Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Feb 24 1992 Date: Mon, 24 Feb 92 06:25:44 EST Message-ID: DECISIONLINE: Real Estate USA TODAY Update Feb. 24, 1992 Source: USA TODAY:Gannett National Information Network SPACE GLUT HURTS DEVELOPERS: A glut of office space has pushed down rents. Developers don't have the revenue they need to repay loans. And, says FDIC Chairman William Taylor, "Most of those loans are in the larger banks." The number of banks on the FDIC problem list is down: 1,071 on Jan. 31 from 1,559 in 1987. But assets of banks on the list has nearly doubled in five years, to $613 billion from $350 billion. FDIC CHAIRMAN `CAUTIOUS': The outlook appears to be improving for the USA's banks, but FDIC Chairman William Taylor says he would "be pretty cautious." He admits that "the numbers at year end don't look as bad as most people thought they would." And fourth-quarter earnings reports seem to show that problem loans are not piling up as fast as they used to. But commercial real estate still is the top concern. SPACE GLUT HURTS DEVELOPERS: A glut of office space has pushed down rents. Developers don't have the revenue they need to repay loans. And, says FDIC Chairman William Taylor, "Most of those loans are in the larger banks." The number of banks on the FDIC problem list is down: 1,071 on Jan. 31 from 1,559 in 1987. But assets of banks on the list has nearly doubled in five years, to $613 billion from $350 billion. FDIC NURSES CROSSLAND SAVINGS: The FDIC is nursing ailing CrossLand Savings in Brooklyn. Brought down by bad loans on New York condos and cooperatives, the bank was seized last month by federal regulators. Usually in such a case the FDIC sells deposits and some assets to healthy banks. Or it liquidates the bank. But the FDIC says taking over the bank, making it healthier and selling it is the most cost-efficient plan. JAPANESE INVESTMENT LOW: Japanese investment was held to only $5 billion in U.S. real estate last year, the lowest level since 1985, according to a recent study by Kenneth Leventhal & Company. Behind the drop: Japanese government lending restrictions, dropping stock values and a weak U.S. market. Dale Anne Reiss of Leventhal says investment likely won't ever again reach the 1988 level of $16 billion. COMMERCIAL RECOVERY HOPES DIM: The much-awaited recovery in commercial real estate is acting like a mirage. Last year, when the Arthur Andersen accounting firm asked a group of real-estate executives to predict the turnaround, 63% said it would be in three years or less. This year, 50% of those questioned in the latest survey say recovery will have to wait for another three to five years; 20%, more than five years. FAMILY ROOM IS TOP PROJECT: Home-remodeling expenditures are expected to reach $119 billion this year. A National Association of Home Builders survey finds that the most popular project is building a family room, at average costs of $19,902. Other top projects: Kitchen renovation, $17,592; bathroom addition, $11,592; bathroom renovation, $9,449; and replacing or adding a deck or patio, $4,437. VANGUARD ANNOUNCES DEFAULTS: Vanguard Real Estate Fund II Friday announced defaults on periodic interest payments by two borrowers of the fund's mortgage investments. The Pennsylvania-based fund said it has learned the Sequoia Commerce Center has filed for Chapter 11 protection. But it said it intends to "vigorously pursue its rights" regarding its investment in the Raleigh Building in Chicago. FIXED-RATE MORTGAGES RISE AGAIN: Fixed mortgage rates rose last week to their highest level in four months, the Federal Home Loan Mortgage Corp. said Friday. The average rate for 30-year fixed-rate mortgages climbed to 8.82% from 8.73% a week earlier. Rates were 9.25% a year ago. Rates have been rising since Jan. 10 (8.23%). One-year adjustable-rate mortgages rose to 5.92% from 5.78% a week earlier. A year ago: 7.59%. VA HIKES MORTGAGE RATES: The Department of Veterans Affairs Friday said it is raising interest rates on VA mortgages to 8.5% from 8%. That change is effective Monday. That reverses a drop on Dec. 20 that put the VA rate at its lowest in 14 years. LAND ACCESS TO BE REVIEWED: Montana's Land Board on Monday will review proposed changes in regulations that grant public access to 5.2 million acres of state land. Most of the land is leased by ranchers for their livestock to graze. GOODWILL WRITEDOWN ANNOUNCED: Grubb & Ellis Co. Friday announced that in the fourth quarter of 1991 it has taken a special charge for an accelerated writedown of a substantial portion of its goodwill. Total goodwill at the end of 1990 was over $61 million. The company believes that the recession and weak markets have hurt the long-term realizable value of its assets' goodwill and has written it down by $29.5 million. BRADLEY DECLARES DIVIDEND: Bradley Real Estate trustees have declared a quarterly dividend of $.15 per share payable on March 25 to shareholders of record March 2. The trustees also said the annual shareholders' meeting will be held on May 18 in Boston and that shareholders of record on March 31 may vote. The real estate investment trust is involved with established income-producing commercial real estate. Real Estate: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 08:0002240000D0224 SPOR- R Q Olympics-come-to-close................ A D0224 This article is copyright 1992 Gannett News Service. 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