Monday, March 23, 2009

Fitch Forecasts Still More Rising Retail Vacancies

NEW YORK, NY, Mar. 23, 2009--Loss severities on retail loans are likely to trend upward for the next several years as defaults on retail loans increase, according to Fitch Ratings.

‘Declining consumer spending and the shrinking U.S. economy will increase retail vacancies to a new high as bankruptcies, store closings, and retail consolidation continues’, according to Senior Director Adam Fox.

During the 2002 recession, which coincided with Kmart’s bankruptcy filing, the average retail vacancy rate was 12%. PPR reported a year-end (YE) 2008 rate of 15% and predicts the rate will reach 17.8% by YE 2009.

The International Council of Shopping Centers (ICSC) predicts that 73,000 stores will close during the first half-2009.

Increased vacancies in the retail sector will lead to longer resolution times as it will take longer to re-tenant space which will ultimately result in higher losses.’ said Managing Director Mary MacNeill.

Fitch expects losses on retail loans may increase as much as 34% to 60% from the five-year cumulative average of 44% for current defaults.

Special servicers will foreclose on properties, as borrowers become unable to fund operating shortfalls due to the loss of tenants.

During its reorganization, Kmart rejected leases on over 600 stores. CMBS loans secured by Kmart properties, which took a loss, incurred an average loss of 52%. Losses ranged from a low of 16% to a maximum of 86% with the highest losses on single tenant properties in tertiary markets.

Fitch believes vacant retail spaces in the current economic environment, will incur even higher loss severities. Working against CMBS this time around is that the U.S. economy is contracting faster and further than in the 2002 recession.

Gross Domestic Product still grew 1.6% in 2002 while in the last quarter of 2008, GDP contracted at an annualized rate of 6.2%, the deepest slide in twenty years. Unemployment has increased 42% from 2002 to 8.1% as of February 2009, with increases expected to continue.

Consumer spending has declined 4.3% as of year-end 2008, while in 2002 and 2003 it remained positive. Special servicers may need to explore several different options to maximize recoveries.

Single tenant spaces can be marketed to non-traditional entertainment tenants. Conversely, they can be subdivided in order to attract smaller tenants. Large vacant mall locations, such as those left vacant by Steve & Barry’s or Macys, typically find more interest by subdividing the space or even selling the space back to the mall operator for redevelopment.

Retail delinquencies account for $1.7 billion of the $6.2 billion total delinquencies in the Fitch Loan Delinquency Index. The Loan Delinquency Index across all property types is 1.28%; with 1.17% of all retail loans within the index currently delinquent.

Fitch expects defaults in the retail sector to contribute a greater percentage of the index into 2010.

Adam Fox +1-212-908-0869, Mary MacNeill +1-212-908-0785 or Susan Merrick +1-212-908-0725, New York.

Media Relations: Sandro Scenga +1-212-908-0278;

Crescent Hotels & Resorts Announces Plans for Record Growth in 2009 on Heels of Record 2008

Focus Will Be in U.S., Caribbean, Canada

WASHINGTON, DC, Mar. 23, 2009—Officials of Crescent Hotels & Resorts today announced plans to continue its record pace of growth in 2009, on the heels of a record 2008.

(Detroit Marriott Livonia, Livonia, MI, top right photo)

The company added 18 properties during 2008, largely through 3rd party management and joint ventures.

The company’s continued growth has propelled Crescent into the top tier of independent operator/owners, and it now is one of only a handful of companies that are approved to operate all of the top premium-branded, full- and focused-service hotels.

(Plymouth DoubleTree West, Plymouth Meeting, PA, top left photo)

“We have created a strong operating platform, and are well positioned to benefit from the current economy as we move into 2009 and beyond,” said Michael George, Crescent president and CEO.

(Richmond Embassy Suites, Richmond, VA, middle right photo)

“We have the talent, infrastructure and systems to accommodate strategic growth, as well as a strong proven track record in all product types and phases of the economic cycle and significant available capital to support our growth and operating goals.”

(Hilton Polaris, Columbus, OH, middle left photo)

Crescent’s primary focus in 2009 will be on optimizing returns for its existing hotel owners and investors. “We will grow by pleasing our clients & investors and by outperforming our competitive sets in each market,” said George.

“Building on our current successful track record will help us attract more clients to our company. Our growth will be on an opportunistic, flexible basis, and we have multiple platforms in place to respond appropriately.”

(The Georgian Terrace, Atlanta, GA, middle right photo)

2009 Growth Focus on U.S., Caribbean, Canada

In 2009, the company is targeting continued strong growth in the U.S., and expansion in the Caribbean, where the company added its first property in 2008, as well as Canada.

“We see opportunities to grow our current portfolio of managed hotels in Canada and the Caribbean,” George said. “We have considerable experience in both regions and believe we can add value to properties, especially in this economy.”

(Sheraton Tampa Riverwalk, Tampa, FL, bottom left photo)

Elite Group of Top 10 Nationwide Operators

“Our strong operating results have helped us grow to be one of the top 10 national operators of upper upscale hotels and resorts.

"Our properties include all of the premium brands, as well as leading boutique hotels and resorts, ranging in size from 50 to 500-plus rooms. We have the economies of scale and systems that can benefit a hotel immediately upon takeover.”

(Sheraton Washington North, Beltsville, MD, bottom right photo)

Additions to the portfolio in 2008 include such well-regarded properties as:

· The Georgian Terrace—The Atlanta-based, grande-dame hotel currently is undergoing an $11 million renovation being overseen by Crescent, including a spectacular, new $6 million restaurant designed by The Puccini Group.

· Hilton Polaris—The recently opened 255-room property, located in Columbus, Ohio, has become a market leader since Crescent took over management in 2008.

· Secret Harbor Resort—The 90-unit, all-suite resort, situated on the east end of St. Thomas, The Virgin Islands, marked Crescent’s entry into the Caribbean.

Additional information about Crescent Hotel & Resorts may be found on the company’s Web site

Contact: Jerry Daly or Chris Daly, media, (703) 435-6293

MGM Mirage completes Las Vegas sale of Treasure Island to Billionaire Phil Ruffin

LAS VEGAS, NV, Mar. 23, 2009 -- MGM MIRAGE (NYSE: MGM) announced that it has completed its previously announced sale of Treasure Island Hotel & Casino ("TI") (top right photo) to Ruffin Acquisition, LLC for $775 million. Ruffin Acquisition, LLC is wholly owned by Phil Ruffin. (middle right photo)

At closing, MGM MIRAGE received $600 million in cash proceeds and a $175 million secured note bearing interest at 10% payable not later than 36 months after closing.
Ruffin Acquisition, LLC has an option to prepay this note on or before April 30, 2009 and receive a $20 million discount on the purchase price. The note is secured by the assets of TI and will be senior to any other financing.

"TI is in great hands with Phil Ruffin and we wish him and all of the property's wonderful employees nothing but the best," said Jim Murren, (bottom left photo) Chairman and CEO of MGM MIRAGE.

TI is located on the Las Vegas Strip and features 2,885 guest rooms and suites, approximately 87,000 square feet of gaming space, several fine and casual dining outlets, The Sirens of TI - the iconic pirate battle attraction, and Mystere, the first permanent production in Las Vegas by Cirque du Soleil.

"We are very excited to have acquired such a stellar resort in Treasure Island," said Mr. Ruffin. "The property is in pristine condition, ideally located in the heart of the Strip," Mr. Ruffin noted.

As a result of the sale, MGM MIRAGE expects to report a substantial gain in the first quarter.

MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected companies with significant holdings in gaming, hospitality and entertainment, owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau.

CityCenter, an unprecedented urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World.

MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts in the People's Republic of China, Abu Dhabi, U.A.E. and Vietnam.

MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE has received numerous awards and recognitions for its industry-leading Diversity Initiative and its community philanthropy programs.

For more information about MGM MIRAGE, please visit the company's website at

GVA Advantis Presents Tampa Industrial Market Report for Fourth Quarter 2008

TAMPA, FL--In his fourth quarter Industrial Market Report, Randy Smith ( top right photo), regional director of research, GVA Advantis, Tampa, says the quarter marked a significant downturn in the economy as the nation’s gross domestic product nose-dived by 6.2 percent.

This collapse, along with sluggish consumer spending and declining industrial production throughout 2008, combined to stifle the demand for industrial space.

Vacancy in Tampa’s industrial market grew steadily in 2008 — the direct vacancy rate rose by 300 basis points to end the year at 7.3 percent.
Rent performance weakened in response to the increased availability of Tampa’s industrial space.

The average asking rental rate, which peaked at year-end 2007, declined by 15.9 percent during 2008 to end the year at $6.44 per square foot.

Tampa’s industrial sales maintained some momentum in the final quarter of 2008, totaling $48 million in transactions closed.

This period also produced Tampa’s largest industrial deal of 2008 — a portfolio of 15 flex buildings located in east Tampa’s Breckenridge Park which traded for $28.4 million. The buyer, Miami-based Adler Group, Inc., acquired the 332,582-square foot complex in October using a $100-million fund seeded by a major European investor.

It’s clear that industrial property owners will face a challenging year in 2009.

Tampa’s linkage to residential housing was a primary cause of its downturn in local industrial activity and continuation of this housing turmoil in 2009 will contribute to increased vacancies.

New industrial construction is gearing down in Tampa, with about 300,000 square feet of speculative space to be completed in the first quarter of 2009.

The tightening credit markets will make financing new industrial projects more difficult and be another strong constraint on additional supply.

For a complete copy of the news release and fourth quarter 2008 results, please contact:

Randy Smith, MBA, Regional Director of Research, Advantis Real Estate Services Co.,
3000 Bayport Drive, Suite 100. Tampa, FL 33607. Tel 813.342.4725. Fax 813.372.4004. E-mail

Arbor Closes Three Fannie Mae DUS® Loans Totaling $52.9M

UNIONDALE, NY (Mar. 23, 2009) – Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of three (3) loans totaling $52,900,000 under the Fannie Mae DUS® product line. These loans include:

· Battleground North Apartments, Greensboro, NC (top right photo) – A 288-unit complex in the amount of $16,200,000 funded under the Fannie Mae DUS® product line. The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.24 percent.

Eagle Point Village, Fayetteville, NC (middle left photo) – A 300-unit complex in the amount of $18,700,000 funded under the Fannie Mae DUS® product line. The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.24 percent.

Cedarcrest Village, Lexington, SC (bottom right photo)– A 300-unit complex in the amount of $18,000,000 funded under the Fannie Mae DUS® product line. The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.15 percent.

The loans were originated by John Edwards, (bottom left photo) Vice President, in Arbor’s full-service Boston, MA lending office and financing was arranged by Carolina Mortgage Company in Fayetteville, NC.
“We are extremely pleased with the opportunity to provide financing for the Carroll Companies,” said Edwards.
“In this ever-changing lending environment, we endeavored to provide our client with the greatest level of flexibility, and we sincerely look forward to continuing our business relationship, assuring Carroll Companies our best attention.”

Contact: Ingrid Principe, (516) 506-429 8333,,

John Sturgess Joins Hunter Realty Associates, Inc. as Managing Director

ATLANTA, GA, Mar. 23, 2009 — Hunter Realty Associates, Inc., a leading hotel investment services firm, today announced that John Sturgess (top right photo) has joined the company as managing director. He will play a pivotal role in the company’s plan to expand nationally.

Previously, Sturgess was corporate senior vice president of development for Carlson Hotels Worldwide.

In his role, Sturgess led the team responsible for the overall strategic direction of the development of Carlson’s hotel brands in the Americas, resulting in more than a 220 percent increase in new contracts including doubling the Country Inns & Suites by Carlson portfolio.

Prior to Carlson, Sturgess was vice president of development for Prime Hospitality Corp. In that capacity he handled franchise sales, acquisitions and market analysis for AmeriSuites Hotels.

Sturgess has held other executive positions throughout his 20 year career in the hotel business, including management positions with Doubletree Hotels Corporation and Richfield Hospitality Services, Inc.

“We have expanded our reach and our sales significantly over the past few years, earning us the Hotel Brokerage Firm of the Year award by Hotel Brokers International (HBI) for the past three years,” said Teague Hunter, (bpttom left photo) CHB, president.

“With the opening of our Washington, D.C. office 2½ years ago, we have been servicing the entire Eastern seaboard, but see additional opportunities across the country."

Contact: Jerry Daly, Chris Daly, media, (703) 435-6293,