Archive for December, 2010

Walgreens Beats Profit Estimates – Shares Rally

December 23, 2010

Via Proactiveinvestors :

Despite an inventory write-down and restructuring costs, Walgreen’s (NYSE:WAG) first quarter beat analyst estimates as gross margins increased. 

First quarter profit for the drug store chain increased nearly 19% year-over-year to $580 million, or 62 cents per diluted share. Restructuring costs related to the company’s affected its bottom line by about 3 cents per diluted share. 

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For the quarter ended November 30, total sales increased 6% year-over-year to $17.3 billion while same store sales edged up by 0.8%.  Prescription sales, which makes up about 66% of sales for the quarter, climbed 5.3% overall and 0.9% at stores opened for at least a year.  

The results trumped analyst estimates of a profit of 54 cents on revenues of $17.30 billion. 

“Our performance was driven by our continued focus on gross profit margins, cost control and the strategic slowing of our new store openings. As a result of improved merchandising, including promotions and pricing, we saw significant increases in gross profit margins in the front end, “said Greg Wasson, CEO of Walgreens.

Gross margins increased 80 basis points compared to the year-ago period to 28.5%.

During the quarter, Walgreens provided about 5.6 million flu shots, making it the largest flu shot provider in the U.S. beside the federal government.  But the number was less than expected, prompting the firm to take a 2 cents per diluted share inventory write-down.

During the quarter, the company opened or acquired about 121 new drugstores. 

Looking ahead, the company cautioned that “persistent high unemployment makes this a challenging retail environment during the holiday season”.  Christmas sales and the flu season are often key drivers for the company’s second quarter results.

As of 12:58 pm EST, the company’s shares have rallied 7% to trade at $39.49.


Credit Tenant Lease Loans vs Bank Loans – An Investment Banker Explains the Differences

December 21, 2010

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A good credit tenant lease (CTL) banker can be the best friend commercial real estate owners who invest in buildings that are triple net (NNN) leased to credit worthy tenants, because CTL bankers can turn those leases into gold.

CTL lending is a unique and highly specialized investment banking transaction used by commercial real estate investors to cash in on value of a long term lease. In many ways CTL loans are no different from standard commercial mortgage loans, but in other important way they are quite different.

Banks fund traditional commercial mortgages by either lending a borrower deposited funds or by selling a mortgage to an institution or a GSE such as Freddi Mac or Fannie Mae. CTL loans, on-the-other-hand, are funded by investment bankers who issue private placement  mortgage backed bonds to fund their loans. 

Standard bank loans are backed primarily by the value of the real estate and the financial wherewithal of the borrower. CTL loans are secured first and foremost by the lease that is associated with the real estate rather than the property itself. CTL loans are non-recourse mortgages so the finances of the borrower are not an overriding factor.

Banks require minimum down payments of 20-25% so they can meet their 75-80% loan-to-value (LTV) requirements. They also have strict debt-service-coverage ratio (DSCR) that often top 1.2x. CTL loans are high leverage loans with no restrictions on LTV (100% LTV) and very low DSCR of around 1-1.01x.

Time is money and banks can take forever to close a commercial mortgage. 90-180 days is typical for institutional loans. The red tape and documentation is a bureaucratic nightmare. Conversely, CTL is a streamlined process with few surprises. If a loan gets passed the application stage, it is exceedingly rare that a deal fails to close. Basically, if the tenant and the lease pass muster the deal will fund. CTL deals take only 45-60 days to complete from start-to-finish.

Finally it’s important to note that a CTL loan is the last loan a building will ever need. CTL loans are long-term, usually co-terminus with the length of the lease (up-to 25 years). They are also fixed rate, self amortizing loans so property owners never have to worry about balloon payments or rising interest rates. Bank loans need to be refinanced every 3, 5, or 7 years at substantial cost and aggravation.

Not every property qualifies for CTL financing; the building must be “stand alone” and the lease must be NNN and have a term of at least 10 years. Tenants must qualify also; they have to be considered “investment grade” by the big credit rating agencies. However, if a deal does qualify sponsors will find CTL a dependable source of capital for the purchase, refinance and development of NNN leased real estate.

The author, Glenn Fydenkevez, is President of MasterPlan Capital LLC. Mr. Fydenkevez has over 20 years experience in finance and has been an officer at one Wall Streets largest investment banks. About MasterPlan Capital LLC: MasterPlan Capital is a privately held, dynamic commercial mortgage lender and commercial real estate investment banking firm. The company offers commercial mortgage loans, credit tenant lease (CTL) financing, equity financing and asset management services to commercial property owners and investors in the lower 48 states. Borrowers can apply for financing on-line or may inquire by calling 800-727-5140 toll free.

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MasterPlan Capital Rolls out new CMBS Commercial Mortgage Platform for Multi-Family (apartment building) Loans.

December 21, 2010

MasterPlan Capital is pleased to announce that, through a strategic partnership with an established CMBS lender, we are now able to offer our clients CMBS loans against multi-family (apartment building) properties.

 The parameters for the CMBS program will be as follows:

Collateral:  Multi-Family,  LTV: to 75%, DSCR: 1.25x or better, Loan Size: $5mm-70mm, Area: Population Centers, Eastern US, Terms: 5, 7 & 10 years, Amortization:  25-30 years, Recourse:  Non-Recourse, Underwritting: Full, Rates: 5%-7% (subject to change)

Clients and prospective borrowers can apply for a CMBS commercial mortgage online. Our Simple, 1 page, commercial mortgage application takes only a moment to complete and all inquires will receive prompt, professional attention.

Commercial Mortgage Rates – Take Advantage of New Lower Rates Before They Rise

December 21, 2010

The current credit environment remains very challenging for commercial real estate property owners and investors. The state of the economy and the commercial mortgage backed securities (CMBS) market has prompted lenders to tighten standards and be more selective in deciding which deals they will underwrite. But in the midst of this credit crunch, opportunity has emerged for good credit borrowers with quality properties to finance.


Interest rates on commercial mortgages are lower than they have been in a very long time. Loan rates are set based on established interest indexes such as the 10 year US Treasury Bond yield or the 30 day LIBOR. World-wide demand for secure fixed income investments has driven bond rates down, consequently rates lenders charge for their mortgage products are also lower.

Lending parameters have been narrowed and fewer buildings and borrowers can qualify for the most attractive loan programs but for those that do qualify, today’s rates offer a unique opportunity to lock in very favorable financing for as-many-as 10 years into the future.

For instance, our firm is now able to offer 5, 7 & 10 year fixed rates starting at 5.5% to our best credit clients who are buying or refinancing stabilized income producing commercial property. (Rates are subject to change with market and other factors)
Often, loans are amortized over 25 years to keep payments low. – READ THE REST HERE

Walgreens Buys The Broughton Street Medicine Mart

December 21, 2010

A longtime Orangeburg franchised pharmacy has been sold to a national drug store chain.

The Broughton Street Medicine Mart was sold to Walgreens Dec. 11.

Former Medicine Mart owner Pat Wooten said Walgreens approached him in the summer and made him an offer he could not refuse.

“I had debated it a good while and thought it was time,” Wooten said. “I am not getting any younger.”

Wooten is now serving as a pharmacist at the Walgreens on the corner of Broughton Street and John C. Calhoun Drive.

Wooten said he enjoyed having his own store but said Walgreens reputation is stellar.

“From a business standpoint it was the right thing to do,” Wooten said, noting that financially the Medicine Mart was ‘holding its own.’

But with uncertainty in healthcare reform and the third-party payment system, Wooten said he thought it was time to try something new.

“It was not like my ship was sinking,” he said. – READ THE REST HERE

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What is Credit Tenant Lease Finance? A Technical Explanation of How CTL Loans are Funded

December 20, 2010

Credit Tenant Leases (“CTLs”) are transactions in which the cash flow from a property lease is used to pay Notes or Bonds (the “Notes”) issued to investors and also to pay all the costs

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associated with occupying, operating, and maintaining the property (or the proportionate share thereof). In examining CTL Transactions, a number of important generalizations can be made. First, the transaction’s rating is generally based on the credit quality of the tenant. Second, the cash flows from the lease are matched to the cash flows on the Notes with respect to timing and amount. (The reference to the “lease” means the tenant lease for the property. Although there can be, and often are, multiple leases, this Report will generally refer to a single lease for convenience.) Although matched, the amount of the cash flow from the lease must be greater than the cash flow required by the Notes in order to support maintenance, capital expenditures, etc., for the property. Third, the lease is generally structured so that all expenses of operation, maintenance, taxes, etc., are paid by the tenant. Generally, however, the tenant is not responsible for capital expenditures and for the personal taxes of the property owner. Fourth, the Notes are generally structured so that they amortize over the term of their life. The amortization may be full or partial. Even a partial amortization assists in reducing the bullet payment on the Notes and the consequent refinancing risk. With amortization, and if the Noteholders have security over the property, the level of risk generally decreases over the term of the transaction.

Credit Tenant Lease (CTL) Financing Readily Available For Government Buildings

December 18, 2010

Looking for some positive news on commercial mortgage lending and commercial real estate investing? Generally speaking there is scant little to be found, but one particular sector of the industry is thriving and represents a tremendous opportunity for real estate investors and developers; government buildings. For good or for ill government is growing and growing fast. The current administration in Washington appears particularly amenable to the expansion of government. The economic downturn that has devastated private business has proven to be a boon for the public sector. Over the next decade government agencies such-as The Social Security Administration, The Department of Homeland Security, and The Department Immigration and Naturalization will all be expanding rapidly and with that expansion will come an incredible need for office space and administrative facilities. The Justice Department is in dire need of up-to-date, modern court houses and The US Postal Service has made a multi-billion dollar commitment to new, high-tech retail postal outlets as-well-as brand new regional distribution facilities. There is a boom going on in real estate, it’s the government facilities boom and it represents some excellent opportunities for savvy investors. – READ THE REST HERE –  Call the author, Glenn Fydenkevez, and ask about a CTL loan 800-727-5104 x# 101 Visit MasterPlan Capital on the web Contact MasterPlan Capital

Commercial Mortgage Loans – 5 Things Every Lender Will Check

December 4, 2010

Lending has Changed in the Commercial Sector

In response to the liquidity crisis in the credit markets commercial mortgage lenders and brokers are taking a “back-to-the-basics” approach to underwriting loans. Lending standards have been tightened and all deals are being thoroughly checked out.

Commercial real estate investors, property owners and developers should understand what banks and private lending firms look at as they decide which loans to fund and which loans to decline. –Read the rest here–

Commercial Mortgage Loans – Credit Tenant Lease (CTL) Finance, Apply Online – Quick Response – MasterPlan Capital LLC

6 Top Rent Boosting Tips For Your Property

December 4, 2010

Managers can easily fall into the trap that the rent is the rent and miss great opportunities to drive additional revenue from a property.

Let’s take a few minutes and brainstorm the possibilities.

With imagination and focus, the possibilities could be endless. –READ ALL 6 TIPS AT THE AAOA BLOG–

Commercial Mortgage Loans, Credit Tenant Lease (CTL) Financing, Equity Financing, Online.  Simple, 1 Page Commercial Mortgage Application. Quick Answers. Professional Service–MasterPlan Capital LLC

Update: Distressed Commercial Real Estate Investing

December 3, 2010

Commercial Real Estate: Where’s all the Distressed Property                                                                  

By Vincent Remealto of MasterPlan Capital LLC

The commercial real estate vultures have been circling for nearly 2 years, their sharp eyes peering from high above the devastated landscape, ready to feast on dead decaying buildings and development projects. According to conventional wisdom, the ground ought to be littered with foreclosed hotels, shopping centers, office buildings, and apartment complexes to devour, yet surprisingly, the vultures have found the pickings slim. –CLICK HERE TO READ THE REST AT SEEKING ALPHA–

Property owners, investors and developers can use our simple, 1 page, commercial mortgage application to apply for a commercial real estate mortgage loan online.  All inquires will receive prompt, courteous and professional attention.