The firms, which together have taken more than $110 billion in capital infusions from the Treasury, stepped up their lending for apartment buildings as the commercial real-estate market peaked, and they are now facing rapidly rising loan losses.
via WSJ.com.
On October 30, 2009, the Federal Deposit Insurance Corporation, in coordination with other federal bank regulatory agencies, released guidelines on prudent commercial real estate loan workouts.
The volume of distressed commercial properties—offices, retail buildings and industrial properties in danger of foreclosure—will likely increase substantially in 2010
via Topix.
Demand for commercial property has dropped as the economy has weakened, leading to significant declines in property values, increased vacancy rates, and falling rents.
via FRB
CHICAGO REAL-ESTATE MAGNATE SAM ZELL, known for decades as the “Grave Dancer” for buying commercial properties at cycle bottoms, ain’t ready to play yet.
via Barrons.com.
Underwater properties cannot be refinanced so when loans come due… it’s foreclosure time. And foreclosures on underwater properties result in losses for banks and other investor groups, which in turn lead to federal bailouts, at least in cases where the bank is deemed TBTF – too big to fail, which should really be renamed TPCTF – or “too politically connected to fail”.
via Mandelman Matters.
