Libertarians hold that the fundamental reason for the existence of governments is to protect life, liberty, and property. These are the principles articulated by John Locke in the 17th Century, the principal architect of liberal thought who deeply influenced our own Declaration of Independence.
Within a democratic realm, citizens are expected to rely on our domestic institutions for the protection of these rights. For instance, an independent judiciary is essential for the resolution of property claims and other matters. But what is a citizen to do when his property rights are violated by a foreign totalitarian regime where no recourse to the rule of law is available?
It would seem that, when a U.S. citizen’s property is expropriated by a foreign country, the property rights principle, so dear to libertarians, would take center stage. And yet, paradoxically, libertarian thinkers often argue against economic sanctions with nary a word about property rights.
They argue that unilateral economic sanctions do not work, and that individuals should be free to invest as they choose and undertake the risk of their investments. Agreed, but that leaves open the question as to how a government should protect its citizens’ property rights when a foreign government capriciously and arbitrarily changes the rules of the game.
U.S. economic sanctions against Cuba are a case in point. The sanctions were first authorized in 1961 when President John F. Kennedy issued an executive order in response to the Cuban government’s expropriation without compensation of American assets, an issue that remains unresolved.
It is valid to state that the sanctions have failed to change the course or nature of the Cuban government, but the failure argument is peculiarly offered in a form of isolated reverse logic. It is also valid and necessary to point out that the alternative policy pursued by the international community of engaging with the Cuban government has also failed to change the nature of that regime.
Currently over 190 nations engage economically and politically with Cuba while the United States remains alone in enforcing its economic sanctions policy. If indeed U.S. policy is deemed as one case of failure to change the nature of the Cuban government, there are 190 cases of failure on the same grounds. By a preponderance of evidence (190 to 1) the case can be made that engagement with that regime has been a dismal failure.
Fifty years ago President Kennedy sent a reasonable message to the international community that governments that choose to expropriate the properties of U. S. citizens need to compensate them. Governments that choose to simply steal the properties of U. S. citizens should expect some form of retaliation from the U.S. government.
That message remains valid today as an expression of a government’s duty to protect the property rights of its citizenry in foreign countries where the rule of law does not prevail. It is one thing to argue, as those of us that value personal freedoms do, that investors should be free to invest and accept all the risks of their decisions when the rules of the game are known in advance and where the rule of law prevails. It is a different situation when the rules are changed after the fact, as the Cuban government did, and where no legal recourse is available.
Investors in communist countries cannot expect their government’s protection; they know in advance what they are getting into. The maxim “investors beware” is fully in place. Karl Marx makes clear in The Communist Manifesto that “the theory of the Communists may be summed up in the single sentence: Abolition of private property.”
Independently of their usefulness, the use of economic sanctions as a foreign policy tool is neither new nor particularly American. Pericles’ decree banning the Megarians from the Athenian market and ports helped incite the Peloponnesian War in 431 B. C.
Unintended and undesirable consequences are inherent in the use of economic sanctions. Arguably they should not be used to compel a democratic transformation or even to advance human rights or other laudable goals. They seem, however, an appropriate in-kind response to the economic aggression of another country, such as expropriations without compensation.
What are the policy alternatives to protect the property rights of a citizenry when negotiations fail?
José Azel is a senior scholar at the Institute for Cuban and Cuban-American Studies, University of Miami and the author of the book, Mañana in Cuba.
Tags: news
Starwood to rebrand Citigate Perth under Four Points.
Sunday, 20th May 2012
Source : HVS International
Starwood Hotels and Resorts Worldwide has announced the signing of an operating agreement for a conversion of Citigate Perth into Four Points by Sheraton Perth.
The agreement was signed between Starwood, an affiliate of GIC Real Estate Pte Ltd, the real estate investment arm of the Government of Singapore Investment Corporation (GIC), and Host Hotels and Resorts. Under the management of Starwood Hotels and Resorts, the hotel will undergo an improvement programme and is slated to open on 1 June 2012.
This marks Starwood’s return to Perth after exiting the market 18 months ago when their management contract at Perth’s Sheraton Hotel expired and it was renamed Pan Pacific Perth.
The property was purchased by the joint venture of GIC Real Estate and Host Hotels and Resorts for US$61 million.
www.hvs.com
Tags: news
Real Estate Investment Scam Discovered: SEC Charges NJ Man
Posted on 19 May 2012. Tags: investing scam, New Jersey, real estate investing
An alleged Real Estate Investment scam was discovered by the SEC and have since charged David Connolly of Watchung, New Jersey. The SEC alleges that Mr. Connolly operated a phony scheme that duped clients into more than $2 million of real estate investment shares. Mr. Connolly operated Connolly Properties Inc. which was suppose to supply real estate investors monthly dividends from cash-flow profits from shares purchased. The profits were would come from rental income from apartment buildings as well as property appreciation growth profit.
Connolly Properties did initially hold real estate investments in both Pennsylvania and New Jersey. However, after quickly figuring out that these real estate investment properties would not produce the promised dividends to investors he chose to make Ponzi-like payments to his early investors by using money from his new investors. During that time the SEC alleges Mr. Connolly took at least $2 million in his investor funds and used them for his own personal use.
What probably caught the SEC’s eye and really brought the heat on Mr. Connolly was the fact that the security offerings in the real estate investment vehicles were never registered with the Securities and Exchange Commission. Registering these real estate investments is required by federal law.
Connolly Properties originally began offering real estate investment in 1996, having raised over $50 million in 200 plus investors. The SEC claims that Mr. Connolly told investors that all of their investments would be used only for properties related to the real estate investment vehicle chosen by the investor. However, it became a mess when the funds were also mixed with other funds from various other investments including payments to made out to himself. To continue the scheme real estate refinancing was utilized to boost the cash flow.
Mr. Connolly has been indicated on one count of securities fraud among several other criminal charges.
Tags: news
<!–enpproperty 2012-05-19 07:36:05.0Hu YuanyuanHousing price decline spreadingHousing price decline spreading1161354Business2@cndy/enpproperty–>
But there may be a rebound in 4th quarter as buildup in supply eases
More cities in China saw property prices decline last month on an annual basis, but rebounding sales could push up prices in the coming months, analysts said.
Out of 70 major cities tracked by the government, 46 recorded a year-on-year price fall in April, eight more than in March, the National Bureau of Statistics said on Friday.
Month-on-month, 43 cities recorded a price fall, while 24 remained flat. In March, 46 cities posted a price decline from the previous month.
Nicole Wong, regional head of property research at CLSA Research Ltd, said there may be a small fourth-quarter rebound in property prices after a buildup in supply starts to gradually ease.
“We expect the property price to increase 5 percent in the fourth quarter, after a flat second and third quarter,” said Wong.
“As both first-home buyers and property developers find it easier to get bank loans, we expect property sales will pick up,” said Wong.
Zhang Xiaohong, a senior official with the Ministry of Housing and Urban-rural Development, said that a correction in real estate market will continue in the coming months.
China began taking steps to curb property prices in 2010. These included tighter lending policies, higher down payments, a ban on third-home purchases, property tax pilot plans and the construction of more low-income housing.
Government officials have repeatedly stated that the curbs will stay in place, even after economic growth slowed to a near three-year low of 8.1 percent in the first quarter.
Though the government won’t ease the current curbs, it will be hard to add new ones, said Liu Feiguo, vice-president of E-Commercial China, a leading commercial property service provider.
The April home price data fueled concerns that a cooling property market will accelerate China’s economic slowdown, as property development investment accounts for more than 10 percent of the country’s GDP and affects many other industries.
These concerns dragged the benchmark Shanghai Composite Index down 1.44 percent to 2,344.52 points on Friday.
The State Information Center, a government think tank, said the property curbs, combined with sluggish external demand, will further weigh on the economy in the second quarter.
It forecast that GDP growth will slow further in the current quarter to 7.5 percent.
However, because of a sound employment situation, it is unnecessary to worry too much about the economic slowdown, the center said.
The People’s Bank of China has cut banks’ reserve requirement ratio by 0.5 percentage point to spur lending and stabilize growth.
The central bank lowered the RRR in November and again in February.
Housing rebound
Beijing’s property sales, including new and pre-owned homes, saw a strong rebound in the first half of May, according to the real estate brokerage Century 21. It said 7,132 apartments were sold in the first 15 days of May, up 103 percent year-on-year. Sales of pre-owned homes jumped 75 percent to 5,645 units.
“Property developers’ strategy of cutting prices to stimulate sales did work. Also, potential buyers’ sentiment improved,” said Su Ri, senior analyst from Century 21.
According to China Index Academy, the research unit of the country’s largest real estate website SouFun Holding Ltd, about 60 percent of the cities it monitors saw a rebound in property sales last week on a yearly basis.
Suzhou, Xiamen, Wenzhou, Lanzhou and Haikou had a rebound of more than 100 percent.
Some property developers have even increased prices.
China Resources Land Ltd plans to launch the second phase of its Spanish-style villa project in Beijing next month, and prices will probably be more than 20 percent above those on the first phase launched in November.
“Market sentiment did improve compared with the end of last year. And the number of our potential buyers, all of them buying for their own use, increased rapidly in recent months,” said Gao Xing, marketing director of China Resources Land (Beijing) Co Ltd.
The Singapore-based developer Capitaland plans to launch a new building in its project along Beijing’s eastern Fourth Ring Road at an average price of 42,000 yuan ($6,638) per square meter, compared with 39,800 yuan per sq m for the previous building, which it launched at the end of 2010.
Hu Jinghui, a senior real estate expert and vice-president of 5i5j Real Estate, said though the RRR cuts did not target the property market, the eased liquidity will help first-home buyers get mortgages and stimulate sales for owner-occupiers.
“We expect property sales for May will rebound strongly in Beijing”, Su added.
The turnaround time for existing inventories is expected to decline from 9.6 months to 7.8 months over the course of this year, according to CLSA research.
‘This amount of inventories will in fact keep property developers in competition with each other, thus helping prevent the property price from seeing a strong rebound,” Wong said.
According to CLSA research, the country’s gross sales in terms of floor area this year will grow 9 percent year-on-year.
Andy Rothman, China macro strategist for CLSA, the residential property market remains the key risk for the country’s economy this year.
Fixed-asset investment registered its lowest growth in a decade at 20.2 percent in the first four months of the year.
New property investment growth slowed to 18.7 percent from 23.5 percent growth in the first quarter, according to the NBS.
“Though first-home buyers have found it easier to get mortgages from banks and could obtain favorable mortgage rates, the government still needs to do more to stimulate first-home purchases,” said Rothman.
Xinhua contributed to this story.
huyuanyuan@chinadaily.com.cn
(China Daily 05/19/2012 page9)
Tags: news
IRVINE, Calif., May 18, 2012 /PRNewswire/ — TNP Strategic Retail Trust, Inc. (the “Company”), a public non-traded REIT that invests in grocery and drug-store anchored, multi-tenant necessity retail properties and other real estate-related assets, announced today its secured revolving credit facility with KeyBank National Association has increased the aggregate lending commitment from $35 million to $45 million, with a temporary increase to $60 million through December 1, 2012. The facility includes an accordion feature that allows for an increase in commitments under the facility up to $150 million as the Company continues to grow.
The Company may use the expanded credit facility for acquisitions, investments in properties and real estate-related assets and other general working capital purposes.
“We appreciate KeyBank’s continued support and confidence in our company,” said Thompson National Properties’ Executive Vice President and CFO, James R. Wolford. “We anticipate this increased flexibility from our expanded borrowing capacity will provide us with additional opportunities to compete for properties appropriate for TNP Strategic Retail Trust’s portfolio.”
About TNP Strategic Retail Trust, Inc.
TNP Strategic Retail Trust, Inc. is a publicly registered non-traded REIT that invests in grocery and drug-store anchored, multi-tenant necessity retail properties, located primarily in the Western United States, and real estate related assets, including investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate. TNP Strategic Retail Trust has acquired 17 shopping centers in 13 states containing more than 1.7 million square feet at an overall purchase price of approximately $219 million. For more information regarding TNP Strategic Retail Trust, please visit www.tnpsrt.com.
About Thompson National Properties, LLC
Thompson National Properties, LLC (TNP) is an international real estate advisory company, specializing in the creation and management of real estate investment funds. TNP uses a variety of investment structures to fit the needs of its investors, which are designed for both institutional and high net worth individual investors. Thompson National Properties is also a leader in both property and asset management and receivership services, a key element in any successful commercial real estate investment in today’s lender-driven marketplace.
Headquartered in Irvine, California, Thompson National Properties was founded in April 2008 and has six regional offices. As of May 18, 2012, Thompson National Properties manages a portfolio of 151 commercial properties, in 30 states, totaling approximately 17.4 million square feet, on behalf of over 5,600 investor/owners with an overall purchase value of $2.1 billion. For more information regarding Thompson National Properties, please visit www.tnpre.com.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: an inability to identify appropriate options and funding for acquisitions and investments; volatility in the debt or equity markets affecting the Company’s ability to acquire or sell real estate assets; the Company’s inability to make interest and principal payments on its outstanding indebtedness; national and local economic and business conditions; the ability to maintain sufficient liquidity and the Company’s access to capital markets; the performance of real estate assets after they are acquired; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. The Company undertakes no obligation to update any forward-looking statement contained herein to conform the statement to actual results or changes in the Company’s expectations. This release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent reports on Form 10-K, as amended, and Form 10-Q. Copies of these reports are available on our website and at www.sec.gov.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities.
SOURCE TNP Strategic Retail Trust, Inc.
Tags: news
Property investment has changed in recent years, but having support and advice from other investors is a good way to weather fluctuations and legal and market changes and come out on top.
Rachel Warrender has been a member of the Rotorua Property Investors’ Association for four years and told The Daily Post the most valuable return on her membership investment has been the interaction with other investors.
“It’s the networking – getting help with issues or answers to questions from other people who have already been there.”
With more than 60 members, the association includes people who are just starting out in property through to those with large, established portfolios or who work within the property industry.
“The market does change but, through the association, you get to talk to people doing other things and you can learn from them. We are like-minded people, interested in investing in residential and commercial property – from people who are just starting out to investors with large, established portfolios.”
Many of the more experienced investors have been through particular circumstances before and can talk about what worked and what didn’t and different people have experience in different aspects of property investment such as buying and holding, buying and selling or trading.
She got into property as part of long-term planning for her retirement and still sees it as a good investment, despite the slump in the property market in recent years and changes in tax legislation such as the abolition of depreciation on buildings.
Warrender said buying a property below valuation was the key, but it was important to look at the investment from the perspective of the tenants you want to attract.
“Ask what kind of tenants you want and would they live in the property you are looking at. Do the numbers and see whether they stack up.”
She works on the principle that, for every $100,000 she invests, she expects about $200 a week in rent and she also looks at how value can be added to the property by subdividing, adding an extension, putting in a new kitchen or bathroom or updating soft furnishings.
Membership of the association costs $205 for an individual or couple and $220-$460 for corporates and Warrender said that investment more than paid for itself through member discounts at a range of businesses, a subscription to the New Zealand Property Investor Magazine – including the Rotorua/Tauranga edition, and access to resources such as tenancy agreements through the New Zealand Property Investment Federation.
The association has its own website at rpia.org.nz and is also active on Facebook.
The June meeting of the Rotorua Property Investors’ Association is on Tuesday, June 12, from 5.30pm. It will include a presentation on landlording made easy by Brian Kerr, author of The Complete Guide to Landlording. For information contact info@rpia.org.nz
Tags: news
05/17/2012 | 07:03pm
Press Release
For Immediate Release
Cominar Real Estate Investment Trust
Announces May 2012 Monthly Distribution
TSX – CUF.UN
Quebec City, May 17, 2012 – Cominar Real Estate
Investment Trust (“Cominar” or the “REIT”) (TSX: CUF.UN)
announced today a distribution of 12.0 cents per unit
to unitholders of record as at May 31, 2012,
payable on June 15, 2012.
PROFILE as at May 17, 2012
Cominar Real Estate Investment Trust is the third largest
diversified real estate investment trust in Canada and
currently remains the largest commercial property owner in
the Province of Québec. The REIT owns a real estate portfolio
of 413 high-quality properties, consisting of 82 office, 158
retail and 173 industrial and mixed-use buildings that cover
a total area of 30.6 million square feet in Québec, Ontario,
the Atlantic Provinces and Western Canada. Cominar’s
objectives are to pay growing cash distributions to
unitholders and to maximise unitholder value by way of
proactive management and the expansion of its portfolio.
The REIT has a distribution reinvestment plan for its
unitholders that allows participants to reinvest their
monthly distributions in additional Trust units. Participants
will be given the right to receive an effective discount of
5% of distributions to which they are entitled in the form of
additional units. Additional information and enrolment forms
are available at www.cominar.com.
– 30 -
For information:
Michel Dallaire, Eng., President and Chief Executive
Officer
Michel Berthelot, CA, Executive Vice President and Chief
Financial Officer
Tel: (418) 681-8151 mdallaire@cominar.com mberthelot@cominar.com
distributed by
Tags: news
Germany’s multi-family housing market
is set to have the most deals in five years as investors
including private-equity firms are forced to sell almost 100,000
apartments to pay debt amassed in last decade’s buyout boom.
There were 2.9 billion euros ($3.7 billion) of apartment
property transactions in the first quarter alone, more than
three times the amount a year earlier, and the total this year
may exceed 6 billion euros, the most since 2007, according to
estimates by London-based real estate broker Savills Plc.
Fortress Investment Group LLC (FIG) (FIG) and Guy Hands’s Terra Firma
Capital Partners Ltd. are among private-equity firms facing debt
maturities after buying thousands of German properties with the
easy credit available in the years before the financial crisis
hit in 2008. Loans for the deals were typically packaged and
sold as commercial mortgage-backed securities. A total of 10
billion euros of German multifamily CMBS is now set to mature by
the end of 2014, according to data compiled by Bloomberg.
“The main issue facing the larger players is purely
refinancing risk on maturity due to the size of their
outstanding debt,” said Nassar Hussain, founder of London-based
real estate debt adviser Brookland Partners LLP.
Concern about the scale of refinancing required has
depressed the values of senior German multi-family CMBS,
providing opportunities to bet on the outcome. Debt sold by
German Residential Asset Note Distributor Plc, backed by
Deutsche Annington Immobilien AG’s loans, trade at 92.1 cents on
the euro, according to data compiled by Bloomberg.
JPMorgan Trades
One active buyer of senior German multi-family CMBS has
been JPMorgan Chase Co. (JPM) (JPM)’s $360 billion Chief Investment
Office, according to two people with knowledge of the matter,
who declined to be identified because the information is
private. The New York-based bank last week disclosed the CIO had
a $2 billion trading loss on synthetic credit derivatives.
JPMorgan spokesman Holger Ullrich declined to comment on the
CMBS investment.
Refinancing debt in Germany has become more challenging as
banks scale back lending as a result of stricter capital
standards, the sovereign-debt crisis and the continuing
stagnation of Europe’s CMBS market. Buyout firms and companies
that bought during the real-estate boom are being forced to
weigh alternatives including selling assets or pursuing an
initial public offering.
Gagfah Selling Apartments
Gagfah SA (GFJ), controlled by New York-based Fortress, said
earlier this month it may sell 38,000 apartments because 3.3
billion euros of mortgages backed by the properties are due to
mature next year. The company, Germany’s largest publicly traded
residential landlord with nearly 150,000 apartments, hired
investment bank Leonardo Co. to advise on the sale of its
properties in Dresden, which account for about a quarter of its
real estate.
Deutsche Annington, owned by funds managed by Terra Firma,
needs to refinance 4.46 billion euros of debt coming due in July
2013. The Bochum-based company owns and manages 215,000 homes
across Germany.
Vitus Immobilien Sarl, owner of 30,000 German homes, has
five loans maturing later this year. They totaled 580 million
euros at the end of 2011, according to notices to CMBS holders.
Vitus is owned by a group of funds managed by Blackstone Group
LP (BX) (BX), Round Hill Capital LLC, Deutsche Bank AG and Aviva Plc. (AV/)
The companies and their owners either declined to comment
or weren’t immediately available to comment on their refinancing
plans.
Limited Capacity
While there is some willingness among lenders and investors
to refinance the loans, banks and debt markets “cannot absorb
the level of capital needed,” Brookland’s Hussain said.
The success of buyout firms’ refinancing efforts depends on
how much debt financed their acquisitions and what they bought.
Some investor groups overpaid for inferior properties in eastern
Germany or depressed industrial regions. Others are struggling
to generate enough rental income to meet debts and some firms
face having to refinance substantial borrowings, according to
real estate advisers.
“In the heady days of 2005 to 2007, particularly,
international private equity paid increasingly large multiples
for German multi-family housing portfolios,” said Robin Priest,
a senior adviser with turnaround firm Alvarez Marsal’s
European real-estate advisory unit.
Some firms’ leveraged bets were based on unrealistic
assumptions about rental growth, valuations and operating costs,
according to Priest.
Surprised Germans
“The assumptions and capital structures that were deployed
served to turn a formerly mundane asset class into something
rather more exciting,” Priest said. “Germans looked on in
surprise and many of those same Germans are now looking to buy
back in at rather more comfortable multiples.”
The best properties in cities like Berlin, Hamburg and
Frankfurt generate gross rental income equivalent to about 5
percent of the purchase price, while a 10-year German government
bond yields a record-low 1.41 percent. Apartment-block values,
which investors gauge by multiples of annual net rental income,
vary from 19 times in Munich, the most desirable investment
location, to as low as 8.5 times in Gelsenkirchen, a former
coal-mining city, Savills said.
Property companies and real-estate funds are among those
looking to take advantage of the latest opportunities to invest
in German multi-family housing, according to Rolf Elgeti, chief
executive officer of TAG Immobilien AG (TEG), which in March agreed to
buy DKB Immobilien AG from Bayerische Landesbank for 960 million
euros including debt, more than doubling its portfolio to about
56,000 homes.
‘Real Money’
“People are going to look back at 2012 and say this was
the year that real money came back to invest in the big
residential portfolios in Germany,” Elgeti said in an
interview, referring to opportunity funds, pension funds,
insurance companies and public companies.
Cerberus Capital Management LP, the U.S. private-equity
firm led by Stephen Feinberg, agreed to buy 22,000 housing units
in a 985 million-euro debt restructuring from the liquidator of
Speymill Deutsche Immobilien Co., or SDIC, the New York-based
firm said in a May 16 statement. Benson Elliot Capital
Management LP in March acquired 3,000 apartments and commercial
units formerly owned by SDIC, which had defaulted on a 187
million-euro loan packaged into CMBS.
Since September, Blackstone Group has acquired about two-
thirds of the 21,000 apartments and 700 commercial properties
owned by Level One, which was placed in insolvency
administration in August 2008 owing creditors 1.5 billion euros.
Blackstone paid a total of around 450 million euros for the
assets.
Buyers Reconsidering
“Prices on smaller lots have gone up, but in the bigger
portfolios prices are not overheated,” said Thomas Zinnoecker,
chief executive officer of GSW Immobilien AG (GIB), which raised about
190 million euros earlier this month to buy properties. “People
who bought five to eight years ago are now asking themselves ‘Do
I still want to be here?”’
Borrowers will probably find it easier to refinance if debt
is less than two-thirds of the value of the real estate, Conor O’Toole, a London-based asset-backed securities analyst at
Deutsche Bank AG (DBK), said in an interview. Smaller U.S. buyout
firms or borrowers with little expertise in the German
residential market will have more difficulty, he said.
Accelerating asset sales “will be one of the key
strategies for mitigating refinancing risk,” O’Toole said in a
note to investors in March.
Preparing for IPO
GSW Immobilien refinanced more than 890 million euros of
CMBS in February 2011. The deal and cost cutting cleared the way
for Cerberus and funds managed by Goldman Sachs Group Inc. (GS) (GS) to
complete a 468 million-euro IPO of GSW in April 2011.
Deutsche Annington may be preparing for an IPO by
incorporating into a common-stock company to facilitate the
share sale. Chief Executive Officer Wijnand Donkers said in an
interview with Immobilien Zeitung this month that it was close
to completing its refinancing of some of its CMBS debt.
The amount of residential real estate on the market is
complicating buyout firms’ efforts to sell assets bought during
the boom. Germany’s government is looking to sell TLG Wohnen
GmbH and Bayerische Landesbank plans to dispose of GBW
Immobilien. Together, they own about 44,000 apartments. There
are also residential assets for sale owned by companies that
have defaulted or are insolvent.
Barclays Plc (BARC) is seeking to sell its Baubecon Immobilien
GmbH unit, which it values at 1 billion pounds ($1.6 billion).
GSW and Goldman Sachs-managed Whitehall Street Real Estate fund
have made an offer to acquire Baubecon, which has 21,000 housing
units. Deutsche Wohnen is also competing for Baubecon.
Patrizia Immobilien AG (P1Z) led a group of investors that
acquired 21,000-unit LBBW Immobilien GmbH for 1.4 billion euros
in February from Landesbank Baden-Wuerttemberg, Germany’s
biggest state-owned lender.
“The time for pure private-equity investment that we had
five or six years ago is over because investors simply cannot
get the leverage and returns they did before,” Klaus Schmitt,
the Augsburg-based real estate company’s chief operating
officer, said in an interview.
To contact the reporters on this story:
Simon Packard in London at
packard@bloomberg.net;
Neil Callanan in London at
ncallanan@bloomberg.net;
Dalia Fahmy in Berlin at
dfahmy1@bloomberg.net.
To contact the editors responsible for this story:
Andrew Blackman at ablackman@bloomberg.net;
Rob Urban in New York at
robprag@bloomberg.net.
Tags: news
By CANDACE JACKSON And LAUREN A.E. SCHUKER
Some kids cost a fortune.
In a real estate shopping spree of epic proportions, the daughters of Formula 1 Racing boss Bernie Ecclestone have snapped up hundreds of millions of dollars worth of high-profile properties in the past 18 months. Tamara, 27, bought a 16,000-square-foot historic brick home across the road from Kensington Palace, where Prince William and Duchess Catherine will soon take up residence, for about $70 million early last year. Her 23-year-old sister Petra paid $85 million for a 57,000-square-foot Los Angeles mansion a few months later. Known as “the Manor,” the 14-bedroom, 27-bathroom home was built by Candy Spelling and her late TV producer husband Aaron Spelling.
The sisters are among a small number of ultra-wealthy, young people who are making waves at the very top of the real estate market. A trust linked to Ekaterina Rybolovlev, the 22-year-old daughter of Russian fertilizer billionaire Dmitry Rybolovlev, bought a four-bedroom penthouse in New York for $88 million earlier this year. Another young Russian, Anna Anissimova, the 27-year-old actress daughter of Vasily Anissimov, who made his billions in iron ore and aluminum, recently put her New York apartment on the market for $50 million. (She paid $9.9 million for the apartment in 2004, when she was 19.) Megan Ellison, the 26-year-old daughter of software mogul and Oracle CEO Larry Ellison, bought three homes in the Hollywood Hills over the last few years, one of which she put on the market recently for $15.5 million.
Still, it was Petra’s purchase of the Spelling mansion that “changed the perception of who a buyer could be,” said Rick Hilton, who represented both Ms. Stunt and Ms. Spelling in the sale, noting that he now looks at younger buyers much more seriously. He added that Petra’s desire to buy such a statement home surprised him, considering her age. “At first, I showed her several properties but they weren’t grand enough,” he remembered, including a 36,000-square-foot French-style mansion on Sunset Boulevard now listed for $49.5 million. “When those earlier homes didn’t excite her, I saw very quickly that…she wanted the finest estate available, and that’s what she got.”
The Ecclestone sisters exemplify the way many of the ultra-wealthy, and ultra-young, buy real estate. They often make up their minds quickly. They like to customize their homes to their highly specific tastes, on a quick turnaround with few expenses spared. Petra Stunt, who married entrepreneur James Stunt last August, negotiated the deal to buy her Los Angeles home the week after she saw it. And she recently moved in following an extensive 12-week renovation, an unusually short turnaround for a job of that magnitude. Ms. Ecclestone’s Kensington home is also being finished on an accelerated timetable, according to the builder, about half the typical time frame for a project of that scale.
Though the sisters are sometimes portrayed in the British press as rivals, Ms. Ecclestone said they are best friends who speak on the phone or text message several times a day; the letter “P” in script is tattooed on her wrist for Petra. Ms. Stunt surprised her sister when she called from Los Angeles, where she was vacationing with her then-fiancé last spring for Easter, to say she was planning to buy a house there. “When she has something in mind that she wants, she just goes for it,” said Ms. Ecclestone. “I’m the same way.”
Ms. Ecclestone is also planning to convert a London pub her father purchased for her into a private home, which she estimates she’ll market for roughly $16 million. Ms. Stunt is separately in the midst of renovating a four-story home in London’s posh Chelsea neighborhood, which she purchased around the end 2010 for about $90 million. Real estate veterans said it’s somewhat unusual for that number of purchases to happen in the same family in such a compressed time frame. “Most high-profile, uber wealthy people prefer to remain under the radar and would shy away from such purchases in bulk,” said I. Dolly Lenz, a luxury real-estate agent in New York.
Ms. Ecclestone now lives about a block from where she and her sister grew up in Chelsea. Her current home, which she plans to sell when her new place is ready, is decorated with photos of the family on ski vacations and at formal events, artwork by Damien Hirst and Anish Kapoor and a sculpture of a Hermes Birkin bag. A bedroom she’s converted into a closet is filled with her collection of Ugg boots and Louboutin heels. Wearing Lululemon yoga pants and a fitted hoodie, Ms. Ecclestone sat in her living room, overlooking an outdoor lap pool, and explained that she sees their real estate holdings as smart purchases. “I think London [property] is a really good investment,” she said. “There’s no bank in the world that can give you that return.”
In shopping for real estate, Ms. Eccelstone said she keeps resale value in mind and that a premium location and security are paramount considerations. Her guiding philosophy is to buy “the best property I could find.”
After looking at many houses, Ms. Ecclestone said she immediately knew she wanted the home in Kensington Palace Gardens. The estate agent who brokered the deal, Louise Hewlett, said her client understood that the purchase price was “a large sum of money” but that by refurbishing the home, “the value would go up tremendously.” She added that her client has already gotten two offers of well-above what she paid.
Tim Wright, an estate agent with Knight Frank who was not involved in the deal, describes the location as “the most exclusive street in London, bar none.” Mr. Wright said with only 30 homes on the block, many of them embassies or ambassadorial residences, renovated properties there tend to sell quickly.
Sayed Bukhari, owner of the building, construction and design company that Ms. Stunt retained to work on her Chelsea home, said she’s already received several offers in excess of $125 million on it. “When she first bought the house, people were really skeptical about whether it was a good investment,” he said. “She has proven everyone completely wrong.” Real estate brokers in L.A., however, are less sure Ms. Stunt’s purchase there, which included a pricey renovation, will turn out to be such a sound investment. “She would probably need to get a $100 million offer on the home just to break even,” said Stephen Shapiro, a top luxury broker. “And there aren’t too many buyers looking in that range in L.A.… so far, she’s the only one.” When it comes to selling a property in the $100 million range in L.A., he added, “You are kind of stuck waiting for the next Petra Ecclestone.”
One thing the sisters’ newest homes share is Gavin Brodin, a Los Angeles-based designer-builder whose past projects have included homes for Kate Beckinsale and Sylvester Stallone. He met Ms. Ecclestone about a year and a half ago poolside at the resort where they were both vacationing in Cabo San Lucas, Mexico, introduced by a mutual friend. Since then, he’s been working 15- to 18-hour days to complete both sisters’ homes on an accelerated timetable. For her second home in London, however, Ms. Stunt hired design firm Candy Candy, which caters to Russian oligarchs and celebrities such as Gwyneth Paltrow.
Built in 1991, Ms. Stunt’s Los Angeles home sits on five acres in Holmby Hills and has parking for 100 cars. Ms. Stunt’s renovation was completed in less than three months with 500 workers. The closet of the master suite—which at 7,000 square feet has its own kitchen and living room—is two levels, connected by a pair of staircases.
Ms. Ecclestone, who lives with her private investor boyfriend Omar Khyami and their six dogs, said she plans to move into her house in Kensington in October. Her renovation and expansion of the historic mansion requires about a dozen managers and 80 construction workers on site five days a week. The exclusivity of the gated block means only large construction truck is allowed on the property each day, creating a further challenge for workers, who are also required to be off-site by 5 p.m. every day.
Designer Mr. Brodin relocated to London to oversee the project last year. “It’s nonstop,” he said, sitting in a temporary office strewn with planning documents.
A 45-foot-deep hole in the ground will become a 4,000-square-foot, two-story underground addition with a pool with a bar, spa and entertainment center with a nightclub and bowling alley. A multi-room master suite will have separate cocktail and Champagne bars. Mr. Brodin had a staffer travel to Brazil to purchase a giant slab of smoke quartz crystal for the master suite’s bathtub. When done, the home will be 20,000 square feet. Everything in it—from the cutlery to the seats in the 3D movie theater—will be custom-designed.
“I’m definitely, ‘Go big or go home,’” Ms. Ecclestone said.
The son of a fishing trawler captain who quit school to race motorcycles, Bernie Ecclestone built his fortune from auto sales, property and the transformation of Formula 1 into one of the world’s most popular sports. He married Slavica Radic, a Croatian fashion model, in 1985 and said he tried to instill in his daughters a sense of what money was worth.
Mr. Ecclestone and his wife divorced in 2009, and he recently became engaged to a 35-year-old Brazilian named Fabiana Flosi. Mr. Ecclestone said he has a close relationship with his daughters but did not advise them on their most recent real estate purchases. With their mother, the sisters are beneficiaries of an off-shore family trust known as Bambino Holdings, of which Mr. Ecclestone said he has no oversight. “I can’t control them at all,” he said. Along with the trustees, their mother “has been looking after them. And it’s right for a mother to do that.”
Mr. Ecclestone, whose daughters are often photographed wearing stiletto heels, towering over his 5-foot-3-inch frame, said that by giving them money now, “they will want to be independent and make their own money as they spend it.” “I think it’s better they make their own mistakes in the world and they’ll learn quicker,” he said, adding that he’s proud of his daughters’ real estate investments, made independently from him. He said he did not pay for Ms. Stunt’s London home. Public records show that Ms. Stunt borrowed the bulk of the money from her mother—$82.4 million—to pay for her $85 million mansion in LA.
Neither sister graduated from university. After attending briefly, Ms. Ecclestone got a job at an Armani retail store, which she quit after six months. “I found it shocking how rude people were,” she said. She later worked as a TV host and model and is launching her own line of luxury hair products and lingerie.
At 19, Ms. Stunt launched a menswear label but folded it quickly thereafter. Earlier this year, she launched a line of high-end clutch purses with names like High Maintenance, Clutch Me and Morning After. Friends describe Ms. Stunt, the younger sister, as the shyer of the two, but more free-spirited. “She’s quite airy-fairy and likes to make her mind up last-minute,” said Ms. Ecclestone. Ms. Stunt initially agreed to an interview but canceled; her publicist said one of her dogs got sick.
The sisters attract their share of criticism. In London, construction to renovate Ms. Stunt’s Chelsea home, including installing a 25-foot wide aquarium and digging down dozens of feet to create a 10,000-square-foot basement with an indoor pool, squash court, gym, beauty salon and spa, has sparked ire. Terence Bendixson, honorary secretary of planning for the Chelsea Society, a community organization, said Ms. Stunt’s London home was turning into “a neo-Georgian pastiche of the kind spec builders put on Bishop’s Avenue for people with lots of money and no taste.”
Isla Baring, a philanthropist who lives nearby, said the construction is so disruptive that she and several neighbors sent Mr. Ecclestone a letter last month asking for compensation. “We suggested that he give us some money rather than throwing it all away on his spoiled daughter so she can live in this enormous monster of a house,” she said. Mr. Ecclestone said he replied to the letter saying that the home was not under his ownership. “They were passionate to get some money any way they could,” he said.
Last year Ms. Ecclestone starred in a reality program about her life called “Billion $$ Girl.” One episode depicted her taking her dogs to Harrod’s for facials and pedicures. Another shows her debating cancelling a meeting because she woke up with a pimple on her face.
Her participation in the show, in the midst of a recession, drew criticism from many, including her father. Mr. Ecclestone said he could barely make it through one episode. “I spoke to her before and said… ‘They’re never going to show you in a good light,’ ” he said. “She was stupid to do it.”
Ms. Ecclestone took the criticisms in stride. “It’s like water off a duck’s back,” she said.
She said her true passions don’t lie in property but in creating a luxury brand and modeling. On a recent afternoon after a pilates class, she climbed into a chauffeured Land Rover and headed to a sushi restaurant. At lunch, she ran into a friend who was dining with the actor Tom Hardy, who plays the villain in the upcoming Batman movie, “Dark Knight Rises.”
Ms. Ecclestone said the attention and speculation doesn’t bother her. “I kind of feel like people [in the U.K.] want you to apologize for what you have,” she said. “Petra and I are like, ‘Why should we have to apologize that our father’s this amazing businessman who gave us this great life?’”
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PHILADELPHIA, May 16, 2012 (BUSINESS WIRE) –
Pennsylvania Real Estate Investment Trust
/quotes/zigman/237976/quotes/nls/pei PEI
-1.11%
announced today
that its Board of Trustees has declared a quarterly cash dividend of
$0.16 per common share, which represents a 6.7% increase over the prior
dividend amount. The dividend will be paid on June 15, 2012 to common
shareholders of record on June 1, 2012. The June 15, 2012 dividend
payment will be PREIT’s 141st consecutive distribution since its initial
dividend paid in August of 1962.
The Company also announced today that its Board of Trustees has declared
the initial dividend on its 8.25% Cumulative Redeemable Perpetual
Preferred Shares of $0.3151 per share. The dividend will be paid on June
15, 2012 to holders of record on June 1, 2012, and for this period,
represents the dividend accrued from the date of the original issuance
of the Preferred Shares, April 20, 2012 to the dividend payment date,
June 15, 2012.
About Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of
the first equity REITs in the U.S., has a primary investment focus on
retail shopping malls. Currently, the Company’s portfolio of 49
properties comprises 38 shopping malls, eight community and power
centers, and three development properties. The properties are located in
13 states in the eastern half of the United States, primarily in the
Mid-Atlantic region, totaling approximately 33 million square feet of
operating space. PREIT, headquartered in Philadelphia, Pennsylvania, is
publicly traded on the NYSE under the symbol PEI for its common shares
and PEI PrA for its preferred. The Company’s website can be found at
www.preit.com .
Forward Looking Statements
This press release contains certain “forward-looking statements” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements relate to
expectations, beliefs, projections, future plans, strategies,
anticipated events, trends and other matters that are not historical
facts. These forward-looking statements reflect our current views about
future events, achievements or results and are subject to risks,
uncertainties and changes in circumstances that might cause future
events, achievements or results to differ materially from those
expressed or implied by the forward-looking statements. In particular,
our business might be materially and adversely affected by uncertainties
affecting real estate businesses generally as well as the following,
among other factors: our substantial debt and our high leverage ratio;
constraining leverage, interest and tangible net worth covenants under
our 2010 Credit Facility; our ability to refinance our existing
indebtedness when it matures, on favorable terms or at all, due in part
to the effects on us of dislocations and liquidity disruptions in the
capital and credit markets; our ability to raise capital, including
through the issuance of equity or equity-related securities if market
conditions are favorable, through joint ventures or other partnerships,
through sales of properties or interests in properties, or through other
actions; our short- and long-term liquidity position; current economic
conditions and their effect on employment, consumer confidence and
spending and the corresponding effects on tenant business performance,
prospects, solvency and leasing decisions and on our cash flows, and the
value and potential impairment of our properties; general economic,
financial and political conditions, including credit market conditions,
changes in interest rates or unemployment; changes in the retail
industry, including consolidation and store closings, particularly among
anchor tenants; our ability to maintain and increase property occupancy,
sales and rental rates, in light of the relatively high number of leases
that have expired or are expiring in the next two years; increases in
operating costs that cannot be passed on to tenants; risks relating to
development and redevelopment activities; the effects of online shopping
and other uses of technology on our retail tenants; concentration of our
properties in the Mid-Atlantic region; changes in local market
conditions, such as the supply of or demand for retail space, or other
competitive factors; potential dilution from any capital raising
transactions; possible environmental liabilities; our ability to obtain
insurance at a reasonable cost; and existence of complex regulations,
including those relating to our status as a REIT, and the adverse
consequences if we were to fail to qualify as a REIT. Additional factors
that might cause future events, achievements or results to differ
materially from those expressed or implied by our forward-looking
statements include those discussed in the section of our Annual Report
on Form 10-K in the section entitled “Item 1A. Risk Factors.” We do not
intend to update or revise any forward-looking statements to reflect new
information, future events or otherwise.
SOURCE: Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust
Robert McCadden, 215-875-0735
EVP CFO
or
Nurit Yaron, 215-875-0735
VP, Investor Relations
Copyright Business Wire 2012
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