Court Rulings on Atlantic Yards, DestiNY USA and Block 37; Smaller Concepts for Target, Ahold (Tuesday's News & Notes)

It's been a while since we posted a roundup here. So here are some headlines and blog posts from the past week or so that you might be interested in if you hadn't seen them yet.

  • Atlantic Yards has cleared some legal obstacles. The Court of Appeals dismissed a challenge to the state's use of eminent domain for the project. The development has long been delayed by legal wranglings and other issues. Now it may finally be able to move forward.
  • In a ruling that could have big implications, Citigroup is being forced to continue funding the construction of Destiny USA. The bank believes the project is a failure and wants to stop funding construction. The court ruled against it and now others are wondering what kind of language needs to be in place on construction financing that will enable banks to back away from questionable projects.
  • Another court decision that has people talking is a ruling in Chicago which removed Joseph Freed and Associates as the developer behind the Block 37 project. This ruling comes just as the first stores for the project are about to open. David Stejkowski has some interesting analysis of the ruling. He calls it shortsighted and argues that the lender was within its rights to push for a receiver, but that it may hurt the bank in the long run.
  • NREI detailed findings from a Fitch report that concluded that life insurance companies will be able to endure CMBS delinquencies. Conservatively, Fitch projects that life insurers will take a hit of $15.7 to $19.1 billion on their commercial real estate investments, compared with industry capital of $228 billion as of June 30.
  • Food retailer Royal Ahold NV is planning to expand in the U.S. through opening of convenience stores and other formats. It had previously operated in the sector, but got out of the business in 2005. It is currently operating a pilot store in Pennsylvania.
  • In a similar vein, Target is also looking at a smaller concept than its typical 128,000-square-foot locations. It wants to open more urban stores and wants a smaller, more flexible concept that it can roll out in cities. At those locations, Target may prune the number of items available by as much as 25 percent by cutting certain sizes and colors of products to ensure the stores are well-stocked.
  • MetLife and Prudential face up to $23 billion in losses on commercial real estate.
  • Estimates from Real Capital Analytics are that total investment sales volume in commercial real estate in 2009 will amount to $49 billion. That will make it the lowest annual investment sales volume since the firm began tracking deals in 2001. Bloomberg has the report.
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