Stacy Summary: I’ve noticed loads of property related headlines today. Might have something to do with the imploding bond market and the meltdown in REITS
- REITs Deepening Bond Losses as Leverage Forces Sales (SH: if you only read one headline, make it this; good explainer on why mortgage rates are soaring in the US)
- Miami Tops U.S. Foreclosures as Banks Selling in Boom
- Vulture Investors Frustrated in Dublin Weigh Irish Exit (SH: Wow, this is bad for an economy in the grips of deflation: “International investors bought about 70 percent of the 545 million euros of income-producing property sold in Ireland last year.”)
U.S. firms including Kennedy-Wilson and Northwood Investors LLC, started by former Blackstone Group LP executive John Kukral, came to Ireland expecting to pick up cheap real estate or loans that went sour when the country’s property market collapsed in 2007. While they’ve had some success, investments are being limited as Royal Bank of Scotland Group Plc (RBS), the National Asset Management Agency and other large owners of buildings and loans hold onto assets amid a recovery in central Dublin, restricting supply and causing investors to consider European alternatives.
“If investors are finding they’re consistently failing to secure investments, they will reach a stage where they’re not prepared to spend any more time or money on this market and move elsewhere,” said John Bruder, chief executive officer of Burlington Real Estate Ltd., which manages Irish real estate valued at more than 1 billion euros. The buyers “are very footloose and would think nothing of shifting from Ireland to the Mediterranean countries, Eastern Europe or further afield.”