Commercial Property News - October 2008 - (Page 20)

FINANCE INDUSTRY PULSE At Any Cost Flood of Non-Performing-Loan Sales Looms as Banks Seek Health By Brad Berton hen the Federal Deposit Insurance unfinished lots, unsold homes and condomini- le so far will develop into a flood over the next Corp. in late August subleased another ums and the like.And maybe just as predictably, six to nine months,” related Rick Williamson, prin125,000 square feet on four more these have been tough sells, as the list of deep- cipal for WLJ Partners.Williamson, who spent the floors at Energy Plaza, Downtown Dallas landpocketed buyer groups willing to scoop up the past two decades buying loan portfolios and lords were encouraged to see another chunk of assets and wait out tattered residential markets resolving distressed assets on behalf of bank holdvacant space absorbed. But the bank-deposit has remained short, despite discounts that have ing company FBOP Corp., teamed with secondinsurer’s expanding footprint also sounded a fore- amounted to perhaps two-thirds or more of out- ary commercial mortgage market veterans Eileen boding call for an ever-burgeoning roster of finan- standing-principal balances. Lyons and Paul Jones to form WLJ Partners cially distressed commerto acquire distressed DAMSELS IN DISTRESS cial property owners income-property debt. (U.S. commercial banks’ cumulative distressed assets) around the country. The late-August enJune 30, 2007 Sept. 30, 2007 Dec. 31, 2007 March 31, 2008 June 30, 2008 Not only is the FDIC gagement of hyperactive $72.1B $76.7B $89.0B $103.0B $118.0B selling off non-perform- Loan-Loss Allowance loan-sale advisor First $6.8B $8.8B $9.8B $12.1B $14.3B ing loans to vulturistic in- Other Real Estate Owned Financial Network Inc. $65.3B $86.1B $106.9B $124.9B vestors as federal regula- Noncurrent Loans & Leases $53.9B by an unidentified bank tors take over more and Source: Federal Deposit Insurance Corp. hints at the kinds of more insolvent banks, a assets Williamson’s comgrowing list of banks are also striving to shed But opportunistic income-property debt spe- pany expects to bid on increasingly in coming stressed and distressed commercial mortgages cialists are eagerly anticipating that banks, and in months. The $75 million-plus portfolio that and related assets, including non-accruing con- some cases receivers, are also about to start First Financial is marketing includes more than struction loans and repossessed properties. aggressively selling portfolios of subperforming 200 non-performing loans that are secured by Much of the distressed-asset disposition activ- and non-performing loans secured by existing office, retail, multi-family, single-family and land ity to date has predictably pertained to the resi- income properties. assets in the Southeast, Midwest and Southwest. “I’m expecting that what has been just a trickdential sector: debt secured by finished and The FDIC has likewise tapped First Financial, W 20 COMMERCIAL PROPERTY NEWS • October 2008 • www.cpnonline.com http://www.jaxdevelopment.org http://www.cpnonline.com

Table of Contents for the Digital Edition of Commercial Property News - October 2008

CPN - October 2008
Contents
Starting Line
Industrial
Data/Analysis
Conferences
Chicago Market Profile
Finance
International
Title Insurance
Brokerage
Corporate Report

Commercial Property News - October 2008