Resurrection of confidence in economy - but will it last?

Jim Paulsen with Wells Fargo is the ultimate optimist who anticipates 3% economic growth this year and a definite turn around in 2012.


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$322B in Commercial Mortgages Mature in 2011

The saga continues with the banks hoarding all this maturing debt. Are they going too extend or restructure and continue to pretend? The excuse of allowing the market to correct itself is over. Why not put an RTC in place and get this stuff moving?

U.S. Hotel Buyers Lured Back

Prior to the recession, many buyers stepped back from U.S. hotels and resorts, but the recent rebound has brought back interested buyers as the hospitality sector once again promises high returns. KSL Capital LLC has finished raising a $2.1 billion fund targeting distressed resorts. Westbrook Partners has also bought hotel mortgages at a discount and seized control of eight high-end hotels, which include the Fairfax Embassy Row in Washington and the Westin here in San Francisco.

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Freddie Mac Announces K-702 Offering of K Certificates

Freddie Mac announced today its second offering of K certificates backed only by multifamily mortgarges with a 7 year term. They expect to offer approximately $1 billion in K-702 certificates. Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities and have already brought in 7 K-deals this year.

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Mortgage Shake-Up Proposed

Last Thursday, a California Republican and a Michigan Democrat unveiled legislation to replace Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees. Conservative Republicans want to advance bills to build a mostly private mortgage-finance system while Democrats say the government shouldn't walk away from the mortgage market, so this bill is seen as a compromise between the two. What do you think? Is the bill on the right track or is this really a terrible idea?

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What to do with $1.7 Trillion of Maturing Debt

Very interesting article focusing on what it’s going to take to deal with the maturing commercial mortgage debt: some $1.7 trillion between 2010 and 2015. The topic of discussion is also interestingly titled “Real Estate Markets 2011: What Factors Will Influence Your Decisions?” Stating that the availability of debt will be the biggest influence.

Looking from the trenches, it appears lenders are willing to extend with more time and more favorable loan terms. However, debt reduction and cram downs are becoming less common. Eventually there will be a need to "take the stuff off the books" but who knows when? It can't be too far away.

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Yields surge for Fannie and Freddie mortgage bonds

Financial markets support for Fannie and Freddie bonds is very good news for multi-family. The last thing we want is a pull back on future financing.

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Increase in Distressed CRE Mortgages

The number of distressed commercial real estate mortgages has increased by 10% to a total of $187.4 billion. However the velocity of distressed mortgages has slowed down, possilby due to lender's willingness to "extend and pretend." Is this a good thing or a bad thing? Read More