RCA in the commercial property press:

Trouble With TALF?

GlobeSt reports: Commercial real estate players got welcome news this past Friday as the Federal Reserve Board said that eligible collateral for the late June round of its term asset-backed securities loan facility will expand to include certain issuances of CMBS. The extension authorizes TALF loans with five-year maturities and in securities backed by small business insurance premium finance loans. The Fed has said the extension means the $200-billion program could grow to $1 trillion in size.

Dan Fasulo, managing director at Real Capital Analytics, points out that "all the numbers floating around" on maturing commercial real estate debt are just estimates. "Best guesstimates are that there will be 100s of billions worth of commercial real estate debt to refinance each year over the several years, approaching or surpassing $1 trillion in 2014/2015," Fasulo tells GlobeSt.com. "The current debt markets do not have the capacity to refinance this debt. A functioning CMBS market is the only way to refinance the debt."

He adds that the new TALF program will helps, as extending five-year loans for the acquisition of new CMBS issues "will encourage some new issues to be released. The biggest complaint from industry is the new five-year loans available do not apply to vintage CMBS issues (pre-2009), which many consider to be the toxic assets that the Treasury claims they want to help clean up."