The Commercial Real Estate Time Bomb – Podcast

Radio Free Wall Street 8/10/10- Russ Winter and Lee Adler discuss the little understood commercial real estate time bomb, including the timing of the explosion, and ways to play it. Follow along with this post on Russ’s blog.

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3 comments for “The Commercial Real Estate Time Bomb – Podcast

  1. glenn
    August 11, 2010 at 2:02 pm

    Hey Guys – partial interest only does not imply negative amortization…typical structure would be 10yr Balloon loan that is 5 years of interest only, followed by 5 years of interest + principal (usually based on 30yr/25yr amortization schedule), then a marvelous balloon payment due at the 10yr maturity date…

  2. Russ Winter
    August 13, 2010 at 1:09 pm

    Moody projections on CMBS, key take aways. The debt liquidation figure is a drop in the bucket for a $3.4 trillion debt load, and is hugely negative, This signals that the banks are getting little in increased equity from borrowers:

    Analysts said $3.2bn of commercial loan debt was liquidated between Jan. 1 and June 15, including $731m in March and another $743m in April — which represents the highest-monthly total ever, according to Moody’s. For the entire same period a year ago, a mere $600m of loans were liquidated.

    Senior analyst Keith Banhazl said he wouldn’t be surprised if the agency’s next quarterly report shows a monthly amount of liquidated loans that’s even higher than April.

    The overall weighted average loss severity rate for liquidated loans at the end of the second quarter increased to 35.4% from 34% in the first quarter. And analysts expect the rate to continue to climb as more loans originated between 2006 and 2008 liquidate.

  3. August 15, 2010 at 9:21 am


    Thanks for the clarification. I’ve been out of that business for too long!

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