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  • saltynacho saltynacho Jun 3, 2008 2:43 PM Flag

    commerical real estate one tought cookie

    FYI........ Buried below in todays' WSJ article
    "saddled with billions of dollars in hard-to-sell commercial real-estate assets and leveraged loans"
    WSJ - June 3, 2008

    The Wall Street Journal is reporting that Lehman Brothers, the smallest independent Wall Street firm still around after Bear Stearns collapse, will soon report its first quarterly loss since the firm went public and is looking at ways to raise perhaps $3 billion to $4 billion in new capital to strengthen its balance sheet. Lehman was the subject of apparently unfounded credibility doubts right after Bear Stearns was bailed out and essentially sold, and Lehman executives continue to say the firm's in good shape to handle the credit-market uncertainty. It has also already raised $6 billion in the past year, and has access to the Federal Reserve's new borrowing facilities for investment banks, as the Journal notes. "Nonetheless, some investors remain concerned that relative to its size, Lehman is holding more securities tied to both residential and commercial real estate than any other big Wall Street broker," the Journal says, citing Bernstein Research.

    Yesterday, Standard & Poor's said it had lost some confidence in the ability of Lehman, Merrill Lynch and Morgan Stanley to meet their financial obligations, a change of heart that knocked 8.1% off Lehman's share price, 3% off Merrill's and 2.6% off Morgan Stanley's, the New York Times notes. But Lehman seems to be hurting the most among the three. The Journal says Lehman would probably announce the new capital infusion the week after next, when it is scheduled to report its quarterly results, and that its "fresh difficulties" will include the consequences of being

    "saddled with billions of dollars in hard-to-sell commercial real-estate assets and leveraged loans"

    as well as "further write-downs on these portfolios.".................


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    • luckily cashflows on all SPG-owned properties are a snap to maintain and even enhance, because of their high-end nature. Simply kick out any delinquent tenants and get new ones at higher rents. Ie, the worse the economy gets, the better it is for SPG!

      - k

      • 1 Reply to kevattaya
      • salty and kev
        the stock price sets at 99, have hoover around here for quite awhile. there must be some investors that can't read the same signs you guys do.
        all these commericial properties and yet the highest price EVER sold two weeks ago
        why don't you mail Boston Properties , the same articles you're reading .

        Apparently they 've been so busy buying properties they havn't realize that all that profit they're showing is play money.
        trash man

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