Another wave of CRE handwringing

By Geert De Lombaerde Posted on November 17, 2009 at 8:00 am

If you’re looking for even the slightest bit of optimism on the commercial real estate sector, you’re very much in the wrong spot. Fitch Ratings says the delinquency rate on office-building loans rose by a fifth in October.

“Though longer leases on office properties have historically mitigated sharp changes in performance, continued job losses are expected to increase pressure on the office sector,” said Managing Director and U.S. CMBS group head, Susan Merrick. “With the looming possibility of leases expiring on space under-utilized by companies that have downsized, office performance may not reach a trough for a few years.”

A page from First Horizon’s recently updated investor presentation provides a microcosmic view of how the property market is getting sicker. (Go to page 19.)

Worryingly, regional banks as a whole have a lot more CRE loans on their books as a percentage of their capital — although many bankers contend that this statistic is skewed by the inclusion of owner-occupied property loans, which they treat as more conventional C&I holdings.

SEE ALSO: Clusterstock’s concise, but detailed account of how we got here. For all the doom and gloom, it ends on a hopeful note (that I think isn’t meant to be ironic.)

Fortunately, this time around we have an advantage. We know how a contained credit problem can morph into a monster that destroys financial institutions and cripples the economy. Living through the housing bust may make us better able to cope with the commercial real estate bust. At least, it’s pretty to think so.

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Tags: Clusterstock, commercial mortgage-backed securities, commercial mortgages, commercial real estate, financial regulation, First Horizon National Corp., Fitch Ratings, office space  

Local lender funds East Tenn. nursing home

By Geert De Lombaerde Posted on August 24, 2009 at 8:23 am

The Nashville outpost of Deutsche Bank Berkshire Mortgage has arranged funding for Trinity Senior Living to build its third nursing home in the Knoxville area.

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Tags: commercial mortgages, Deutsche Bank Berkshire Mortgage Inc., Knoxville, lending, senior housing and assisted living, specialty lending, Trinity Senior Living Inc.  

NHI in Minnesota deal

By Geert De Lombaerde Posted on June 15, 2009 at 7:34 am

The Murfreesboro-based REIT (Ticker: NHI) has acquired the loan on an assisted-living facility for a discounted price.

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Tags: acquisitions, commercial mortgages, Minnesota, National Health Investors Inc., real estate investment trusts