Thursday, July 09, 2009

Lawmaker: "The CRE time bomb is ticking"

by Calculated Risk on 7/09/2009 11:44:00 AM

From Dow Jones: US Lawmakers Sound Alarm About Commercial Real Estate Market

"The commercial real estate time bomb is ticking," Joint Economic Committee Chairman Rep. Carolyn Maloney, D-N.Y., said in opening remarks to a hearing before her panel Thursday.

U.S. Sen. Sam Brownback, R-Kansas, said he was distressed about the situation the industry is facing.

Banks have yanked back on lending to developers of shopping malls, apartment complexes, hotels and office parks. ... The U.S. commercial real estate market is roughly $6.7 trillion in size and is underpinned by about $3.5 trillion of debt.
The article mentions the Fed's legacy CMBS TALF as helping the CRE market. The first auction is July 16th.

A few CRE stories this week:

Strip Mall Vacancy Rate Hits 10%, Highest Since 1992
"[W]e do not foresee a recovery in the retail sector until late 2012 at the earliest."
Victor Calanog, director of research for Reis on Retail CRE
Apartment Vacancy Rate at 22 Year High

Hotel Recession Reaches 20 Months

U.S. Office Vacancy Rate Hits 15.9% in Q2
"It's bad. It's decaying and getting worse. Given the depth and magnitude of the recession, you can argue that we are facing a storm of epic proportions and we're only at the beginning."
Victor Calanog, Reis director of research on the Office Market.
CRE: Another Half Off Sale