Commercial Property News - October 2008 - (Page 23)

INDUSTRY PULSE FINANCE is time to clean up their plates by shedding development-related loans at considerable losses rather than continue to battle with delinquent developers over projects that might not pan out for several years, Emery related. “It’s a matter of deploying whatever capital you can get for it more productively, preparing to make (sound) new loans when credit conditions improve.” One bank opting for this approach is Central Pacific Bank of Honolulu. It sold a $127.5 million portfolio of non-performing California land and condo loans and repossessed properties for less than 35 cents on the principal-balance dollar. And now a growing number of banks are demonstrating willingness to sell non-performing commercial mortgages at whatever price the market will bear, Emery noted. But quite a few are either unwilling to further diminish bottom-line earnings by recording corresponding losses or just refuse to face reality, he continued. In light of the Lehman Brothers Inc. bankruptcy filing and the potential acquisitions of Merrill Lynch & Co. by Bank of America Corp. and Morgan Stanley by Wachovia Corp., experts expect to see banks accelerate dispositions of distressed commercial real estate debt. New ownership regimes for these institutions would likewise likely mean better bargaining positions for opportunistic buyers. A Lehman Brothers liquidation would presumably provide important pricing marks for distressed assets that other lenders would in turn cite in putting non-performers on the market to shore up balance sheets,Williamson noted.And as long as marks for distressed debt come in below the replacement cost, opportunistic buyers will pounce. “It’s going to take two to three months to establish the market” once new pricing marks get set, but Continued on page 31 ® Y Your Commercial Real Estate Needs Exceeded. EOLA CAPITA L. T growth for multi-family properties in June and July contributed to the decline, but we believe this pause may be short lived. In addition, through the second quarter, 92 percent of maturing fixed-rate loans had paid off. Overall, we believe that the positive maturity refinancing outcomes to date have benefited CMBS credit performance and mitigated a spike in delinquencies. One Orlando Centre 800 North Magnolia Orlando, Florida Multi-Family 438-2504 Office www.EolaCapital.com | 407-650-0593 www.cpnonline.com • October 2008 • COMMERCIAL PROPERTY NEWS 23 http://www.eolacapital.com/ http://www.eolacapital.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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