CNBC: The Fed's Toxic Avenger

Trepp Sr. VP Tom Fink discusses what the Fed is doing to deal with the economy and head off a looming problem with commercial real estate, including Peter Cooper Village in NYC.

Worst Than a Drug Dealer

One of my favorite scenes from The Wire:

Winners in The GGP Bankruptcy

Mostly hedge funds, that bought GGP debt and equities at significantly distressed levels. According to FT:

Hedge funds and other investors now stand to make billions of dollars from their holdings in bankrupt US mall owner General Growth Properties, underscoring the extent of the recent rebound in financial markets, people familiar with the matter say.

Among the biggest potential winners is William Ackman’s Pershing Square Capital Management, which is sitting on a paper profit of more than $800m on investments in the debt and equity of GGP, according to people familiar with Mr Ackman’s fund. Other investors that stand to make big profits on holdings in the high-profile retail property owner include Centerbridge Partners, Elliott Associates, Goldman Sachs, John Paulson’s Paulson & Co and York Capital, the people said.

Harvey Green on CNBC

Weekend Roundup

U.S. Commercial Property Sales to Drop to $49 Billion ("Bloomberg")

A Potential Catalyst to Stimulate 2010 Property Sales Activity ("Street Wise")

Commercial Real Estate Will Collapse ("Forbes")

Zell: Predictions of commercial crash 'greatly exaggerated' ("Pension&Investments")

Slow Into Real Estate ("Forbes")

Developers Diversified deal ends CMBS drought ("Reuters")

BofA markets $460 mln Fortress CMBS without Fed aid ("Reuters")

Despite Slower Deal Volume, Commercial Banks Continue to Lend, Reis Reports ("NREI")

FDIC Seen Rejiggering Structured Offerings ("crenews.com")

FDIC Loan-Recovery Rate Falls to 29.6 Percent ("crenews.com")

Simon eyes General Growth’s mall portfolio ("FT")

General Growth Clinches Mortgage Pact ("WSJ")

Morgan Stanley Ends Costly Crescent Phase ("WSJ")

Foreclosure Spat Brews in Chicago ("WSJ")

Is 2011 Too Soon For Multifamily Prices To Hit Rock Bottom? ("Multi-family Investor")

Marriott/Ritz Reorganization Is Smart Move ("Front Desk")

Investors Bullish on Health Care Real Estate as Reform Showdown Draws Closer ("CoStar")

Meredith Whitney on CNBC

Some refreshing comments from Meredith Whitney.

Bernanke on Commercial Real Estate

From FRB:

While I am on the topic of bank lending, I would like to add a few words about commercial real estate (CRE). Demand for commercial property has dropped as the economy has weakened, leading to significant declines in property values, increased vacancy rates, and falling rents. These poor fundamentals have caused a sharp deterioration in the credit quality of CRE loans on banks' books and of the loans that back commercial mortgage-backed securities (CMBS). Pressures may be particularly acute at smaller regional and community banks that entered the crisis with high concentrations of CRE loans. In response, banks have been reducing their exposure to these loans quite rapidly in recent months. Meanwhile, the market for securitizations backed by these loans remains all but closed. With nearly $500 billion of CRE loans scheduled to mature annually over the next few years, the performance of this sector depends critically on the ability of borrowers to refinance many of those loans. Especially if CMBS financing remains unavailable, banks will face the tough decision of whether to roll over maturing debt or to foreclose.

Recognizing the importance of this sector for the economic recovery, the Federal Reserve has extended the TALF programs for existing CMBS through March 2010 and newly structured CMBS through June. Moreover, the banking agencies recently encouraged banks to work with their creditworthy borrowers to restructure troubled CRE loans in a prudent manner, and reminded examiners that--absent other adverse factors--a loan should not be classified as impaired based solely on a decline in collateral value.

Randall Zisler: Commercial Property Prices May Fall 20% More

Randall Zisler is CEO of Zisler Capital Partners LLC.

William Mack: Commercial Real Estate: An Orderly Massacre?