Commercial REO Brokers Association To Host LA Dinner Meeting January 22 at LAX Marriott
Editor’s Note: I am thinking about flying down to this event and meet some of the players in the Commercial REO space being that this is the shoe that is dropping right now. I talked to a good friend of mine that is a Hard Money guy and he said its just getting brutal out there is the commercial real estate sector to the point that banks are even enforcing balloon payments in loans that are coming due and letting them just keep paying their mortgage until things improvement because most owners don’t have the cash and the banks doesn’t want to own the property.
The Commercial REO Brokers Association, “CREOBA” (www.creoba.com), the exclusive commercial national association dedicated to assisting real estate professionals who want to provide REO services to banks and loan providers, proudly announces its upcoming dinner meeting, scheduled for January 22 at the Los Angeles Airport Marriott on 5855 West Century Boulevard, from 6:00 PM – 10:30 PM PST.
The event, sponsored by Keller Williams Commercial Realty, will include an overview of the Commercial REO market, as well as the opportunity for attendees to meet asset managers, investors and other brokers.
Guests will also have an opportunity to listen to a panel of experts about industry trends and the skills necessary to becoming a successful Commercial REO Broker. Guest speakers for the evening include: Alice Sorenson, Light House Real Estate Solutions; Craig Berardi, REO Solutions; Ken Pratt, Old Republic Default Management Services; Brad Knapp, BREO, Inc.; Tom Oldefedent, Asset Management Servicing; and Miguel Pena, Commercia REO Asset Manager.
How A Government Bailout Created Today’s Commercial Real Estate Crisis
Editor’s Note: This is a piece that covers a decent span of time and shows some of the events and regulations or deregulation that took place to create the current situation in the U.S. commercial property market. A majority of the bank failures in 2009 had to do with overexposure to commercial loans connected to real estate.
Business Insider - In a pattern familiar from the housing crisis, the value of commercial real estate has been plunging while the volume of distressed commercial real-estate loans is rapidly rising.
U.S. commercial real estate to bottom in 2010 according to survey?
Editor’s Note: This is the most optimistic survey so far on the U.S. commercial property market. We have seen an estimate as far as 2016 for a recovery. If we are looking at unemployment not peaking until “atleast” the second quarter of 2010 (I believe 2011 or 2012 to be realistic), I don’t see businesses going out and signing new leases for space or purchasing buildings when there is still so much uncertainty.
Our stock market has some quite robust growth rates (3-6%) priced in so until we see some real growth that is not supported by the government and the jobless numbers start coming down, in my opinion this survey is just painting a rosy picture that doesn’t have any meat behind it. Here was my favorite quote, For developers of new projects, the advice is blunt: Write off 2010, as well as 2011 and probably 2012. “You can close up shop, hit the links,” the report said. “Forget about construction financing — that’s a pipe dream.”
“Double Bubble” means the commercial real estate is next to pop
Editor’s Note: The calls are getting louder with MSNBC taking about the impending collapse of the U.S. commercial real estate market. In the article they quoted that in 2006, 54% of the regional and local banks portfolios were made up of commercial loans compared to only 40% a decade before.
With values declining, many commercial loans coming due over the next 5 years and a much smaller appetite on investors behalf for this type of paper. The industry is going to have some serious troubles with these loans that were written at high valuations seen during the peak of the real estate bubble.
We will see if Congress is going to sit back and let this market implode on itself or will it come to the rescue again and provide financing to save these note-holders? My bet is “yes”
That big whoosh you’re hearing is the air rushing out of a commercial real estate bubble.
More than two years into the worst housing crisis in decades, commercial real estate is shaping up as the second half of what some are calling a “double bubble.” Owners of shopping malls, hotels, office space and apartment buildings — and the bankers who financed them — face a major crunch over the next two years as the mortgages on those properties start coming due.
Much like homeowners who now owe more on their mortgage than their house is worth, many commercial property owners have seen the value of their properties plummet, increasing the risk of default on hundreds of billions in commercial real estate loans.
Commercial real estate to drive more U.S. bank failures
Editor’s Note: The drumbeat is getting louder for commercial real estate being the next leg down. If you have followed this site since it went online, it said been repeated over and over again. Many local and regional commercial banks are taking huge losses on their commercial loan portfolio because of defaults on behalf of borrowers.
Vacancies are rising and many of these loans were written at a very high valuation making any lose of tenets a larger than normal increase to the risk of default. I still firmly believe some program will have to be put into place to try and curb this situation or it will drag down on our already fragile recovery.
Reuters, New York - The next big headache for banks is likely to be commercial real estate and analysts expect big losses and another wave of bank failures to result.
Banks held about $1.7 trillion in commercial real estate loans at the end of September, according to Federal Reserve data, or about 15 percent of their total assets. But to the extent these loans weaken, small banks are likely to be hit the hardest because larger banks are better diversified.
Apollo Commercial Real Estate Shares Fall on IPO Debut
AP, New York - Shares of Apollo Commercial Real Estate Finance Inc. fell more than 5 percent in midday trading on the stock’s debut in an initial public offering Thursday.
The real estate investment trust and its underwriters set the IPO price at $20 a share. By midday, the shares lost $1.14, or 5.7 percent, to $18.86. They traded as high as $19.20 earlier.
Commercial real estate sales forecasted to be worst in almost 20 years
Editor’s Note: I’ll just take a quote from the article that sums up my opinion to this point on the commercial property market. It is from Dan Fasulo with Real Estate Econometrics, “There’s no real way to sugarcoat it,” Fasulo said in an interview. “A slowdown of this magnitude certainly hasn’t occurred since I’ve been in the business.” Personally I have a few friends in the commercial industry and they are all seeing numbers way off from even last year. Maybe we are seeing a recovery but for that to be confirmed, the jobless numbers need to come way down so that we can be confident that business are adding employees and hence more commercial space.
Bloomberg, New York - Commercial-property sales in the U.S. this year are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s.