As Banks used $350 Billion of the $700 Billion Bailout Fund, as American Express and Discover Card became banks, now Commercial Developers want piece of the pie also.
From Yahoo Finance: Line for Bailouts Grows: Commercial Developers Want Govt. Aid, Too
First it was the banks and brokers, then came the automakers and homebuilders. And now commercial real estate developers are lining up for some government largess.
There's good reason commercial real estate developers are looking for a bailout: About $530 billion of commercial mortgages are coming up for refinancing in the next three years, with about $160 billion maturing in the next year.
The refinancing isn't a surprise as these loans were structured to refinance after 5 to 10 years with a big balloon payment at the end. What has caught developers off guard is the stress in the credit markets and the likelihood they won't be able to get nearly enough financing when the loans are set to expire. The report said that delinquencies on commercial mortgages jumped to 0.96% in November, up from a 0.62% rate in September.
The industry is asking commercial real estate loans be included in the $200 Billion Fed program recently established to buy consumer loans. With that plus the second $350 billion TARP fund yet to be allocated, there probably will be a handout for commercial developers.
Will the bailout madness ever end?
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