From the category archives:

Commercial

Commercial loans are the new housing storm

by Moe Bedard

Signs of financial stress are multiplying. His shop is often nearly empty. The landlord has put his building up for sale, after buying it less than two years ago. The small office building next door is under a foreclosure notice. So is a mini-mall just down the street.

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Investors starting to walk away from commercial properties

by Moe Bedard

NEW YORK (Dow Jones)–Commercial real estate owners are walking away from properties that have become untenable as investments, just as homeowners have walked away from houses they can no longer afford to pay off or sell.

The latest commercial property owner to do this is Vornado Realty Trust

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Investors fighting over to loan mod or not to loan mod

by Moe Bedard

Trying to pave its re-entry from bankruptcy, Lauth Investment Properties has proposed loan modifications with lenders on a third of its real estate holdings.

One problem: Lauth’s main equity partner rejects the deals, calling them “smoke and mirrors” that benefit mostly Lauth executives, including

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Commercial mortgage defaults at 16 year high

by Moe Bedard

NEW YORK CITY-With $4.5-billion rise in volume during the fourth quarter, the default rate on commercial mortgages reached 3.82% at the end of 2009, the highest since the 4.1% default rate last seen in 1993, said Real Capital Analytics in a report released late Tuesday. Given that the Federal Deposit Insurance Corp. has said that [...]

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Plans to mask commercial loan losses will not help

by Moe Bedard

Lawmakers and regulators are desperately hoping that a strong economic rebound will stimulate job growth, consumption and demand for the commercial real estate that banks continue to hold.
But let’s be real: There isn’t enough time on any clock to ever win that race.
Why do I say that? Because, in order for the United States to [...]

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Coming commercial crisis will be painful for communities

by Moe Bedard

The new round of financial pain, which some had anticipated but hoped to avoid, now seems all but certain. “There’s been an enormous bubble in commercial real estate, and it has to come down,” said Elizabeth Warren, chairman of the Congressional Oversight Panel, the watchdog created by Congress to monitor the financial bailout. “There will [...]

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The Coming Commercial Foreclosure Crisis: It’s Gonna Get Ugly Folks

by Moe Bedard

As if the foreclosure mess weren’t enough to keep you up at night, today we’re also digesting a new report from the Congressional Oversight Panel (that’s Elizabeth Warren & Co, the TARP watchdogs) about the looming storm in the commercial real estate market. The report predicts a wave of losses, totaling $200-$300 billion, from commercial [...]

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Commercial Investors Betting on Bad Debt

by Moe Bedard

With most if not all facets of commercial real estate investment mired in the dumps, one area is burgeoning — the market for distressed debt. Indeed, investors say the distressed debt market is more active now than it has ever been, and still nowhere near where players see it going over the next couple of [...]

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This is a recipe for the greatest commercial depression EVER!

by Moe Bedard

Who spiked the bankers cool aid? Or better yet, I think these guys must have been smoking some wacky tobaccy at their latest shin dig in Las Vegas this week.
The article below is titled, “Optimism Trumps Gloom at MBA Real Estate Finance Conference in Glitter City.”  Apparantly the Mortgage Bankers Association is predicting a better year [...]

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Commercial market is hot for court appointed caretakers

by Moe Bedard

These are boom times for receivers. With the brutal real estate market causing owners to lose their buildings to their lenders, more professionals like Hoffman are being tapped to look after properties until they can be resold.
Hoffman is managing about three times as many properties across the country as he was 18 months ago, and [...]

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FDIC’s Sheila Bair urges banks to take losses on commercial loans

by Moe Bedard

Sheila Bair, chairman of the Federal Deposit Insurance Corp, said banks should try to modify troubled commercial real estate (CRE) loans, but must recognize losses if such a workout does not maximize value.
“The losses need to be recognized,” Bair stressed to a conference of the Commercial Mortgage Securities Association.

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More trouble coming for commercial banks

by Moe Bedard

On Tuesday, Citigroup posted a $7.6-billion loss for the last three months of 2009, the banking giant’s first unprofitable quarter since 2008. Similar bad news is expected today when Bank of America Inc., Wells Fargo & Co. and U.S. Bancorp report their earnings.

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Chase CEO, Jamie Dimon says commercial real estate is a train wreck

by Moe Bedard

SAN FRANCISCO (MarketWatch) — J.P. Morgan Chase Chief Executive Jamie Dimon said commercial real estate is a “train wreck” during a speech Monday, but noted that many of the problems in the sector have already happened and won’t affect the economy too much.
Dimon also said financial regulation is needed, but described the return of the [...]

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California Hotel Foreclosures Quadruple in 2009

by Moe Bedard

“Hotels are being foreclosed on and reselling at very low, low prices. A lot of people question if they should keep paying. As bad as the numbers look right now, it’s going to get a lot worse.”
Jan. 7 (Bloomberg) — Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut [...]

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Commercial Real Estate Crisis Starting to Look Like Residential

by Moe Bedard

Most analysts believe that the commercial real estate loan market is about to reach the place that the residential part of the market was a year ago. “Losses from commercial real estate will be quite high by historic standards,” the former Comptroller of the Currency, Eugene Ludwig, told Bloomberg. Some experts think it will be [...]

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Hot Deals: OC Hotels Selling at 50% Off in Fire Sales

by Moe Bedard

A Costa Mesa hotel has sold through foreclosure at half its previous purchase price. Hong Kong-based investor Rosanna Inc. paid $21 million for the 238-room Wyndham Orange County — a hotel and parking garage on three acres of land near South Coast Plaza and the cluster of performing arts theaters.
The property was previously owned by [...]

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Commercial Loan Delinquencies Soaring

by Moe Bedard

NEW YORK, Nov 30 (Reuters) – The default rate for commercial real estate loans held by banks reached the highest in 16 years and the outlook looks worse, according to a report by a research firm released on Monday.
* Commercial real estate bank-loan defaults hit 3.4 pct

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Commercial Real Estate Blood Bath to Begin

by Moe Bedard

Commercial real estate — including shopping centers, office buildings and industrial property — will hit a low point in 2010 not seen since the Great Depression, according to a national survey of real estate executives.
Values and rents will plunge, and vacancies and defaults will soar across all types of commercial property before the market rebounds [...]

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U.S. Banks to See Sizable Losses on Commercial Property

by Moe Bedard

U.S. banks are at risk of sizable new loan losses, particularly on commercial property, and some banks may not have sufficient capital to fully cushion against losses, a Federal Reserve official said on Monday.
Some large regional and community banks that have built up unusually high concentrations in commercial real estate loans will be “particularly affected” [...]

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US Bank Regulators: “Prudent” Commercial Loan Modifications

by Moe Bedard

* Regulators urge “prudent” commercial loan modifications
* Commercial real estate seen as trouble spot for banks
By Karey Wutkowski WASHINGTON, Oct 30 (Reuters) – U.S regulators on Friday encouraged banks to modify troubled commercial real estate loans, which are seen as a looming danger spot for the banking industry.
The regulators issued guidance to financial institutions and [...]

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