U.K. Commercial Real Estate Returns Drop By Record

U.K. Commercial Real Estate Returns Drop By Record

U.K. commercial real estate returns fell by a record amount last month as higher interest rates and a drop in bank lending pushed prices down, according to Investment Property Databank Ltd., a London-based research firm.

The total return on investments, after taking rental income and growth into account, slumped 3.6 percent in November. That’s twice the size of the last record decline, a 1.8 percent fall in returns in May 1990, IPD said in an e-mailed statement today. The value of shops, offices and warehouses plunged 4 percent in November after a 1.9 percent decline in October.

Four straight monthly falls in property returns have cost investors 1.8 percent of their money this year. Commercial property is set to break its streak of being the only U.K. asset to have made money for investors every year since 1992 as appraisers mark down prices in the wake of the credit squeeze.

“This is a price correction rather than a significant prolonged downturn,” Andrew Jackson, property investment director at Standard Life Plc’s fund unit in Edinburgh said in an interview. The unit oversees 15 billion pounds of real estate assets.

Real estate assistants invaluable in keeping the industry running

Real estate assistants invaluable in keeping the industry running

Murder! Mistreatment! Extravagance!

The case was so sordid that the National Association of Realtors should have sent out an all-states bulletin: We’re not really like this! Last week’s news that Natavia Lowery confessed to bludgeoning her boss, Linda “Realtor to the stars” Stein, with a “yoga stick” painted just the kind of picture of cutthroat real estate culture that makes industry professionals cringe and looky-loos swarm the newsstands.

Stein, a former co-manager to the punk rock group the Ramones, had switched careers midlife to become one of the country’s most high-profile agents. She counted Sting and Steven Spielberg among her clients, Madonna and Elton John among her close friends.

Goldman in $2bn property push

Goldman in $2bn property push

Goldman Sachs has amassed $2bn to use for property investments in Asia, a move likely to intensify competition for assets in fast-growing markets such as China and India.

The bank has been a prominent investor in Japanese property for a decade, but has decided to allocate significant resources to real estate opportunities across the region.

Rival investment banks – Morgan Stanley in particular – have recently stepped up such investments in Asia outside Japan and raised record funds to target fast-growing markets.

Goldman plans to invest across Asia’s real estate asset classes, including direct purchases of buildings, in development opportunities and by taking equity stakes in listed property companies. If invested, the $2bn would – by some measures – triple the bank’s equity committed to Asia.

Japanese real estate stocks rally on US mortgage aid plan, rising office rents

Japanese real estate stocks rally on US mortgage aid plan, rising office rents

Japanese real estate stocks rose in morning trading Friday on hopes that the US government’s rescue plan for struggling homeowners will ultimately improve conditions for real estate investment in Japan.

A rise in office rents in central Tokyo last month also heartened investors by showing brisk corporate demand for office space.

President Bush announced overnight a plan that allows some homeowners facing foreclosure to not only freeze their interest rates for up to five years but also refinance their mortgages.

‘Investors bought back real estate shares, expecting the US subprime bailout plan to restore the health of financial institutions and thereby help improve conditions for real estate investment in Japan,’ said Kazuhiro Takahashi, a manager of equities marketing at Daiwa Securities SMBC.

Too many zeros add up to big problems in Carver County

Too many zeros add up to big problems in Carver County

Eric Mattson was not surprised that the small vacant lot he bought last year near the shores of Lake Waconia was increasing in value.

What shocked him was the $189 million market value the Carver County assessor’s office came up with for the 55- by 80-foot lot, making it the most valuable property in Waconia and possibly the county.

“It was such an obvious mistake,” said Mattson, 41, who was looking at a property tax bill of $2.5 million. “It was over the top. It was very funny.”

But no one is laughing at the assessor’s office, where the problem started. Neither is anyone at the Carver County Board, the city of Waconia or the Waconia School District. Those three entities — which were counting on the $2.5 million in increased property tax collections — now face the daunting task of raising taxes or cutting budgets to make up for the shortfall.

Feds probe real estate deals

Feds probe real estate deals

Federal agents are investigating real estate deals involving Gov. Rod Blagojevich’s wife as part of a three-year corruption probe into allegations of favoritism and fraud within his administration.

Several federal sources familiar with the inquiry confirm that agents are interested in hundreds of thousands of dollars in real estate commissions Patricia Blagojevich has earned in recent years as a real estate broker for political supporters, fundraisers and state contractors.

One real estate agent told the Tribune that FBI agents contacted her in recent weeks with questions about her dealings with Patricia Blagojevich in a $3.2 million sale of a Gold Coast home in 2004. The seller was an investment banker and generous contributor to the governor’s campaign fund who hired the first lady as his second agent on the deal.

It is the latest in a series of real estate deals disclosed by the Tribune in which the governor’s wife received commissions from politically connected clients. Most of those deals involved people seeking favor from the government her husband leads.