Economic Update - CRE Refi Problems Loom
Commercial Property News reports: "Forbearance into foreclosures" was how the Wall Street Journal characterized prospects for the commercial mortgage-backed securities market over the coming years, when many billions of loans underlying CMBS will come due--$22 billion of which will be this year and next.
CMBS is just one part of the nagging (or looming) refinance problem for commercial real estate. Can TALF, at least as far as the U.S. industry is concerned, really really delay or ameliorate a possible wave commercial real estate defaults? Like for any large economic question, "maybe" seems like the most reasonable answer.
"TALF has the ability to help remove legacy debt from lender balance sheets which should theoretically open up more capital for commercial property lending," Dan Fasulo, managing director at Real Capital Analytics, told CPN. "Yet the program will be hindered due to the short-term nature of the debt that the Treasury will provide investors, two or three years. Treasury will have to provide at least five-year terms on the acquisition loans to get investors to participate en masse."
View the full article on Commercial Property News: Economic Update - CRE Refi Problems Loom
Posted by: Mark Alferman