Economists at the National Association Of Realtors, Americas estate agents governing body, indicated that the recent slump in US housing activity and the consequent slump in prices for new homes, may have come to an end.

Their latest survey shows a surprise uplift in confidence amongst house builders and constructors exposed to the residential market. In a sentiment indicator run in tandem with Wells Fargo bank, the indicator rose from 35 points in January 2007 to 40 points this month, though a sub 50 figure still indicates that the market is considered poor.

Many observers suggest that this steadily increasing confidence may be a function of the correlation between the sell of surplus housing stocks which is bringing back some equilibrium in the over-supply of early 2006.

Irish property developers Ballymour, served up a record not yet seen in the London Docklands development zone. Their Pan Peninsula development comprising two towers of residential apartments has been sold out, according to the company off-plan.

Whilst the firm did not clarify whether the majority of sales came from private buyers or corporate investors, they confirmed that a penthouse unit on the 50^th floor of one tower sold for £7mn GBP.

It is mooted that the firm has used the sale proceeds from the first twin towers by purchasing two tracts of land either side of the existing sites and reckons on building three or four more residential towers, subject to further buyer interest.

O O’Brien

Real Estate Agency News 26-01-2007 : 

Ever since the subject of a management buyout was mooted by the Board of Countrywide, the UK’s largest Estate Agency, controversy was never far away. Certainly the gathering anti camp of private equity giants who had large stakes in the firm, had said openly form the outset that they felt the deal was undervalued.

An unnamed source told HOMZZ there was an implied undercurrent that The Board of Countrywide as brokers and planners of the sale price for the assets, were more than likely to formulate a price that was favourable to the buyers…..er themselves and oh 3i the private equity giant.

As details of the sale terms panned so the opposition to the valuation grew with some extremely vocal stakeholders making public pledges in the media and currying support amongst the gathering “against” camp seeking to garner the 25% plus of shareholder with voting rights, saying no to the deal at its present valuation of £971 mn GBP.

The vote will be held today and all sides are propounding victory and on balance observers have called a blocking vote as the likely victor.   

Smithy

The ‘Good Old Days’ of private equity groups markets were characterised as a gentleman’s club, where the vulgarities of competition and bloody battle for assets were a no-no.

With stratospheric availability of funds and a small number of competitors, there was plenty to go round and once one Private Equity Group (PEG) had made its pitch for targets assets, it was understood that no others would come in an outbid for the asset in question.

The unseemly competition that has broken out for Equity Office Properties, the US commercial space managers, is something of a new departure. Having already accepted a bid from Blackstone (PEG), Vernado a consortium comprising the likes of Starwood Capital and Walton Street Capital have made a trumping bid consisting of cash and stock which represent a premium over Blackstone’s $36 bn USD offer.

Let battle commence!

OOBrien

Real Estate Supplies Business 25-01-2007:

  Home Depot, the world’s largest home improvement retailer, has had its share of activist shareholders laying siege to the doors of its highly paid executives. 

It seemed for a while that no one really noticed the galactic pay packets executives of the firm were awarding themselves, that is until the spectre of a severe slowdown in US Housing activity and increasingly slick competition form bitter rival Lowes, the latter quietly grabbing marketing share through better merchandising, shelf stocking and niche marketing. 

The internecine battle commenced when the megalith firm started to experience a rapid decline in its fortunes resulting from these external factors. All of a sudden, the amount of pay the senior executives became to matter far more. 

Bob Nardelli the then Chief Executive became a lightening rod for activist shareholders who felt that against a backdrop of slowing sales and increasing competition, his $100 m USD pay annual package was somewhat “excessive”. Nardelli’s ‘hard nosed’ treatment of many people he dealt with meant their was added impetus to the knife sharpening with him in mind. 

After 18months of ‘street warfare’ between influential shareholder, disgruntled employee organisations Mr Nardelli finally departed albeit and according to the Board: by mutual consent. 

Of course opponents of Mr Nardelli Know different! It is then entirely expected that Mr Nardelli’s replacement and new CEO Frank Blake, has been trumpeted by the Board, standing as it does at a modest $9 m USD against $24m USD for his salubrious predecessor. 

Mr Blake’s compensation is to be more reflective of the firms fortunes at the New York Stock Exchange and Home Depots performance will more likely impact heavily on how much Blake earns. 

There are many a smug Home Depot shareholder smiling in quiet satisfaction! ‘Long live errr…Socialism” 

Leon Goldfarb