Commercial Property News - October 2008 - (Page 22)

INDUSTRY PULSE FINANCE as well as online loan-sale pioneer The Debt Exchange Inc.,to help dispose of assets of failed institutions, the former ominously engaged for a five-year term.A well-placed source said the FDIC is aiming to engage other loan-sale advisors as well. That is not so surprising, given that the FDIC’s count of troubled banks grew from 90 in March to 117 in late August. Suggesting plenty of opportunities to bid on distressed commercial-property debt ahead,those institutions collectively have $78 billion worth of assets. Indeed, the FDIC reports that American banks substantially upped their loan-loss provisions during the second quarter, adding $50.2 billion compared with an $11.4 billion increase during the same period a year earlier. That is primarily because non-current credits, those delinquent 90 or more days, increased from 0.9 percent of the overall outstanding loan balance a year earlier to 2.04 percent, the highest non-current ratio since the last big distressed-asset sell-off, back in 1993. This includes roughly $30 billion in arrears out of $4.8 trillion in loans secured by real estate. Accordingly, struggling and healthier banks are increasingly engaging advisors to dispose of assets detrimental to their balance sheets. More and more banks are throwing up the white flag, observed Stephen Emery, director of sales and trading for Mission Capital Advisors L.L.C., which has an active note-sales operation. Many banks select assets for disposition depending on whether the collateral real estate is located in a market where the lender chooses to remain an investor,Emery continued. “In many cases, the answer is no.” With residential and land assets, that can mean painful write-downs, but it can also translate into repositioning balance sheets for better days ahead. Indeed, even many decently capitalized banks have determined it THERE ARE LOTS OF VARIABLES ON A PROJECT. IT’S IMPORTANT TO HAVE A CONSTANT. $163.2 Million Emeritus Senior Housing Pool Acquisiton Financing Mortgage Credit Facility 19 Senior Housing Communities within 11 States Freddie Mac $33.8 Million The Cliff’s at Jersey City Multifamily Jersey City, NJ Fannie Mae $23.7 Million Heron Meadows Apartments Multifamily Eugene, OR Fannie Mae $43.5 Million 3001 Park Center Multifamily Alexandria, VA Freddie Mac $23.4 Million The Kennedy Building Multifamily Seattle, WA Fannie Mae $16.5 Million Vista Del Rey Apartments Multifamily Tustin, CA Fannie Mae CMBS Reality Check Showing Maturity Retail delinquencies among Standard & Poor’s rated U.S. CMBS increased 12.4 percent in July from June’s levels and are up more than 40 percent year-to-date through July. Retail was the only property type to see higher delinquencies in July; in the aggregate, delinquencies actually decreased 2.2 percent for the four property types illustrated. The abrupt halt in delinquency $1800 $1600 Sep-2007 Dec-2007 Mar-2008 Jun-2008 Jul-2008 $22 Million The Savoy Multifamily Atlanta, GA Freddie Mac $19.2 Million Palm Lake Apartments Multifamily Fresno, CA Fannie Mae $17.4 Million Oxford Court Multifamily Great Neck, NY Freddie Mac Comprehensive. Customized. Consistent. As one of the largest real estate lenders in the country, KeyBank has the resources and experience to get the job done. But what we really focus on is working alongside our clients to create innovative, customized solutions that ensure a smooth ﬁnancing process from start to ﬁnish. $1400 $1200 $1000 $800 $600 $400 $200 $0 To contact a nationwide representative near you, call 1-888-KEY-2221 or visit key.com/realestatecapital today. Securities products and services such as investment banking and capital raising are offered by KeyBanc Capital Markets Inc. Member NYSE/FINRA/SIPC. Banking products are offered by KeyBank National Association. Credit products are subject to credit approval. ©2008 KeyCorp Lodging PROUD SPONSOR Retail Source: Standard & Poor’s www.standardandpoors.com • Larry Kay • 212- 22 COMMERCIAL PROPERTY NEWS • October 2008 • www.cpnonline.com http://www.key.com/realestatecapital http://www.key.com/realestatecapital http://www.standardpoors.com http://www.cpnonline.com

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CPN - October 2008 Contents Starting Line Industrial Data/Analysis Conferences Chicago Market Profile Finance International Title Insurance Brokerage Corporate Report

Commercial Property News - October 2008

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