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By AZ Advisory Team, November 19, 2009 4:09 pm

U.S. commercial real estate transactions rose in the third quarter for the first time since around 2007 but is still way down from a year earlier, said the National Association of Realtors. This organizatio, which hosted the 2009 REALTORS® Conference & Expo in San Diego which ended last Monday, said in its report that Commercial Leading Indicator for brokerage activity index rose 0.9 percent from the prior quarter’s fifteen-year low to 102.4, the first rise since the second quarter of 2007. Still, the index is 11.1 percent below the 115.3 reading in the third quarter of last year.

But NAR’s chief economist, Lawrence Yun, stressed that the lack of financing for commercial real estate transactions is slowing down our economic recovery. Yun addressed the government to take action to relieve some of the lending pressure as banks become troubled with the increase of toxic loan portfolios over-leveraged by commercial properties that are losing value now.  Banks then become shy about lending money which create a challenging environment for commercial transactions.

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By AZ Advisory Team, November 17, 2009 11:00 pm

Losses due to commercial real estate loans are what U.S. regional banks face greater exposure to according to a Fitch Ratings report. This may increase the possibility of their future ratings being downgraded. The risk is generally manageable for large financial institutions while the downgrades would be more prevalent among the regional mid-sized to smaller banks.

“The potential for further deteriorations in commercial real estate portfolios is a major contributor to Fitch’s negative outlook for the banking sector,” said Thomas Abruzzo, co-head of Fitch’s North America financial institutions group. “Loan losses are increasingly likely given the expectation for ongoing declines in commercial real estate markets,” he said in the report.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.