CREbeat

December 9, 2009

Geithner talks about expanding TALF to benefit CRE

Filed under: Uncategorized — creblogger @ 11:15 am
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I received an e-mail from Treasury this morning which contains a letter which Secretary Geithner has or is sending to Hill leadership on the administrations’s exit strategy for TARP.  Most importantly for the CRE world, it holds out some hope that TALF (Term Asset Backed Securities Loan Facility) “may” be increased:

…”we may increase our commitment to the Term Asset-Backed Securities Loan Facility (TALF), which is improving securitization markets that facilitate consumer and small business loans, as well as commercial mortgage loans.  We expect that increasing our commitment to TALF would not result in additional cost to taxpayers.”

We’ll see what they actually do, but this is definitely welcome news for those facing loan maturities in the next year or two and it might even help to stop or slow the free fall in commercial real estate pricing.

Letter below…

September 22, 2009

New Treasury guidance regarding CMBS loan modifications

Filed under: Uncategorized — creblogger @ 10:14 am
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Treasury has issued new guidance regarding CMBS loan modifications, clarifying that:

1) Loan modifications can be considered at any time without tax consequences for the trust in which the mortgages are held

2) Loans can be modified even though they may not currently be in default if there is significant risk of default at a later date

This should allow a lot more owners to hang onto properties and ride out the downturn in the economy, which is causing decreased cash flows and large value declines.  Modifications will likely reduce the number of distressed property sales in the next few years, but there will still be plenty of distressed opportunities for sale.  Many properties are simply so far “underwater” that it will make more sense for lenders, whether CMBS servicers or others, to foreclose or resolve the issue in some other manner.  The extending and pretending (even with modifications) can only go on so long for many of these properties.

June 27, 2009

Herb Allison reports PPIP on track, plays down CRE loan maturity risk

Filed under: Uncategorized — creblogger @ 11:57 am
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Herb Allison, sounding a bit like W, says “we’ve been working very hard on PPIP” and it will launch soon.  For those overwhelmed with all the bailout acronyms, this one stands for “Public-Private Investment Partnership”.  It may involve private firms using 90% government leverage and guarantees to purchase “toxic” assets from banks and potentially others at deeply discounted prices to clean up their balance sheets and try to get the CMBS makret flowing again–likely with extraordinary returns the result for the investors.  Banks are probably wondering why they should let other firms profit so much with such little risk.  There has been a lot of doubt and confusion about the program, how it might work, and what it would accomplish, so much so that at this point it’s probably better for officials to keep a lid on the comments until they figure out what the plan really is and show us some action.

GlobeSt. link:

http://www.globest.com/news/1440_1440/washington/179484-1.html

June 26, 2009

Jack Welch tweet

Filed under: Uncategorized — creblogger @ 9:36 pm
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I have been messing around with twitter (feed on right) and found a recent Jack Welch tweet worth sharing:  “Barney Frank at it again..asks FNMA Fred M to lower lending standards for condo buyers…Guy is unbelievable and does it with straight face”.  He’s got a point.  Much of this government “medicine” and pressure being applied to banks et al supposedly for the good of homeowners and borrowers is only going to prolong this mess.  Do any of these guys remember how we got in this mess in the first place?

June 25, 2009

Bailout Congressional Oversight Panel explores CRE lending problems

Filed under: Uncategorized — creblogger @ 9:52 pm
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At a field hearing in New York the Congressional Oversight Panel explored CRE lending problems  Deutsche Bank’s Parkus and the Fed’s Schurman testified regarding the state of CRE lending and potential future refinance problems.  Among the questions:  “How big is that CRE shoe when it does drop?”  Unless you enjoy political grandstanding and preamble, skip to the good stuff in the middle at about 40 minutes in to hear testimony from Parkus and Schurman.  Then decide if you want to stick around for the followup questions.  Parkus refers to the future maturity defaults in coming years as “a very, very big problem.”

Struggling Maguire owes $4.4 billion in CMBS debt

Filed under: Uncategorized — creblogger @ 9:45 am
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http://www.crenews.com/index.php?option=com_content&task=view&id=61968&Itemid=128

June 24, 2009

Talking heads on CNBC calling for “quick turnaround” in commercial real estate

Filed under: Uncategorized — creblogger @ 10:27 pm
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Don’t believe the hype.  Commercial real estate fundamentals and the investment sales market are not poised for a quick turnaround.  This is a clear case of spin in service of these firms’ agendas.

Morgan Stanley presentation/commentary on private and public CRE markets

Filed under: Uncategorized — creblogger @ 5:41 pm
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June 4, 2009

Mortgage maturities likely to prolong CRE market distress

Filed under: Uncategorized — creblogger @ 1:39 pm
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Foresight Analytics has compiled the chart below which shows historic and projected mortgage maturities.  There has been a wide range of numbers floated on this topic, creating a lot of confusion about the level of maturities upcoming.  Most of the discussion has centered on CMBS, but as CMBS was ramping down, the banks were picking up the slack over the last few years.  In total, well over $1 trillion of commercial mortgage maturities are on the horizon for the next five years.  This level of demand for refinancing is very unlikely to be met.  Combine the lower origination volume with lower property values and tougher underwriting standards, and we will see a prolonged period of distressed sales of one form or another, including owners selling at a loss and bank foreclosures followed by sales at below outstanding loan balances.  Sellers will be forced to move on, creating buying opportunities over the next several years.

Week-Chart_04-27

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