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Posts Tagged ‘Arnold Schwarzenegger’
BUILDINGS ON THE BLOCK IN SACRAMENTO
Thursday, September 24th, 2009California selling buildings worth $2 billion to raise cash
Thursday, September 24th, 2009
As the California economy roared in the 1990s and tax revenues poured into a treasury overseen by Gov. Pete Wilson, the state laid plans for a series of new office buildings in Sacramento to spare itself from paying rent to other landlords.
Barely a decade later, the Schwarzenegger administration is launching a process to sell many of the same buildings that were originally touted as long-term money savers for taxpayers. The goal today is more immediate: pay off debt and steer cash into the state’s depleted general fund. It’s among a variety of short-term crisis solutions that include selling surplus state property, moves also being undertaken in cash-strapped Arizona.
In California, 11 state-owned sites with an estimated value of almost $2 billion will be listed for sale in early 2010 to pay off about $1.4 billion in bonds and net another $600 million “to support other critical state government programs,” said state Department of General Services spokesman Eric Lamoureux.
The state wouldn’t move out of the buildings; it would continue to lease them from the new owners.
The sell-off has lit up the skies for brokers in an otherwise downcast office real estate sector, where few buildings are being bought, sold or even listed, especially in Sacramento. It’s likewise called fresh attention to the state’s battered finances and stirred banter about whether it’s smart to sell long-term real estate assets for short-term goals in a weak market.
Many in the real estate industry acknowledge it’s a close call, but believe “beautiful class A” state buildings with a single tenant will command premium prices.
“It’s unfortunate they would sell them. But they definitely have a need for financing right now, for equity to solve this budget crisis,” said Tom Aguer, president of Sacramento-based commercial real estate brokers Aguer Havelock Associates. “It’s a very creative way for them to fix their problem. But in the long term, these are great assets.”
Brokers like Aguer and others among the nation’s leading real estate firms are already assembling proposals and lining up national teams to broker the sales. The state is demanding an experienced partner: a firm that has done five separate deals of $20 million or more in the past seven years, and at least $150 million in total deals in that span.
No one can calculate for certain the fees such a deal could bring a brokerage firm. But it’s widely said in the industry that the higher the price, the lower the commission. Even a commission as low as one-quarter of 1 percent of almost $2 billion in sales could net a firm nearly $5 million.
Specifically, the state is proposing a so-called “sale/leaseback” deal in which buyers of state buildings would rent them to the state afterward.
“We intend to maintain 100 percent occupancy in the buildings just as we have today,” said Lamoureux, whose department manages state buildings. “We’re just looking to sell the property and lease back over an extended term, probably along the line of 20 years or so.”
Brokers say the lease-back provision is likely to stir interest among risk-averse investors known in the trade as “coupon clippers.” Those are big institutional investors such as pension funds and insurance companies.
“There are numerous buyers looking for single-tenant buildings with the long-term leases. It’s a steady income. It’s a low-risk deal,” said Nico Coulouras, vice president in Sacramento for Lowe Enterprises, a Los Angeles-based development and investment firm.
Among the state complexes proposed for sale are some of Sacramento’s biggest buildings and most distinctive landmarks: downtown’s massive East End Complex next to Capitol Park, finished in 2003; the 17-story Attorney General Building on I Street, completed in 1995; and the sprawling 1.8 million-square-foot campus of the Franchise Tax Board, expanded earlier this decade at the city’s eastern edge.
Elsewhere, fixtures of the Oakland, San Francisco and Los Angeles skylines – bearing names of politicians from Ronald Reagan to Hiram Johnson – will also be sold.
Was the State Capital really SOLD!!!!!
Monday, September 21st, 2009
Schwarzenegger Wants ACORN Investigated
Thursday, September 17th, 2009SACRAMENTO, Calif. — Raising the stakes involved in the scandal surrounding the anti-poverty group ACORN, Gov. Arnold Schwarzenegger is urging a “full investigation” by California Attorney General Jerry Brown into ACORN’s California activities.
The governor sent a letter Wednesday to Brown, referring to “news stories regarding the ACORN organization that have concerned me greatly.”
ACORN stands for the Association of Community Organizations for Reform Now. The group has come under fire after employees were caught on tape giving tax advice to conservative operatives posing as prostitutes and pimps.
The most recent video surfaced this week in San Bernardino and has been used extensively by Fox News and conservative Web sites.
“You can hear on the tape, the ACORN worker offering advice as to how to lie, how to claim that the house is a business, not a brothel,” KTKZ talk show host Eric Hogue said Wednesday on his radio broadcast in Sacramento.
Callers weighed in, one saying, “It just makes me sick.”
At ACORN’s Sacramento offices on Florin Road, a worker who answered the door said she couldn’t answer questions. Ronald Coleman, ACORN’s legislative director in Sacramento, later confirmed that tax and mortgage services were being suspended for now.
“This is not how we should handle ourselves. We need to take this time to re-evaluate,” Coleman said.
Bertha Lewis, ACORN’s chief executive officer, called the action of the workers in the video “indefensible” and said an independent review would be launched.
It’s unclear just how much federal money goes to ACORN in California. The state Department of Housing and Community development said it had no records of any state grants being awarded to ACORN.
The Sacramento ACORN office’s budget is $300,000, according to state field director Christina Livingston. Many of those funds come from membership and fundraising, she said.
Outside the Sacramento office, Ruby Bradley said she was highly skeptical of the organization. She said she once applied for help with a housing loan with ACORN, but never got a response.
“I think it was poor business,” Bradley said.
That complaint was echoed by Demario Anthony of Sacramento, who said his aunt’s application was ignored.
“She stopped dealing with them,” Anthony said. “We asked what happened, and she said she didn’t want to talk about it.”
Mortgage defaults spread as even ’safe’ borrowers falter
Monday, July 13th, 2009The mortgage default crisis has an ominous new face. It’s your neighbor with a traditional fixed-rate loan.
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners’ faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.
With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they’re seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento’s economy.
I think the tide has definitely shifted, w’re seeing more people with a loss of income.
Prime fixed-rate mortgages, with the most favorable interest rates and 15-, 20- or 30-year terms that guarantee the same monthly payment for the life of the loan, have long been the bulwark of American homeownership.
There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter, according to the Mortgage Bankers Association. That number was less than 1 percent two years ago, when the default crisis was dominated by subprime loans.
The MBA says layoffs are now hitting more educated borrowers.
“There tends to be a higher correlation there with having a fixed-rate mortgage,” said Jay Brinkmann, chief economist of the lender trade group.
It’s not just the layoffs creating trouble for traditionally safe loans. Many area workers have had to absorb wage cuts. Others who lost jobs have found new jobs that pay less. Or they have found only part-time work. Many workers who depend on overtime pay have also seen it disappear or dwindle.
Finally, in a capital region defined by a massive state government work force, furloughs have grown to three days monthly, approximating a 14 percent salary cut. Gov. Arnold Schwarzenegger is proposing still more pay cuts for an educated population that’s increasingly showing up at nonprofit mortgage counseling centers.
The upheaval has had a ripple effect on small-business owners throughout the Sacramento area. Theses business owners need some breathing room to get back into the business and start making profits again.
As the newest turn in a housing crisis that has seen 40,000 area foreclosures and heartbreak in thousands of other homes, trouble for prime borrowers is one more obstacle to a housing recovery any time soon.
Lending-industry officials say it’s harder to restructure loans for jobless people who can barely afford any payment. Worse, economists say rising defaults and the foreclosures to come among these borrowers are likely to persist long after unemployment peaks sometime next year.
“Foreclosures and delinquencies have a long tail, and we will see that continue for several quarters after a turnaround in unemployment,” said the MBA’s Brinkmann.
Forecasters at Stockton’s University of the Pacific predict unemployment in the capital region will peak late next year at 12.3 percent – and remain in double digits through 2011. If so, problems with prime loans are likely to linger in a region having a hard time catching a break.
So….What does all of this mean to the average cicizen who owns a home??? We will have alot more forclosures coming on the market and the price range will be much larger then what we have been seeing.
