It has been widely reported this morning that last night (Sunday 10/25/09) one America’s largest commercial real estate lenders filed for Chapter 11 bankruptcy protection. Chapter 11 is a reorganization filing designed to allow business to continue to operate while they shed debt and evaluate their business. What of other commercial lenders?
The BankProspector is showing that as of the last report there were 2961 banks reporting a little less than $5Billion in commercial REO. In the same report 4402 banks reported nearly $28 Billion in commercial real estate nonperforming loans (nonaccrual).
The full scope of the distress in the commercial real estate sector is becoming more clear as each day passes. One thing seems for certain, the next 12-18 months are going to be very difficult times for banks that were too aggressive in their commercial real estate lending and owners with highly leverage commercial real estate holdings. This combination will undoubtedly translate into significant buying opportunities for well positioned investors who have conserved cash.
Capmark Financial Group’s world headquarters is in Horsham, Pennsylvania.