Extend and Pretend: Update Q3 2010
By: Myles, July 8th, 2010
We have addressed the topic of “Extend and Pretend,” with respect to banking activities relative to the current commercial real estate market. Apparently this is a topic that will be with us for quite some time. So what is the true state of the CRE market, as of today (Q3 2010):
- Banks hold some $176 billion of souring commercial-real-estate loans.
- About two-thirds (2/3’s) of bank commercial real-estate loans maturing between now and 2014 are underwater, meaning the property is worth less than the loan on it.
- U.S. commercial-real-estate values remain 42% below their October 2007 peak and only slightly above the low they hit in October 2009.
Today’s Wall Street Journal features an article entitled To Fix Sour Property Deals, Lenders ‘Extned and Pretend,’ whereby the current state of CRE banking is outlined, fully.
This is a great read for those that either: (1) need to navigate the current CRE landscape, (2) truly want to figure out what the future holds in terms of investment opportunities (or the lack thereof) moving forward, or (3) for those of us who just need to satisfy our curiosity as to what is really going on in the CRE arena, today. Read on ….
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