Finance

Commercial and multi-family loan delinquencies increased during the fourth quarter of 2008, as the contracting economy and continuing credit crisis stressed property fundamentals, according to the “Commercial/Multi-family Delinquency Report” released by the Mortgage Bankers Association.The report found that the 30+ day delinquency rate on loans held in CMBS rose 0.54 percentage points to 1.17 percent. The 60+ day delinquency rate on loans held in life insurance company portfolios rose 0.01 percentage points to 0.07 percent. The 60+ day delinquency rate on multi-family loans held or insured by Fannie Mae rose 0.14 percentage points to 0.30 percent. The 90+ day delinquency…

As the recession grinds on, the retail world seems to be dividing more clearly than ever into winners and losers. Or maybe that should be a three-part division: über-winner Wal-Mart, relative winners and serious losers. As reported previously by CPN, Circuit City closed its doors forever last weekend, and thus became an example of a major loser. But does that make its rival and one-time electronics upstart Best Buy a winner? Wall Street, at least for the moment, thinks so. Best Buy shares, enjoying various upgrades by rating agencies, far outpaced the general upward movement of share prices on Tuesday…

Will TALF–the Term Asset-Backed Securities Loan Facility, in case anyone’s forgotten–bring the securitization of loans, especially non-agency RMBS and CMBS, back to life in any meaningful way? The program will get under way on March 25, and Wall Street is keeping a close eye it. And so are players in some real estate niches that used to obtain much of their capital from securitizations.”Over 70 percent of loans in the tenant-in-common business were originated through securitized product, and when that evaporated last year, it created a great hardship for TICs,” Bill Winn, president of the Tenant-in-Common Association and president of…

“Stay alive till ’95” was a mantra for beleaguered commercial real estate interests back in the early ’90s, when various noxious economic ingredients made an ill stew for the industry. What’s a good mantra for today? Hard to say, since the noxious ingredients are a little different this time, and there’s also some feeling in the industry that the other shoe has yet to drop. The Federal Reserve’s Beige Book, which was released Wednesday, attested to the uncertainty. The report from the Sixth District (headquartered in Atlanta), for instance, noted that “commercial real estate reports were decidedly more negative than…

The prospect of un-refinanceable debt has yet another commercial property company on thin ice, in this case McLean, Va.-based Sunrise Senior Living. The assisted- and independent-living specialist not only lost $305.6 million in the fourth quarter of 2008 (and $439.2 million for all of 2008), it’s also facing an imminent–end of March–deadline on renegotiating about $95 million in debt and $24.4 million in outstanding letters of credit.In particular, the former Fountains portfolio, some 420 properties that Sunrise bought in 2005, is causing problems for the company. “The operating performance of these communities continued to deteriorate in the fourth quarter of…

“Too big to fail” has new meaning these days in the context of the never-ending black hole known as American International Group. The “too big” in this case is the insurance giant’s giant losses, which totaled $61.7 billion in 4Q08, a record. Just to give a little context, that much money is roughly equal to or greater than the gross state products of 12 states of the union–Hawaii, for instance, had a gross state product of $61.5 billion in 2007, according to the U.S. Bureau of Economic Analysis.“Public ownership of financial institutions is not a policy goal and, to the…

Warren Buffet’s annual letter to Berkshire Hathaway, published over the weekend, contains a number of interesting statements besides his opinion that the economy is in “shambles” and the hard numbers that show 2008 to have been the worst ever for his company. The letter will likely be long remembered for characterizing the systemic failure among large financial institutions like this: “Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.” Or, to put it another way, if you’re going to fail, fail big, otherwise the government isn’t going to bail you out. Another pithy observation from the Oracle of…

Every federal budget, even a proposed one, is like a big layered onion, with plenty for every interest group of every kind to complain about. President Obama’s first proposed budget in particular, since much of it represents a considerable departure from previous budgets, is likely to ruffle more than a few feathers. The man did promise change, after all. The National Association of Realtors is already not too happy about the suggestion, tucked away within the onion, that the federal tax code be charged when it comes to the mortgage interest deductions. The plan is to reduce the value of…

The equity markets yo-yoed back upward again after Federal Reserve Chairman Ben Bernanke (pictured) went to great lengths to assure Congress, and indirectly investors (who are traditionally a nervous lot) that the United States isn’t going to nationalize its financial system. He didn’t mention that the government might buy into big banks more extensively than before–40 percent is the figure usually given for Citigroup, for instance–but that isn’t nationalization. Maybe that counts as “sort of” nationalization. Some observers think the government is, despite assorted denials, on track to de facto nationalization. “The Obama administration is on track to nationalize the…

Don’t worry, we’re working on the problem, and don’t call it nationalization, please, said the most important U.S. financial regulators in a rare–unprecedented, in fact–joint statement on Monday. Actually, the text of the statement by the U.S. Treasury Department, the Federal Deposit Insurance Corp., the office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve went in part like this: “The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses.” How…