GE Capital to cut commercial real estate holdings by 50%

by LJ Miehe on June 9, 2010

This is good news that GE is shedding non-core business assets so it will not be as effected by fluctuations in the financial and capital markets.  The more pressing question is this a signal beyond that on the current status of the commercial real estate markets?  A 50% reduction is nothing to shake a stick at, that is a large reduction in exposure.

Lately I have not read as many dire predictions on the commercial real market as there was in 2009.   It could be that the market is truly recovering or that it is the calm before the storm.  Bernanke is recent statements also did not totally rule out a double-dip recession for the U.S. economy.

AP – General Electric’s finance arm plans to cut its holdings of commercial real estate by half as part of a broader shrinking of the lending division, a top executive said recently.

GE Capital CEO Mike Neal said on Friday that the company is reducing its portfolio of office buildings and other commercial properties to about $40 billion, down from the current $80 billion. He did not provide a time frame for when that will happen.

Commercial real estate has been the source of many of GE Capital’s woes in the past several years, struggles that have dragged down the overall profit for the industrial and financial conglomerate.

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