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Commercial Loan Workout

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 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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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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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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Homeless shelter in Atlanta facing foreclosure

by Moe Bedard

ATLANTA — A new lender has foreclosed a massive shelter that houses hundreds of Atlanta homeless each night.
Bob Cramer, chairman of the board Metro Atlanta Task Force for the Homeless, confirmed Wednesday that the group had received a foreclosure

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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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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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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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IRS Issues Rule To Aid Commercial Real-Estate Sector

by Moe Bedard

Owners and developers of commercial real estate will now have more flexibility to rework their mortgages or obtain loan extensions under a new federal tax rule, a change that could aid the troubled sector.
The new rule, issued by the Internal Revenue Service, will affect loans backed by shopping malls, office parks and other commercial properties [...]

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‘Special Servicers’ Flooded With Late Commercial Property Loans

by Moe Bedard

Deteriorating commercial property markets are putting commercial mortgage-backed securities to their first critical structural test. Failing it could keep financing tight and property values suppressed for years.
Since the 1990s, the CMBS practice has successfully financed commercial landlords by selling their loans to investors. But the engineers behind CMBS never contemplated that a bad recession, high [...]

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For Commercial Real Estate, Hard Times Have Just Begun

by Moe Bedard

As the commercial real estate market heated up earlier in the decade and lenders competed feverishly to issue ever-riskier mortgages, hundreds of bankers, investors, lawyers, brokers, appraisers, accountants and analysts flocked to an investors’ conference in Florida each January to celebrate their good fortune with lavish beach parties featuring bikini-clad models and popular entertainers.
But in [...]

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California hotels flood the market

by Moe Bedard

LA TIMES – Los Angeles County has the highest number of troubled hotels: 27, including the 469-room Marriott in downtown L.A., according to a new Atlas report.
With the trend expected to continue throughout 2009, as many as 500 properties could be in default by year’s end, Atlas President Alan X. Reay said.
Read more from the [...]

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Commercial Foreclosures: US programs seen too late to stem foreclosure wave

by Moe Bedard

* CMBS default rate could hit 3.5 percent by year-end
* Bank default rate could reach 4.8 percent in 2011
* Commercial real estate prices may fall 35-45 pct from 07 peak
 By Ilaina Jonas
 NEW YORK, March 26 (Reuters) – The new federal programs to aid the U.S. financial markets will likely not fend off the impending wave [...]

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REAL ESTATE: HOMEOWNERS HAVE COMPANY

by Moe Bedard

Vacant land owners make up the bulk of commercial property defaults in Las Vegas, said Travis Nelson, assistant vice president of commercial sales at Nevada Title Co.

“There’s no income from the land. It’s hard to carry. You have a lot of higher-interest loans from private sources and hard money lenders,” Nelson said.

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Tough ‘09 Is Seen for Commercial Real Estate

by Moe Bedard

This year will be among the worst for the U.S. commercial real estate industry, as unemployment leads to a drop of as much as 30 percent in rents in some places and more office towers from Washington to Chicago and Los Angeles sit empty, according to several research reports from large commercial real estate service companies.

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Commercial Foreclosure Tsunami on the Way

by Moe Bedard

Looks like the commercial mortgage arena will have a rough year in 2008. It is only the next logical foreclosure wave to hit the US and this tsunami may be the mother of all waves that drowns what’s left of our economy.
Reuters – Commercial property loans originated in 2005 to 2007 that increasingly carried [...]

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