- Paris Bank Mysteriously Rejects Baltimore Banker's $75M Construction Loan Renewal
- Colony Financial Raises $255M in Stock Sale
- More Capital Shifting into Real Estate, Predicts Barclays Exec
- Bernanke Warns Dark Days Still Ahead for Commercial Real Estate
- Ladder Capital Shelves IPO Plans as REIT Market Heats Up
(BALTIMORE, MD) -- Baltimore banker Edwin F. Hale is puzzled. His three-year-old, $75 million loan from Paris-based Natixis USA to build the $1 billion First Mariner Tower-Canton Crossing project is being rejected.
The total repayment deadline was Aug. 1. And the bank won't tell him why it is not extending the loan, reports the Baltimore Sun. Hale is chairman and CEO of First Mariner Bancorp.
Worse, the French lender has scheduled a foreclosure auction on the Downtown property for Oct. 21. Natixis says the total amount now owned on the loan, with interest, is $84 million.
Hale thinks the bank may think his total business debt is over-loaded. He also has a power distribution deal with Baltimore-based Constellation Energy Group. Hale built a $19 million plant in 2006, planning to distribute power to condominium and hotel tenants at Canton Crossing.
The plant, however, violated state energy regulations and two builders pulled out of contracts. Hale then sued Constellation in July of this year for $65 million. The banker's suit alleges Constellation misled him into building the plant.
Constellation's motion to dismiss the suit is set for an Oct. 23 hearing in Baltimore City Circuit Court. Stay tuned.
(LOS ANGELES, CA) -- Colony Financial Inc. (NYSE: CNLY) had a good pay day this week. The Los Angeles-based firm raised $250 million from its initial public offering and $5 million from a private placement of company stock. The public offering was for 12.4 million shares at $20 each. The stock is trading in the $20 range.
Company officials say the proceeds will be used to buy and establish commercial mortgage loans, other commercial real estate-related debt investments, commercial mortgage-backed securities and other assets.
Bank of America Merrill Lynch, Goldman, Sachs & Co., Morgan Stanley and UBS Investment Bank were the joint book-running managers for the offering. Calyon Securities Inc., HSBC, JMP Securities, Keefe, Bruyette & Woods and RBC Capital Markets acted as co-managers.
(NEW YORK, NY) -- Although capital markets have opened up in the last few months, lenders and investors still steer far clear of the levels of risk they were willing to take before the global credit crisis hit in 2007, real estate and finance company executives were told at the Reuters Restructuring Summit in New York.
"A lot of the investors I'm hearing about are now thinking of shifting their focus to real estate, because that's where they see the opportunities," Mark Shapiro, head of global restructuring and finance at London-based Barclays Plc's (BARC.L) told the Reuters gathering. "That's probably where you're going to see capital shifting."
"Commercial real estate remains a very serious problem," Federal Reserve Chairman Ben Bernanke told the House Financial Services Committee this week.
"We are concerned, both because the fundamentals are weakening and because the financing situation is bad (and) could provide a source of a lot of stress, particularly for small and regional banks that have a very heavy concentration in commercial real estate," Reuters reported.
A day earlier, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said commercial real estate posed one of the biggest risks to his "measured optimism" for a U.S. economic recovery.
"Lots of commercial construction is still in process, and until growth of supply stops, the industry statistics will continue to deteriorate," he said.
(NEW YORK, NY) -- Ladder Capital Realty Finance Inc. has shelved its IPO plans indefinitely in the increasingly crowded mortgage REIT market. The New York-based firm sought to price 20 million shares at $20 and raise $400 million, Co-Star Group reports.
Ladder Capital is among five mortgage REIT offerings to stumble out of the gate over the last two weeks. Crexus Investment Corp. cut its IPO price by 60% on Sept. 17.
Last week, Colony Financial Inc. and Apollo Commercial Real Estate Finance, which had hoped to raise a combined $900 million to originate, buy and manage commercial real estate first mortgage loans, priced at about half that amount. Foursquare Capital Corp., a REIT backed by money manager AllianceBernstein, postponed its IPO on Sept. 24.
"The cool reception from investors was somewhat surprising given the August IPO of Starwood Property Trust, Inc., managed by prominent investor Barry Sternlicht, which saw its IPO price jump 38%," reports Co-Star. "Private firms rushed forward with their own IPOs and the pool became full very quickly, however."
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