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Wednesday, June 20, 2012

Pacific Business News - Island of Lanai for sale

Will Bill Gates or Larry Ellison buy Hawaiian island of Lanai?

Pacific Business News by Duane Shimogawa, Reporter
Date: Monday, June 18, 2012, 1:34pm HST - Last Modified: Tuesday, June 19, 2012, 9:56am HST

Word spread fast after PBN broke the story last Friday confirming the widely spread rumor that Los Angeles billionaire David Murdock is trying to sell the island of Lanai.

Now, Maui County Mayor Alan Arakawa is telling PBN that there’s a good chance that Lanai might be sold relatively quickly. Word of the sale could come out in about a week or so.

“At this point, there seems to be a serious inquiry, [but] the due diligence must be done — a lot of paperwork must be satisfied,” he said.

The listing price for the island is not being publicly disclosed, but one expert who sells islands for a living told PBN that its price is probably more than $500 million.

Arakawa said he had a discussion with representatives from Castle & Cooke Hawaii Inc. over the weekend and, in that discussion, “someone” was identified as being interesting in purchasing Lanai, although he declined to give any names.

Meantime, Gov. Neil Abercrombie told PBN through his spokeswoman, Donalyn Dela Cruz, that he met with Castle & Cooke representatives Thursday afternoon, and they informed him that they have started discussions with a potential buyer for Lanai.

Dela Cruz said Monday that the governor has no other information at this time.

Lanai, the sixth-largest Hawaiian island by acreage, is owned by Murdock, who in 1985 took control of it as a result of his purchase of Castle & Cooke. The state owns 2 percent of the island.

Rumors have been spreading for some time now that two prominent American businessmen, Larry Ellison, co-founder/CEO of Oracle Corp., and Bill Gates of Microsoft-fame may be likely candidates to buy Lanai.

Gates and his wife, Melinda, rented out the entire island for their marriage in 1994, and Ellison has a home on Lanai.

Calls to Oracle’s corporate offices weren’t immediately returned.

A call and email to Gates’ Bill and Melinda Gates Foundation requesting comment weren’t immediately returned.


Posted by Trevor Benn on June 20, 2012 at 09:28 AM
Real Estate News • (45) CommentsPermalink

Wednesday, June 13, 2012

Bloomberg - Hualalai Loan in trouble…

Four Seasons Hualalai Hotel Loan Sent to Special Servicer - Bloomberg

By Nadja Brandt - Jun 12, 2012 11:26 AM GMT-1000

A loan on the luxury Four Seasons Resort Hualalai, a joint venture of Rockpoint Group LLC and Michael Dell’s MSD Capital LP, was transferred to a special servicer because of maturity default, Fitch Ratings said.

The loan has a balance of $175.9 million, Fitch said today. Rockpoint and MSD, the investment firm started by the Dell Inc. (DELL) founder and his family, bought the property in June 2006 for $503.7 million, according to Scott Pritchard, a director for structured finance at Fitch.

Special servicers negotiate with landlords on behalf of investors in commercial mortgage-backed securities. The resort’s owners are in talks with lenders and seeking a later maturity. The fourth and last extension on the loan expired on June 9, according to Fitch.

The borrowers “will continue to make interest payments on the mortgage during the discussions with lenders,” Patrick Fitzgerald, chief executive officer of the resort, said in an e- mailed statement. “We are confident that the discussions will lead to a multiyear extension of the maturity date.”

A tsunami triggered by the 9.0-magnitude earthquake in eastern Japan caused more than $10 million of damage to the hotel on March 11, 2011, primarily to landscaping. Losses from tsunami disruptions probably will be covered by insurance, Fitch said in its note. The 243-room, five-star property, on Hawaii’s Big Island, has a golf course, two outdoor swimming pools and three tennis courts, according to Fitch.

The original balance of the interest-only, floating-rate loan on the resort was $354.4 million, Pritchard said.

Occupancies at U.S. luxury hotels climbed to 72 percent this year through April from 70 percent a year earlier, according to Smith Travel Research, based in Hendersonville, Tennessee. That’s the highest among the seven lodging categories the firm monitors. On Oahu, the only Hawaiian region Smith Travel tracks, occupancies were 84 percent, the best performance among the top 25 U.S. markets.

To contact the reporter on this story: Nadja Brandt in Los Angeles at .(JavaScript must be enabled to view this email address)

To contact the editor responsible for this story: Kara Wetzel at .(JavaScript must be enabled to view this email address)


Posted by Trevor Benn on June 13, 2012 at 09:22 AM
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Friday, June 08, 2012

FHA to sell bad loans to investors?

Not the best sign.  Today on CNBC, Diana Olick reported about FHA’s plan to sell blocks of non-performing loans…

FHA Turns to Investors as Losses Continue to Rise
By: Diana Olick
CNBC Real Estate Reporter

Faced with a rising number of severely delinquent loans, the Federal Housing Administration is taking a very small program to sell these loans to investors and ramping it way up.

The government’s mortgage insurer came to the rescue of the mortgage market, when credit seized up at the start of the recent housing crash.

It’s market share rose from barely 3 percent to upwards of 40 percent of new originations. Now it is saddled with over 700,000 bad loans, or 9 percent of the residential loans it insures.

“I’m not going to make any future predictions “bailouts”, but we are working hard every day to ensure that we are protecting the taxpayers and the FHA,” said FHA Acting Commissioner Carol Galante.

The initial pilot program was launched in 2010 and sold barely 3000 loans in all of last year. The newly renamed Distressed Asset Stabilization Program, will offer up to 5000 loans per quarter starting this fall. Borrowers must be at least six months behind on their payments for the loan to be eligible.

“If we can sell the mortgage sooner, we have the opportunity to do at least as good in terms of money back to FHA and potentially help the borrower, and the community,” said Galante.

Since the FHA does not own, but insures mortgages, this would be a voluntary choice by the banks, but likely a popular one, as the FHA requires banks to go fully through the costly and time-consuming foreclosure process before handing off the properties to the FHA.

FHA also limits the types of modifications the banks can do. Big banks have already starting selling off some of their non-FHA other mortgages to private investors, like Connecticut-based Carrington Mortgage Holdings.

“If an investor has correctly analyzed and priced the NPL(non-performing loans) pools, and has the people, services and infrastructure in place to work with borrowers and manage the properties, these pools can be a very attractive investment,” says Rick Sharga, a Carrington executive.

Investors in these pools, however, will face restrictions. They cannot foreclose on the property for six months after purchasing the loan, and they must guarantee that at least half the loans would be modified to a reperforming status and held for at least three years. That is designed to prevent immediate “flipping.”

“We have a fairly straightforward approach to how we handle NPL (non-performing loan) pools. We attempt to keep the borrower in the home and keep the property cash flowing. In the long run, that should deliver the best results for our investors,” says Sharga.

Investors are buying the loans at a discount and therefore can make more aggressive modifications than the banks might be willing to do. For the FHA, selling the loans, even at this discount, is stemming at least some of the bleeding simply by getting rid of them more quickly.

“We actually save money because we’re not paying all the cost of holding that mortgage all the way through to foreclosure and managing and maintaining those properties over a long period of time,” said Galante.

The program will offer some national loan pools and some pools in “hardest hit geographies,” according to Galante. Those geographically specific pools will have additional restrictions in terms of how many of those properties could come to market as vacant REO (real estate owned, foreclosed homes).

FHA is not offering up all of its troubled loans for sale, because as the housing market improves, they are able to get increasingly better returns when selling the foreclosed homes it has.

“We’re seeing our recovery dollars go up in some markets,” adds Galante. “We have to have multiple tools.

Questions?  Comments?  .(JavaScript must be enabled to view this email address) And follow me on Twitter @Diana_Olick

© 2012

Posted by Trevor Benn on June 08, 2012 at 08:54 AM
Real Estate News • (83) CommentsPermalink
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