Review: A human face for the foreclosure fiasco 25 Sep 2015 Seven years on and the financial crisis blame game is still alive and well. In his new film, “99 Homes,” Ramin Bahrani crafts a dramatic narrative that does the best job yet of capturing the complexity of assigning accountability to the collective U.S. housing delusion.
Chicago’s lack of crisis makes fiscal rehab harder 21 Sep 2015 Mayor Rahm Emanuel wants a big property tax hike to shore up underfunded pensions. It’s an important move to get the city out of a $40 bln hole. Perversely, without lenders freaking out, as happened to New York in the 1970s and Detroit more recently, the job is actually harder.
American Dream wakes amid home rental deal signs 21 Sep 2015 The merger of Starwood Waypoint and Colony American to create a company with $8 bln of homes suggests U.S. rentals will keep thriving. Cost savings will add financial strength as youngsters take baby steps into the housing market. Ownership prospects are on the rise, too, though.
India tycoons defy deflating property bubble 16 Sep 2015 Mogul Cyrus Poonawalla’s $113 mln purchase of a Mumbai mansion is a new Indian house price record. But his zeal isn’t matched by the wider market, where a correction is underway. Sales to middle-income Mumbaikars are slowing, prices stagnating, and developers are burning cash.
Moving millennials may unpack $600 bln punch 9 Sep 2015 Despite better job prospects, many young Americans are living longer with their parents. That curbs spending on housing, as well as on internet service, refrigerators and such. A Breakingviews analysis suggests millennials exiting attics could add 4 pct to GDP within a few years.
Blackstone hotel deal may include early checkout 8 Sep 2015 The buyout firm is paying $6 bln for Strategic Hotels, owner of Four Seasons and Ritz-Carlton properties. The 13 pct premium seems measly given the appetite of foreign buyers for luxury lodging. Maybe Blackstone’s rewarding commercial real estate breakup of 2007 would work again.
French housing weakness builds up trouble 17 Aug 2015 Gallic households are hardy consumers but poor investors. Reluctance to buy new housing – which counts as investment, unlike purchases of old homes – is offsetting a recovery in business spending. With demographics partly to blame, such weakness will continue to hold back growth.
Trump and China give opposing lessons in failure 7 Aug 2015 Presidential hopeful Donald Trump says bankruptcy in America is no reason to be embarrassed. In debt-laden China it’s different: the state throws money at avoiding failure. Both positions end in the same place. If going bust brings too much pain or too little, disaster follows.
London scrubs vainly at dirty money inflows 28 Jul 2015 Laundered cash hidden in UK property is an unwanted compliment to Britain’s open borders, stable politics and tolerance of anonymity. Privacy may be compromised if things are to be cleaned up. Full transparency, though, is neither in Britain’s gift nor lawmakers’ interest.
Spain picks smart route out of housing mess 10 Jul 2015 Madrid and Barcelona’s new left-wing mayors might have taken a more draconian approach to blocking evictions. Instead of interventionism, they have opted for improving support for those on the receiving end. With luck, Spanish bad debt investors won’t be the only beneficiaries.
Brookfield can sail off with Asciano 2 Jul 2015 The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.
WeWork stretches sharing-economy valuations 26 Jun 2015 The groovy provider of office space - and beer - to millennial workers is now worth $10 bln after its latest funding round, doubling in just six months. WeWork is growing fast, but based on established rivals’ metrics earnings would need to jump 15-fold to justify that price tag.
U.S. justices leave door ajar to risky home loans 25 Jun 2015 The Supreme Court confirmed that even neutral housing policies can be illegal if they have a prejudicial effect. That keeps banks and other mortgage providers vulnerable to claims of unintentional bias. More bad lending practices, not less discrimination, could be the result.
Uncle Sam wastes home-loan crisis 23 Jun 2015 Tackling expensive rent is a better policy goal than pushing mortgages – and would arguably create more jobs. Instead, Washington has stoked growth in home loans with low down payments and less creditworthy borrowers provided by shadow banks. That’s counterproductive.
U.S. homebuilders pour $5 bln slab of common sense 16 Jun 2015 Standard Pacific and Ryland have unveiled a purported merger of equals that actually approximates one. Investors even pushed both stocks up over 5 pct on Monday. The new group needs help from housing markets – but if it’s approved, the deal looks like a solid foundation.
REIT gambit gives Sears $2.6 bln more to burn 12 Jun 2015 The flailing U.S. retailer wants shareholders to exercise rights to capitalize a real estate unit which will buy 235 stores. The REIT may be a decent bet, and the proceeds will buy Sears boss Eddie Lampert time. The danger is that the hollowed-out merchant will waste the cash.
One of America’s best-run banks curiously kowtows 11 Jun 2015 U.S. Bancorp, the nation’s fifth-largest lender, is cranking up in big mortgages. CEO Richard Davis admits it’s merely to please shareholders hungry for loan growth, even if it’ll fall short of the bank’s 15 pct return of equity. Though small, such pandering can presage a crisis.
Sacyr sale shows Spanish property market split 10 Jun 2015 The 1.8 bln euros paid for the builder’s commercial property unit is at a hefty premium to net asset value. Investors are piling into funds focussed on offices or hotels. The residential market is a different story. The worst is over but it’s likely to bump along the bottom.
China’s latest developer rescue plumbs new depths 10 Jun 2015 Renhe’s model of turning bomb shelters into malls has run aground. Now it is buying farmers’ markets for $839 mln, to bring in enough cash to keep the lights on. The catch: it’s buying at a premium from the chairman’s wife. Shareholders might hate it, if they had an alternative.
Amazingly, Irish homebuilder float looks a hit 9 Jun 2015 Ireland may be the real estate basket case of Europe, but a Dublin-based housebuilder is planning a London float. With most of its competitors bankrupt, strong demographics driving demand and prices in the Irish capital up 22 pct last year, Cairn Homes could be on to a winner.