A march 2009 report on commercial real estate was overshadowed by the noise about the Deutsche Bank report of June 15 projecting 40% additional home price declines in the NY region.
I'll refresh everyone's memory: That report generated an article in the WSJ on March 26, 2009 titled: Commercial Property Faces Crisis. Although the situation since March has evolved quickly and not everything in the article is relevant now, the most important quote was this:
"Of $154.5 billion of securitized commercial mortgages coming due between now and 2012, about two-thirds likely won't qualify for refinancing, Deutsche Bank predicts"
That prediciton was based on a value-drop model so it may be wide of the mark (or not), but the main point stands: a lot of securitized loans are coming due in 2009, 10, 11, and 2012.
The quality of the securitized commercial loans issued was relatively low, particularly in 2006 and 2007.
Funding for many of these is obviosuly going to be scarce, although the crystal ball is hazy for the out years, as usual.
Wish i knew a good crystal ball repairman!
I'll refresh everyone's memory: That report generated an article in the WSJ on March 26, 2009 titled: Commercial Property Faces Crisis. Although the situation since March has evolved quickly and not everything in the article is relevant now, the most important quote was this:
"Of $154.5 billion of securitized commercial mortgages coming due between now and 2012, about two-thirds likely won't qualify for refinancing, Deutsche Bank predicts"
That prediciton was based on a value-drop model so it may be wide of the mark (or not), but the main point stands: a lot of securitized loans are coming due in 2009, 10, 11, and 2012.
The quality of the securitized commercial loans issued was relatively low, particularly in 2006 and 2007.
Funding for many of these is obviosuly going to be scarce, although the crystal ball is hazy for the out years, as usual.
Wish i knew a good crystal ball repairman!
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