The Federal Reserve, understandably, dislikes long-term loans. Tightening becomes difficult if you cannot call back capital quickly. Real-estate interests don't want to hear it, and have been calling for modifications to the typical three year terms, extending them out to five. The Fed is likely to give in. Shackled though they may be when it comes to monetary policy, inflation handcuffs are a walk in the park compared to widespread defaults.
Real-estate investors, however, said the longer-term debt is critical to saving the commercial real-estate business, which faces a record amount of debt coming due in the next three years. Industry observers are expecting the delinquency rate to double by the end of this year and go higher next year. Problems could be magnified if the credit drought continues and owners of even healthy properties are unable to refinance.
Real-Estate Industry Pushes Fed to Lengthen TALF Terms [The Wall Street Journal]