No Picture
General Article

Half of Commercial Mortgages Fail to Refinance

Half of Commercial Mortgages Fail to Refinance

The commercial real estate (CRE) market peaked in 2007, and has since been in a prolonged process of collapse. This is true for asset valuations across property types (residential apartments, office, industrial, self storage, health care, etc.), as evidenced by rising capitalization (cap) rates across the board.

Cap rates are to real estate what P/E ratios are to stocks; they measure the value investors are willing to attribute to each dollar of net operating cash flow generated from the property. In other words, cap rates can be computed by dividing the net operating income (NOI) by the value, or amount that an investor paid for a property.

Rising cap rates means that investors are demanding higher risk premiums on their commercial real estate investments. The going rate for high quality CRE is about 7 percentage points above the 10-year Treasury bond, or equivalent maturity “risk-free rate.”

In a continuation of the CRE saga, Bank of America announced that over half of commercial mortgages have been unable to refinance as notes reach maturity.

Nearly $1.24 trillion of commercial mortgages need to be refinanced over the next four years. With so much debt outstanding and in need of refinancing, the BofA announcement makes a bad situation worse.

Between 50 percent and 60 percent of loans on skyscrapers, hotels, shopping malls and apartment complexes failed to refinance within a few months of their maturity date this year, Bank of America Merrill Lynch analysts said in a report.

As a comparison what went on during the boom years, we should note that a record of $251.1 billion in bonds tied to commercial mortgages were issued in 2007 compared to $1.7 billion issued so far in 2010.

Commercial real estate firms are increasingly desperate. According to Thomson Reuters there are at least 12 CRE firms planning to sell equity in IPOs over the next year. Given that equity sales earlier this year have either completely failed to materialize, or have been executed at deep discounts, it is not likely that CRE firms will be able to re-capitalize properties that have decreasingly profitable operating margins.

Without a big government bailout, the 41 percent CRE decline since 2007 might just be the start of something much worse.…

No Picture
General Article

Commercial Finance – Tips on Where to Look

Commercial Finance – Tips on Where to Look

When looking for funding to start a business or to expand an existing one, you can look at commercial finance as an option. There are many lenders that are available to help you get a loan that suits your needs. It is an easy and convenient way for you to raise capital, purchase equipment, buy land or relocate your business. These lenders will provide you with a loan that is tailor-made for you even if your credit score is bad.

There are specific requirements that they look for before they can extend you the loan. They will need to take a look at your business plan so that they are in a position to access your strategies and if you will be in a position to repay the money. The size of the business is another factor that they consider so that they are able to gauge the amount you actually need if you have exaggerated or underestimated.

There are many advantages of getting loans from commercial finance lenders. You do not need any proof of income and the loans are approved no matter your credit score. It is also approved quickly and they’re flexible repayment terms. The criteria used to approve this type of loan is different since it usually involves a large sum of money.

If you want to hasten the approval process, you will have to show three years financial statements, a business plan and a few of the most recent tax returns. However, this varies from one lender to the other. You can also access loans online and you will need to provide the required documents. If you are in financial difficulty, a commercial finance loan can help you avoid bankruptcy and re-establish stability.…

No Picture
General Article

Hollywood Movies – Why Some Fail at the Box Office

Hollywood Movies – Why Some Fail at the Box Office

For decades Hollywood has been making movies of different genres. One such genre is sex and violence. But do these movies do really well at the box office or are they really appreciated by people around the globe? Well some admire them while the majority discards them if they fail to relate with the characters.

Hot and sensuous contents are part of the Hollywood movies which pulls the crowd to the theaters. Characters make a sizzling entry during a scene which tunes a person’s mood and takes them to a different world. But scenes like these do not make the Hollywood movies to break box office records.

Of course, we do get tempted by such sizzling scenes so do our children. Movies should be based on strong script, a good story lineup and a unique form of screenplay. These are the elements that make the movies to reach the stardom.

Though there are certain movies that had such disturbing scenes, yet they have managed to break the box office jinx and won numerous awards. It is because the people have liked them.

Titanic, The Graduate, The Reader and many more such movies that bagged Oscar, Golden Globe and the BAFTA awards and became the people’s choice. Whereas movies like “Basic Instinct”, “Species”, “Cool Surface” and many more such movies that contained such adulterous scenes failed miserably at the box office. These movies really run out from the story and showcase much on the intimate scenes which needs parental advice when watched at home.

Movies are meant to entertain viewers and should manage to pull a huge number a crowd to the theater. But, contains like this fail miserably at the box office which drives the movies out from the theaters within a week. Movies should be made for everyone including the kids, but adulterous scenes are triggered by the letter “A” which excludes children from getting into the theaters.

We all know about such movies, but it is better to make a romantic movie such as “Gone with the Wind” and “Titanic” than to make movie that have intimate scenes. Sometimes such movies tend to show certain unexpected scenes which might disturb our sentiments.

Before the release of an adult movie, the censor board takes a thorough checking on such movies and passes it with an “A” grade. The movies hit the theater and with the alphabet printed on the poster, people come to know about the quality and it’s contain. This is why censor board plays a crucial role while approving any kind of the movie before its release.

Though editors play a crucial role in editing contains of the movie, yet censor board plays its role to give out the final approval before the release. The censorship panel takes a firm look of the movie and the juries decide over the scenes, which part must be deleted and which one should be in the movie.

Though censor board enacts its role while editing certain scenes, still movie makers like to make such bold movies that contain certain disturbing scenes. Maybe certain groups of people enjoy such movies but majority of them consider it to be a time killing performance.…

No Picture
General Article

Why Your Credit Score is Important in Buying a New Car

Why Your Credit Score is Important in Buying a New Car

Every morning when you go out to start your work-dependent car do you have problems just getting it to idle? Have repair shops told you a figure that was more than you make in a month? Have you lost a job because your vehicle wasn’t depedable enough, but you have no room in your budget to get it fixed? You want to get a new car so badly, but dealerships push you away because of your previous payment history. If these things are so, then this article is perfect for you.

There is one very important thing that car dealerships look at when they decide whether or not to give you an auto loan for a new car, your credit report. If you don’t have a great credit score, then don’t even waste your time applying for a loan because you will immediately get shut down and rejected, Your next question is, “How can I get a new car if I am up to my eyes in debt and haven’t had a good credit score in ten years!” The answer is very simple, you get a credit repair. After this is done, this gives you the opportunity to get a loan and improve your life by getting a car that you can actually hold a job with because it is dependable. And, looking five years into the future, because you can actually depend on your car you can actually hold a job now. And, since you can hold a job you can actually have a reliable source of income because you don’t have to worry about losing your job every day. And, since you can actually have a reliable source of income you can start thinking about saving money for the future. And just think, all of this was made possible because you made the valuable investment of a credit repair.…

No Picture
General Article

Is the Recession Over? Green Shoots Or Just Weeds?

Is the Recession Over? Green Shoots Or Just Weeds?

As of this writing, the market as measured by the S+P 500 is down slightly for 2009. However, that is after plunging like a rock in January and February and then recovering aggressively in March and April. As so often happens after a good market run, optimism and the search for “green shoots”, or signs of economic recovery is at the forefront of everyone’s mind. Where investors wanted aggressively “out” of the markets in the first few months of the year, many now aggressively want “in”. It is always a good idea to decrease the level of emotionalism when investing or making economic decisions, so let’s do that. For those of you that know me, you know this is when I start breaking out the charts! Here goes…

First of all we need to consider where we are right now and where we’ve come from. The bear market we are in started in about October, 2007. That makes this bear market about 18 months old. The average bear market over the last 100 years has lasted about 18 months, so maybe that’s good news. Let’s look at some numbers to see:

I could add chart after chart after chart that illustrates the historic and extreme nature of what is happening from historic levels of foreclosures to historic levels of revenue and profit declines in the S+P 500 and everything in between. My point is simply that if all the economic metrics are extreme, it is only logical to expect that the market reaction will be the same. If the average bear market lasts 18 months, then it is logical to expect this one to last at least a bit longer than the “average”.

Bear markets play out in a combination of time and price. They can last a very long time and just go down a little bit month after month which will eventually wear out all but the most intrepid. Or they can drop fast and furious in an attempt to scare out all the weak holders. We have had a pretty dramatic drop in price, so it is possible that the “price” parameter has been met. If so, the bottom we saw in March will turn out to be “the bottom”. That would be great, but we still have to be cautious since the “time ” parameter may still have some work to do and objective measures of the market (like where it is trading relative to the 200 day moving average) have not switched to “Bull Market” mode yet.

On the other hand, it never pays to get too bearish over the long run and we’ve already seen a big drop in the indexes. While last year may have resembled a steep roller coaster ride drop, it is more likely that the next phase will look more like the edge of a saw, with moves up over several months that make people too bullish and confident and then waves down that make them think the “big drop” is coming yet again. It may be time for the market to try to wear people out by going up and down for a while. Most people will just get tired and give up, unless they have the right game plan.

Of course, we do not trade on these concepts and we recommend you do not either. However, it is important to establish an overall game plan so that you can filter out the emotionalism of the last month’s either up or down performance. Determine what your expectations are and your risk tolerance and then position yourself accordingly. But for us, caution is the call of the day until we get more objective clarity that the extreme metrics have had time to work themselves out and begin to show some signs of bottoming and/or improvement.

Please feel free to forward our commentaries (with proper attribution) to others who may be interested.…

No Picture
General Article

Celebrity Divorce Settlements – What Do They Tell Us About Divorce Law For the Rest of Us?

Celebrity Divorce Settlements – What Do They Tell Us About Divorce Law For the Rest of Us?

As negotiations in Mel Gibson’s divorce settlement near a conclusion, rumours abound that he will have to pay one of the largest divorce settlements in history. His wife of 28 years, Robyn, is expected to walk away with a sizable chunk of his estimated $1 billion wealth.

Their settlement is likely to top the list of all time celebrity divorce settlements, currently headed by basketball legend Michael Jordan. The current top 3, according to Forbes magazine, are:

3. Steven Spielberg paid his wife of 4 years, Amy Irving, $100 million even though they had a pre-nuptial agreement in place. This was way back in 1989.

2. Neil Diamond spent 27 years with his wife Marcia before she left with $150 million.

1. NBA superstar Michael Jordan had to pay out $168 million to his wife of 18 years, Juanita, in 2007.

The fact that all of the above are men who have been exceptional in their field of work, and therefore earned a lot of money, is an important point to consider when examining divorce settlements on a smaller scale. Although the cases above are US based, the law in England is not too dissimilar to bear closer examination.

There is a misconception amongst some women that because they may not have worked, for example whilst raising children, or have worked and earned much less than their husband, that they are not entitled to anything from his business or the money that he has earned.

This is not the case. Under English divorce law the role of homemaker is judged to be no less important than the role of breadwinner. In practice this means that a spouse is likely to be entitled to a share of the assets of the marriage, which include any business, even if they had no direct involvement in the creation of that wealth.

When the Courts look at a divorce settlement, the starting point is a 50/50 split. Many factors are then taken into account, including the length of the marriage, the needs of any children and the current earnings of both parties as well as their respective future earnings capacity. Importantly, the contributions that both parties have made to the marriage, financial and otherwise (such as looking after the house or caring for children) are also included.

Even if the husband has been exceptional in his field and therefore earned a lot of money (what we call a ‘stellar’ contribution), the spouse may still be entitled to a significant portion of the marital wealth.…

No Picture
General Article

Freedom From Debt

Freedom From Debt

” road to debt freedom begins with a single step.”

Welcome and hello!

This article was written to inspire you to take control of your financial life. You’re going to discover what you spend our money on, you’re going to organize your spending so you have control, and you’re going to eliminate unnecessary spending and focus on necessities and that which brings you joy in life. This is a life-changing thing you’re doing – you won’t be the same person you were in the beginning. You’re on a quest to find your financial self – powerful, self-reliant, and in control.

Financial management is something every person old enough to have money should practice. Do it consciously and you’ll be free of a major source of life’s stress (and stress will kill everything it touches – your relationships, your happiness, your health – even you).

The good news is it’s a very, very easy thing to do. The bad news is you have to change your habits (and most of us do not like to change our habits – they may be unhealthy, but they’re ours and they’re comfortable). Learning new habits takes each of us varying amounts of time (no rush – you have the rest of your life).

The key is to do something every day (doesn’t have to take long – maybe 5-15 minutes). What this does is get you thinking about taking control of your finances every day, which will lead to becoming financially conscious. You’ll feel good about yourself for finally taking control. Your mood will improve, and your stress level will diminish. This isn’t a quick fix – it’s a conscious choice for a lifestyle change. You’ll replace a bad habit with a good habit. You will have done it! What’s really cool is you can apply these same skills to any area of your life.

Do This First: Take the first step today. Start keeping track of every item you spend money on. For example, if you buy coffee on your way to work, list “6/5/10 – coffee – $3.” It’ll make you conscious of spending money – and it’ll change your life.…