• Commercial real estate prices are falling faster than home prices and losses will mount
• Private commercial construction will continue to contract sharply, hitting GDP growth
• Lenders’ losses may total $250-500bn, hurting especially regional and local banks
• Banks’ commercial real estate losses will keep them cautious on lending through 2010
• But CRE losses will only be 10-20% of total US financial system losses - housing is still the main story

California, anchored by two coastal cities with rising employment and rents, attracted almost $49 billion in commercial property investment in the first half of the year, more than any other state.

The most populous U.S. state had 29 percent more office, retail, hotel and industrial real estate sales by dollar amount than New York state and triple that of third-place Texas. California’s total investment was up 48 percent from a year earlier, research firm Real Capital Analytics reported. It trailed New York only in apartment sales.

More Loan Portfolios Brought to Market
The list of commercial mortgage and loan offerings keeps growing. DebtX has launched marketing for another $203 million of commercial mortgages and loans. That gives the Boston company some $500 million of loans that will be offered through Oct. 15. The portfolios are being brought to market amid a relative deluge of whole-loan offerings by a mix of conduit lenders, banking institutions and insurers. Despite the barrage of offerings most of the offerings will find buyers because of the variety of assets they represent. While debt-market troubles might be motivating some institutions to unload certain loans, most sellers are said to be banks that are making efforts to fine-tune their balance sheets.

A new office complex is being planned in Santa Monica, where international developer Hines just purchased a shuttered industrial plant on Olympic Boulevard.

The Houston-based builder paid more than $75 million for the property, according to a real estate expert who asked not to be identified because terms of the deal were confidential. The seller was a family trust that had held the land since the 1950s.

Hines hopes to build two- to four-story office buildings totaling about 300,000 square feet on the 7-acre site. It is at the northeast corner of Olympic and 26th Street, said Colin Shepherd, a Hines senior vice president.

Law firm adds partner to real estate practice: Manuel “Manny” Fishman has joined the law firm Cooley Godward Kronish as a partner in its real estate practice group. His practice focuses on office and industrial leasing, secured lending, the acquisition and sale of commercial properties and the intersection of land-line and wireless telecommunications and Internet-based services with commercial real estate. He joins from the San Francisco office of Stoel Rives where he was a partner. Fishman earned his law degree from Santa Clara University School of Law in 1982.

COMMERCIAL REAL ESTATE NEWS

• AMB Property of San Francisco, which owns and develops industrial real estate, said Friday that it would sell as many as 9.1 million new shares and plans to expand its global development business by 75 percent over the next four years. The company will use the funds to acquire properties, repay debt and for general corporate purposes, AMB said in a regulatory filing. The company owns or has interests in 124.7 million square feet of distribution space in 12 countries, the company said. AMB shares fell $1.23, or 2 percent, to close at $61.18. They gained 19.2 percent in 2006 and are up 4 percent so far this year.

Los Angeles Hotel Market Remains Strong
Downtown Los Angeles hotels are seeing significant increases in occupancy because of renovated rooms and a renewed interest in staying downtown, according to report by PKF Consulting. The L.A. firm, which tracks the hospitality market, expects downtown’s average hotel occupancy rate to hit about 73%, compared to 51% in 2003. Hotel occupancy for the 10-county region is hovering just under 80%.

Atlanta Hotel Market Booms
By the year 2010, Atlanta will have 38 additional hotels with more than 3,830 rooms. The city has seen many of its projects stagnate in the years since the 9/11 terrorist attacks, but the crane-spotted skyline would imply the stagnation has passed. The city has seen 12 hotels rise in 2004 and 2005 adding about 1,500 rooms, according to PKF Consulting, Inc. Atlanta has 746 hotels with 92,117 rooms. PKF knows of 53 hotels in the metropolitan Atlanta area that are either in development or in planning. Those would add 71,000 rooms. The deluge of development was prompted by solid demand. Room rates rose to $79.46 in 2005 from $77.47 in 1998, signaling a demand upswing.