How to be a Pussy, by Dana Mattioli

Let me preface this by saying I've never pulled a John Rolfe and sat with two MDs at a cocktail table and pissed into a beer bottle (and on their shoes) at the Christmas Party. But I've also never under-utilized an open bar, and don't plan on putting a halt to my single-barrel lunches.

So on that note, Dana Mattioli at CareerJournal.com lays out a perfect plan on how to lose your man card, burn out faster and stunt your i-banking career growth. Enjoy!

Happy Hour: Meeting up with colleagues is not the same as hanging out with personal friends. Let your co-workers order first, so you can gauge what they are drinking, Mr. Karsh suggests. Don't follow the lead if the drink of choice is beyond your normal alcohol tolerance. "If everyone is ordering iced tea, don't order a Long Island iced tea," he says.

And this, on how to blow an interview:

Avoid drinking during an interview over a meal. Candidates need to be on top of their game. If the interviewer offers, politely decline, even if your host indulges.

Moody's: "Conduit Loan Underwriting Continues to Slide - Credit Enhancement Increase Likely"

According to CRE/IPG, Moody's will start increasing subordination levels for CMBS transactions shortly.

This comes on the heels of Fitch stating last week that aggressive CMBS underwriting will lead to more defaults, drawing some parallels between current aggressive lending in the commercial sector with the ongoing subprime fallout (which I thought I linked here last week, but I guess not).

It said its increases, which would be meted out on a deal-by-deal basis, would amount to the equivalent of a half to a full ratings notch. A full ratings notch increase in subordination would mean that a deal's Baa2 bond class, which today would typically have a 4 percent subordination level, would face a 5 percent level - roughly today's requirement for a Baa1 bond.

Not all deals will be affected. "Well-diversified collateral pools, a substantial volume of investment-grade loans, and other strong features could still receive subordination levels similar to those granted during the first quarter."

So while the other ratings agencies played UN and just talked about it, at least Moody's is doing something about it... you've got to give them credit for that. Although I don't like it because it makes my job tougher, Moody's is the only agency hanging their heads out right now about an issue that all the agencies have weighed in on - the only one to risk their volume of rating assingments by actually changing their guidelines.

Q1 2007 CMBS & CDO League Tables Out

Been out of town a couple of days...

According to Commercial Mortgage Alert (no link to actual story/rankings, you have to pick up the print edition), Morgan Stanley, Wachovia, JP Morgan Chase and RBS Greenwich topped the Bookrunner league tables for the first quarter of 2007. While Morgan Stanley led in Global CMBS and Non-US CMBS, JP Morgan edged them out for the US lead. Wachovia led in the CDO division, and RBS Greenwich came out on top in Agency CMBS.

According to CMA, US CMBS issuance was up 32% from a year ago, and and foreign CMBS was up 48%. However, this preceeds another ratings warning (this time from Moody's, which I'll type about when things calm down in a bit) and even an even further widening of mezz spreads.

Top 15 Global CMBS Bookrunner Rankings for Q1 2007 are:

1. Morgan Stanley ($11.84 billion)
   
2. JP Morgan Chase ($9.56 billion)


3. Merrill Lynch ($7.84 billion)


4. Wachovia ($7.77 billion)


5. Deutsche Bank ($6.61 billion)


6. Credit Suisse ($4.15 billion)


7. Lehman Brothers ($6.08 billion)


8. RBS Greenwich ($6.01 billion)


9. Citigroup ($4.15 billion)


10. Banc of America ($3.73 billion)


11. Bear Stearns ($3.03 billion)


12. Goldman Sachs ($2.83 billion)


13. Barclays Capital ($1.75 billion)


14. ABN Amro ($1.43 billion)


15. West LB ($523 million)

Top 10 US-Only CMBS Bookrunner Rankings:

1. JP Morgan Chas ($9.24 billion)


2. Morgan Stanley ($8.45 billion)


3. Wachovia ($7.78 billion)


4. Merrill Lynch ($7.15 billion)


5. Credit Suisse ($4.77 billion)


6. RBS Greenwich ($3.74 billion)


7. Banc of America ($3.73 billion)


8. Lehman Brothers ($3.71 billion)


9. Citigroup ($3.68 billion)


10. Deutsche Bank ($3.31 billion)

A TV-MA Easter Sunday Night

As far as real estate goes, not much happened during the holiday-shortened weekend. I may post a recap of nothing later, but probably not.

Today marks the triumphant return of millions of people's Sundays being centered around HBO instead of work or their families, with The Sopranos and Entourage finally coming back on at 9:00 PM (Eastern).

Here's hoping the Sopranos stops setting up this season and finally goes to the mattresses. And I'd love to see a creative way for Ari to come back to Vince with his tail between his legs, begging to continue to rep him (and maybe Turtle's clients now). "Smoke more weed, Turtle. Seriously. Smoke more weed."

More to blog about after the shows, if the wine doesn't put me to bed first.

* * * * * *

Well, I'm disappointed in both. Not much left to say.

Another Banker Personal

Hey, just trying to help a brutha out...

Busy banker seeks friends-with-benefits situation - m4w - 24 (Upper East Side)

Yes, the rumors are true: bankers do work long hours. I came out of a long term relationship about 3 months ago and dont have much time, let alone the interest, to pursue women in bars.

Looking instead for a girl to hang out with occaisionally... some wine, some 420, some fun, etc. Prefer a petite girl, 18-25. Send me your pic!

(via i-Banking Oasis)

Could a Downtown Migration Signal the End of the Midtown Office Craze?

An article in CPN this morning on JP Morgan Chase negotiating with the Port Authority to building a 50-story office adjacent to the World Trade Center site implies that a number of blue chip Midtown tenants are exploring possibles moves to downtown.

"Overall there is significant sticker shock from some big midtown tenants that are looking downtown. Even the best inventory downtown is trading at approximately half of that ($100 per square foot) at $60 plus or minus a square foot." [So says Brian Given, vice chairman at GVA Williams in Manhattan.]

Following up on this story a few days ago, could we be staring at the beginning of the end of the Midtown office craze?

It is well known that very little available office space exists city-wide, let alone in the core Midtown office market from 6th Avenue to Lexington, 42nd Street to Central Park. If the big banks are going to aggressively pursue the types of spaces the recent rumors suggest, one has to believe that new downtown developments will be their only possible solution.

Let's not kid ourselves - when comparing a new Class A+ office at $60 per square foot versus a 30-year old Class A office at $100 per square foot, ahead of what many believe to be a rebirth of Lower Manhattan, the cheaper, value-added play will win out every time.

The flip side of the coin is that Midtown landlords are forced to drop their rents significantly - perhaps by as much as 25% - to keep these core tenants.

In either case, its hard to see the Midtown valuation trend continuing very much longer; it's certainly much easier to see the nearing peak of the price curve.

NYO: The 10 Most Expensive New York Office Assets

The New York Observer has an incredibly insightful article on the current New York office market, focusing on the 10 most valuable office properties in Manhattan. The ranking is based on a number of conversations they had with local moguls, such as Joe Moinian, Douglas Durst and Larry Silverstein, to well-known brokers like Scott Latham. An excellent read throughout.



Their rankings:



1. The GM Building

2. 200 Park (The MetLife Building)

3. Rockefeller Center

4. 9 West 27th Street

5. 245 Park Avenue

6. 277 Park Avenue

7. Seven World Trade Center

8. One Bryant Park (Under Construction)

9. Four Times Square (Conde Nast Building)

10. The Seagram Building



The Chrysler Building was notably omitted because the Property is encumbered by a ground lease. But I wish they hadn’t lumped all of Rock Center into one big pile. I would have been much more interested to hear how these players see 1211 Avenue of the Americas, less than a year after it traded. Lumping that incredible building with Time Warner’s former building, for example, doesn’t add much value for the reader.



Also, 666 Fifth Avenue, just acquired for $1.8 billion by a partnership led by Jared Kushner, who owns the New York Observer, was not included.

A Garden State Tuesday

Since a few notable transactions occurred recently in our neighboring state to the west, New Jersey is well rep'd in Tuesdays (delayed) notes:

Tishman Speyer bought the 833,000 square foot MetroPark Office Center (CPN) in Woodbridge for an undisclosed amount (although GlobeStreet's DealTracker database pegs it at $200 million, which rounds out to $240 per square foot. While the seller purchased it for $150 million in 2003, Tishman should still see significant appreciation even in the near term as the asset is head and shoulders above much of the surrounding market (with very little ongoing development in the immediate area).

Four Gateway in Newark sold for $72 million (CRE/IPG) to a partnership including Ivy Equities and Heritage Management. The 327,000 square foot office, purchased for $220 per square foot, is part of the Gateway complex near Newark's Penn Station, which includes a couple of other buildings which have traded in the last 2 years. The JV formed for the purchase follows another recent Newark transaction involving both companies, as Ivy paid Heritage $21 million for 570 Broad.

In other news from areas that don't smell like methane...

Inland takes Winston Hotels for $458 million (Chicago Tribune)

Carl Icahn loses his CFO at American Real Estate Partners (BW), and

East Harlem residents don't want a better neighborhood (1010 AM)

$625 PSF takes down Vacant Fifth Avenue Building

According to Globe Street, L&L has paid $500 million for the 800,000 square foot Toy Center, and plans at least $75 million of improvements to turn it into a Class A office.

The building is vacant, except for restaurant Cipriani. Lehman provided the financing for the acquisition, and presumably, the renovations going forward. Tenants will be able to take occupancy by the end of next year.

“We believe that having the largest block of available class A space in New York City will attract the attention of a variety of large tenants in the market. We have already had some inquiries,” says Robert Lapidus, L president and CIO.

Monday Notes: New Century Busts, Starwood CEO Out

In what was a huge surprise to no one, New Century filed for Chapter 11 this morning (Bloomberg) as the subprime fallout continues. In the press release posted on DealMaker, the CEO made a plea that CIT and Greenwich would retain many of the Associates, even as New Century let a few thousand of them go, announced earlier in the day.

Steven Hayer announced his resignation from the CEO position at Starwood Hotels (Atlanta Business Chronicle), after a rumored "tense" weekend meeting in which the board expressed its collective lack of confidence in his leadership of the company.

Italian investment group Ifil closed on its acquisition of a majority 71.5% stake in Cushman & Wakefield (GlobeSt.com) today. The $675 million deal values the company at around $875 million.

And finally, either Quill has designed a new "SmartClip", or I was working too late again last night and self-medicating too much. (Though probably the latter).


Edit, 8:15 PM: Welcome to The All-Nighter readers, and thanks to Monkey for the link -- 3C

My 3:00 AM Conversation with a 5/8" Capacity Quill Medium Binder Clip

Me: "Forty-one million NOI, five-and-a-quarter cap, is seven eighty-one..."

Medium Binder Clip:

Me: "Eight hundred with costs; eighty-five percent leverage is six-eighty at one-thirty over..."

Medium Binder Clip:

Me: "So debt service is... Christ, where's the ten-year again?"

Medium Binder Clip: "Four-point-six-four-two."

Me:

Medium Binder Clip:

Me:

Medium Binder Clip:

Me: "F*cking monkeys..."

Trading Floor Envy at NY I-Banks

A version of this story, which was featured prominently in this morning's WSJ, gave way to emails upon emails from colleagues here and friends at other firms -- even those not mentioned in the article -- reminding me and everyone else it was sent to that the sender still works at a prominent i-bank.

Forget trading floor envy, as the Journal put it; this was best characterized as logo-on-the-polo-shirt envy, or at best, trading floor speculation envy.

These plans fall apart faster than they materialize. Remember in 2003, when Goldman was building a magnificent high rise for their new corporate HQ, the tallest building in the state, with all the bells and whistles you would expect from such a modern architectural and business services marvel -- in New Jersey.

Four years later and they are still leasing that tower up. Meanwhile Goldman is building their new digs in Battery Park City.

From a real estate perpective, if the hype surrounding all of these banks looking for huge amounts of contiguous space is true, it confirms the assumption that Manhattan occupancy rates and rental rates aren't coming down anytime soon, as these hungry banks search for high-profile space, aren't shy about shelling out the money for it, and continue to expand organically and via mergers and acquisitions. As cap rates continue to drop (somehow) to nearly half of the current 10-Year US Treasury yield, significant upside is still the horse that's drawing the carriage.

Bull$hit, Pt. II

Park Avenue in the 50's (aka., "Wall Street North") is known for my bosses the ostenatatious little $hits who occupy window offices looking south toward the Waldorf, feet on their desks, chit-chatting away on their 20-line standard-issue telephones while reviewing an email on a blackberry instead of looking at their 35-times larger flat-screen monitor only 28 inches from their nose.



Maybe the Avenue makes the man, because half of the bosses on the block are 50% talk, 40% dictator and 10% knowledgable about anything "real" whatsoever. It's becoming a delagating cluster-f*ck.

MD: I sent you an email this morning outlining a new, innovative bond structure we need to analyze, include in the model we distributed earlier, update the overview with same, and get it out.



(Of course, the first hint that you're working with a real winner is when they verbally refer to what they just said as "same".)



MD: So round everyone up, and get it done, okay?



me: Of course. I've got Rob on the model, and Sean and I will be updating all the materials to reflect the changes well into the night.



MD: Good. Clear the decks and let's make sure it gets done tonight.

Fair enough request, right? But it's the "we" and "us" parts that really pisses me off. These guys bring in the deal, don't do anything on the execution side besides create more work and f*ck up "tweak" what's already been done by the deal team. The delegation of meaningless tasks and demands of the tiniest changes ultimately result in hundreds, if not thousands of man hours spent making changes that will in no way re-shape the transaction or alter the deal's economics, forgetting the fact that the likelihood of the deal ever getting done in the first place is slim to none.



It's like we're all back in 7th grade [American] football, where Coach Fisher tells 4-foot-3, 80-pound Jimmy how to properly tackle the running back on the end-around play. Jimmy goes home and practices day and night for a week, even skips school to practice more, and regularly stays in his backyard until well past his bedtime. But at the end of the day, Jimmy is still 4-foot-3, 80 pounds, destined to jockey at Belmont Park.

EU to Get Advice on REITs

According to this article on Forbes, the EU is compiling a panel of real estate experts to provide advice on REITs, and how they may be invested in beyond their respective nations in which each fund is incorporated. However, it looks like it will be a long while before anything is decided upon.

The commission said it has an 'open mind' on whether it will regulate in this area or not, and will report on this area in mid-2008.

Internal market and services commissioner Charlie McCreevy said the finds were widely available in several Member States, but added that they are 'locked up in their national markets - they cannot be sold across borders'.

'I am creating this expert group to look at this situation and to advise on whether there is any clear-cut case for EU action in this area,' he said, adding that he has 'an open mind on this issue'.

Real estate fund specialists interested in becoming members of the group are invited to apply by April 27, 2007.

I see nothing but upside in this. I think it will result in a more efficient European real estate capital markets system, and spur development and increased investment in Eastern Europe, where there are currently a multitude of opportunities with a finite amount of capital chasing down deals. I'd like to hear thoughts from someone with a more knowledge than me on how European REITs are currently operating (both in terms of capital raising and investing).

Breaking: Holly Rowe Less Ugly

In the most important news of the weekend, Holly Rowe has significantly de-uglified since football season. Ms. Three Capper is watching women's basketball on TV, and Holly Rowe is the sideline reporter. She is much less scary than she used to me. Well done, Ms. Rowe.