacious working environment for Googlers in our existing building," said John Herlihy, head of Google in Ireland.

Nama chairman Frank Daly comment that "the successful completion of the Montevetro development and its sale again reflects the positive potential of Nama to support the commercial property market in Ireland without compromising its objective of recovering monies owed to the taxpayer."

For more news and information visit Blumberg Capital Partners.