Fed offers TALF lifeline to commercial real estate industry
Editor’s Note: As you know, I called this coming and here it is. It was obvious that once we handled the residential real estate depression, the commercial real estate sector would be next in line. First the CMBS securities are going to be used as collateral to get bailout loans. Next step I see, is a bailout program that will allow commercial mortgages to be refinanced to a lower rate.
News (Reuters):
The U.S. Federal Reserve on Friday threw the battered commercial property sector a lifeline by granting it access to an emergency program set up last year to unlock credit markets frozen by a global financial crisis.
The Fed said its $200 billion Term Asset-Backed Securities Loan Facility, which it has already said may grow to $1 trillion in size, will be opened from June to commercial mortgage-backed securities that were issued in 2009.
Fed considers 5-year CMBS loans through TALF
The Federal Reserve is considering offering longer loans to investors in commercial mortgage-backed securities as part of a plan to help jump-start the market for commercial real estate debt, The Wall Street Journal reported on Thursday.
The Fed since Febuary has been analyzing appropriate terms and conditions for accepting commercial mortgage-backed securities (CMBS) and other mortgage assets as collateral for its Term Asset-Backed Securities Lending Facility (TALF).