Elizabeth Warren, head of the Congressional Oversight Panel for TARP, said in her monthly report that it would be nice if the government would wake up and do something about the commercial real estate losses yet to come, ’cause until they do, “the crisis will not end.” The “CRE is the next shit to hit the fan” lullaby has been going on for about two years now and despite a lukewarm consensus that something, anything, has to be done, seems like no one has a real clue how to go about it, or dare we say, give two cents about it?
“The most serious wave of commercial real estate difficulties is just now beginning. Experts believe that the volume of bank write-downs and potential loan defaults may swell in the coming years, in the absence of a strong immediate improvement in the economy.”
Riiiight. Given that the unemployment rate is not likely to decrease anytime soon, that vacancy rates are increasing, that the economy’s fundamentals remain weak and that between 2010 and 2014, about $1.4 trillion in CRE loans will reach the end of their terms, it’s totally fine to write a 189-page exposé on the subject, but solutions anyone?
