tishman article

at some point theres going to be some monster defaults that crack the RE market open and then we'll start to find a bottom Tishman Seeks Buyer for Five California Buildings (Update1) 2009-05-20 20:24:33.614 GMT (Adds comment in fourth paragraph.) By Brian Louis May 20 (Bloomberg) -- Tishman Speyer Properties LP, the real estate developer that owns Rockefeller Center, is seeking a buyer for five... [more]

at some point theres going to be some monster defaults that crack the RE market open and then we'll start to find a bottom Tishman Seeks Buyer for Five California Buildings (Update1) 2009-05-20 20:24:33.614 GMT (Adds comment in fourth paragraph.) By Brian Louis May 20 (Bloomberg) -- Tishman Speyer Properties LP, the real estate developer that owns Rockefeller Center, is seeking a buyer for five California office buildings at a time when values have fallen 30 percent in the past two years. Three of the buildings are in Beverly Hills and one each are in San Francisco and Orange County, according to a statement today from the Tishman Speyer Office Fund, a Sydney, Australia- based property trust with an interest in 18 U.S. buildings. The fund is seeking to bolster its balance sheet as Tishman Speyer in the U.S. is facing headwinds. Standard & Poor’s Ratings Services this week downgraded the debt on a Washington area properties held by a Tishman Speyer partnership, citing “high leverage” and “declining asset values” in cutting the debt to CCC from BB+. Commercial real estate prices are down almost 23 percent from their October 2007 highs and transactions have plunged as much as 80 percent, according to the Moody’s/REAL Commercial Property Price Indices issued yesterday. “They’re marketing into significant headwinds, which are caused by poor credit availability, falling rents and rising vacancies in the office sector nationwide,” said Peter Slatin, editorial director of Real Capital Analytics Inc., a New York- based firm that tracks commercial property sales. Buying With Debt Tishman Speyer and real estate investors including bankrupt General Growth Properties Inc. and Manhattan landlord Harry Macklowe added billions of dollars debt during the commercial property boom that peaked in 2007. Property owners are now having trouble refinancing and paying back lenders as building values tumble and banks restrict credit. The Tishman fund’s California sales are “being considered as part of TSO’s capital management initiatives,” the fund said in a statement today. Tishman is selling 3 MacArthur Place, a 246,800-square foot office building in Orange County, California; 550 Terry Francois Blvd., in San Francisco’s Mission Bay district, a six-story 282,773-square-foot office building with a book value of $170.5 million, according to the fund’s Web site. Maple Plaza in Beverly Hills, a three-story, 300,000-square-foot office building valued at $180 million is also for sale, as is 407 N. Maple in Beverly Hills, valued at $96 million. It’s a four-story office building of 165,000 square feet. The last building being marketed is Beverly Mercedes Place in Beverly Hills, a 130,000-square-foot building valued at $68 million, according to the Web site. Stuyvesant Town Since 2006, real estate purchases by Tishman Speyer, its partners and affiliates have included the 80-acre Stuyvesant Town-Peter Cooper Village apartment complex in Manhattan for $5.4 billion and a deal between Tishman and Lehman Brothers Holdings Inc. to buy the real estate investment trust Archstone- Smith Trust for $13.6 billion in October 2007. Tishman Speyer paid $2.8 billion for the Washington portfolio previously held by Blackstone Group, according to a 2006 statement from Standard & Poor’s. The downgrade this week affected $570 million of debt, Standard & Poor’s said in a statement May 18. Tishman bought the Beverly Hills buildings for $333 million in 2007, according to the site. Those buildings combined are valued at $344 million. A telephone message left for David Augarten, chief executive officer of Tishman Speyer Australia Ltd., and an e- mail message, were not returned. Rick Matthews, an outside spokesman for Tishman Speyer in New York, said the company would not comment beyond the Australian statement. The Tishman fund fell 2 cents to 20.5 cents, Australian, today on the Australian Stock Exchange. The fund fell 87 percent over the past 12 months. “Management is intensely focused on the liquidity challenges that TSO is facing,” Augarten said in a February statement announcing the fund’s six months results ended Dec. 31. The fund reported a loss of A$223.1 million in the period. For Related News and Information: Real estate investment trust industry: NI REIT Most-read REIT stories: TNI REIT READ Stories on U.S. real estate: TNI US REL Top Bloomberg News real estate stories: TOPR For U.S. housing and mortgage data: HSST --Editors: Sharon L. Lynch, Rick Levinson To contact the reporter on this story: Brian Louis in Chicago at +1-312-443-5920 or blouis1@bloomberg.net. To contact the editor responsible for this story: Alan Mirabella at 1-212-617-4149 or amirabella@bloomberg.net. [less]