I just returned to Kauai from Lake Tahoe (beach weddings venue on the Lakefron there) and How is it, I ask you, that commercial real estate values have been rising when the rest of the real estate market has been in a state of atrophy?
Naturally, there are those who will profit by a trend. Certain investment funds are looking to do so from the properties owned by restaurants. Restaurant profits have been squeezed by high food prices and customers’ belt-tightening. Apparently, commercial mortgage-backed bonds are in red-hot demand. Certainly that was case in Lake Tahoe and the lakefront lake tahoe weddings venues real estate. The island of Kauai is like that as well.
Leslie Patton, Jonathan Keehner and Tara Lachapelle, wrote about this story for the Bloomberg business news website. The story, under the title, “Rush to Restaurant Real Estate Brings 53% Increase in Valuation: Real M&A,” was posted Sep 12, 2011.
Patton, Keehner, and Lachapelle write that the 10 largest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar, and while since these restaurants are falling to in comparison to the Standard & Poor’s 500 Index this year (of companies on the list)…
Why can’t people make money from doing something productive, rather than merely sucking value out of something? In addition to Lake Tahoe, I have also noticed a similiar trend when it comes to Kauai Real Estate as well, but then again I suppose that the Kauai real estate mrket has always been a little different, much like Lake Tahoe, and they are both popular weddings venues as well.
The Carl Icahns of the world are expert at taking over a company and mining out its wealth. The Bloomberg piece quoted Josh Zamir , a manager at Capstone Equities LLC, a New York-based private equity firm specializing in real estate, as saying, “……..(all in all)….. it means the market is not recognizing the value of their real estate.”
The Bloomberg piece also reports that according to Sam Yake, an analyst at BGB Securities Inc. in Arlington, Virginia, once these investment firms have taken over, the real estate would be rented back in sale-leaseback contracts

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