Time Bomb: The $3.5 trillion commercial real estate market
By Daniel at 9 July, 2009, 9:33 pm
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
July 9 (Bloomberg) — The $3.5 trillion commercial real estate market is a ticking “time bomb” that may lead to a second wave of losses at large U.S. banks, congressional Joint Economic Committee Chairwoman Carolyn Maloney said……..
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTP9nCROB6PU
———————————————————
More Comment on this at ritholtz.com/blog
Our view of CRE exposure has not changed at all, namely that the loss rates in that asset class will be multiples of the record loss rates on residential or RES exposures. Why on earth is the Obama Administration still listening to Tim Geithner and Ben Bernanke on the latest PPIP proposal to buy CMBS at current prices when the cash flows are falling every month? If you look at the yields on bank CRE and then extrapolate to the securitization market where much of the CRE exposure resides, there is no way that the pricing assumptions in the PPIP make sense. Guess we have to wait for T-Day for Obama & Co to wake up and smell the bird burning.
One of the questions I ask my clients is this: How do you think prices for existing homes and commercial both will react when the RES and CRE properties now in foreclosure work their way through the courts and come popping out onto the secondary market around Thanksgiving? My firm entered a JV with a very experienced asset management and disposal group earlier this year. The view from the disposal channel is ugly..”
——————-
FAKE FInancial industry (Banks,Investment brokers ad Ins etc) have to face the TRUTH. So are Timmy and Ben
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.