Comments (2)

By AZ Advisory Team, February 4, 2010 8:09 pm

Commercial real estate and multifamily property mortgage loan originations were 12 percent higher in the fourth quarter of 2009 than during the same period last year, and 15 percent higher than the third quarter of 2009 according to a quarterly survey released by the Mortgage Bankers Association (MBA) Tuesday at its Commercial Real Estate Finance convention in Las Vegas.

“Commercial and multifamily mortgage originations picked up in the fourth quarter, but remain at a low level in absolute terms,” explained Jamie Woodwell, VP of commercial real estate research at MBA. “The trend shows stability coming back to the market, but the pick-up in volumes really indicates just how low origination levels had fallen.”

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.

Comments (0)

By AZ Advisory Team, January 22, 2010 3:40 pm

Lenders Remain Cautious, but Encouraging Signs Emerge. Banks will remain the primary source of financing for commercial real estate, with the exception of apartments, which will continue to benefit from agency lending. Life insurance companies are showing renewed interest in lending, but a 2010 surge is unlikely due to capacity limitations. While traditional CMBS is not expected to become a major source of financing in the near term, the first TALF-eligible CMBS issuance was met with strong demand and paved the way for a few non-TALF deals in the weeks that followed.

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.

Comments (1)

By AZ Advisory Team, October 16, 2009 4:42 pm

A report today says that Federal bank regulators are close to issuing guidelines aimed at encouraging lenders to work out distressed commercial real estate loans. Many financial institutions face the risk of incurring losses and bankruptcies as distressed borrowers fail to refinance or pay off their loans. Deutsche Bank AG has projected that commercial-real-estate losses for banks could end up being as high as $300 billion.

The guidelines come as regulators are bracing for many more bank failures, particularly at small banks with high exposures to commercial real estate loans. Commercial real estate loans are the second-largest loan type after home mortgages. More than half of the $3.4 trillion in outstanding commercial real estate debt is held by banks.

“Banks are vulnerable to significant further deterioration in their CRE loans,” said Federal Reserve Governor Daniel K. Tarullo. Regulators said high levels of these loans are concentrated in smaller banks, although regional and large banks also have exposure to problems in these areas.

Sheila Bair, Chairman of the Federal Deposit Insurance Corp.  told a Senate subcommittee that reworking the terms of these loans could help banks avoid larger losses. She likened it to the push regulators made last year for banks to rework troubled residential mortgages. Reworked commercial real estate loans “should be encouraged, not criticized. We are encouraging banks to restructure these loans,” she said. ”

Mr. Tarullo said the types of loans causing the most problems are construction and development loans, not investments on existing properties. One reason is that Construction and development loans are likely not bringing any income or revenue for the borrower, making it much easier to fall behind.

Do you welcome this development? What do you think should be done? Let us know.

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.