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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: hank2010 who wrote (66590)	8/1/2009 11:42:21 PM
From: loantech	1 Recommendation Read Replies (1) \| Respond to of 78418

From Dr. Housing Bubble: <Make no mistake, we are going to hit another wave of pain. The commercial real estate market with $3 trillion in debt has some of the most toxic debt in the world. Empty strip malls, vacant medical offices, and parking lots with no cars. We have barely scratched the surface in this market. Have you ever asked why we are up to $13.5 trillion in financial bailout commitments? What a convenient number to choose given that we have used up $4 trillion already. And don’t listen to the Wall Street crony capitalist. Remember when we were being told Fannie Mae and Freddie Mac were going to turn a profit? Bwahahaha! A few hundred billion in losses later, the story is a bit different.> <U.S. Properties Worth $2.2 Trillion at Default Risk, Missoula Montana July 29 (Bloomberg) -- About $2.2 trillion of U.S. commercial properties bought or refinanced since 2004 are now worth less than the original price, raising the threat of more foreclosures, Real Capital Analytics said. Prices have fallen so far that about $1.3 trillion of properties have either lost their owners’ down payment or are close to it, Robert White, president of the New York-based research firm, said in a report. The analysis includes only office, industrial, multifamily and retail properties. Hotels and raw land would “add billions more to the total,” he wrote. “The sad fact is that many of these assets are healthy performing assets,” said Dan Fasulo, managing director of Real Capital. “Conditions have changed so much in the lending arena that many owners are going to have significant troubles refinancing.” The report details the magnitude of the crisis in commercial real estate, where the collapse of securitized mortgages have combined with the recession to send prices plummeting and push landlords into default. U.S. commercial property prices are down 35 percent since the peak in October 2007, according a survey from Moody’s Investors Service. The real estate market is stalled because buyers and sellers are far apart on values, said Raymond Torto, global chief economist at CB Richard Ellis Group Inc., the world’s biggest commercial property brokerage. ‘Fire Sale’ Prices “This is the big conundrum,” he said in an interview. “Just how much is out there at fire sale prices? And of course the fact that people believe and expect fire sale prices means nobody buys, which is another part of the problem.” Buyers are interested in acquiring prime properties that are fully occupied, he said. Instead many buildings for sale have a lot of empty space, he said. “People don’t want to sell unless it’s an extreme case, like Worldwide Plaza,” he said. Three private investment groups acquired the 47-story tower in Manhattan after Deutsche Bank AG seized the property from developer Harry Macklowe. The 1.8 million square-foot tower has about 700,000 empty square feet, one of the biggest spaces on the market in New York. Even relatively conservative buyers are getting caught by falling values, according to Fasulo. He cited 333 Bush St., a 43-story tower in downtown San Francisco, whose owners, Hines Interests and Sterling American Property Inc., plan to surrender the building to its lenders. The move came after the main tenant, the law firm Heller Ehrman LLP, filed for bankruptcy. ‘Prominent People’ The partnership paid $281 million for the skyscraper in 2007, near the top of the market. It’s “quite significant” that Hines and Sterling would find themselves having to give a building back, said Torto. “These are prominent people,” he said. “It’s not like they’re Joe Speculator.” Properties that were typically leveraged at 70 percent to 80 percent would have had tough times refinancing “even if prices held firm,” White wrote in the report. Few lenders are now willing to advance more than 50 percent to 60 percent of value in this market, he said. About $124 billion of commercial properties have fallen into default, foreclosure or bankruptcy since prices started falling, Real Capital said. Less than 10 percent of distressed properties have resolved their financing issues and lenders have been slow to take action against property owners. “The phrase ‘pretend & extend’ has recently entered the vernacular,” White wrote. >> live-montana.com