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Article: CRE Stress Another Test In Balancing Interests; Commercial real estate loans are viewed as a time bomb, but will stricter exams threaten the industry's - and the economy's - recovery?(Corporate & Institutional)(Industry overview)
- Article from:
- US Banker
- Article date:
- November 1, 2009
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Byline: John Engen
Pretty much everyone agrees the year ahead will be grim for banks with big commercial real estate loan books. The question is, will the medicine coming out of Washington cause more harm than good?
According to SNL Financial, delinquency rates on CRE loans, including construction and development, were running at 9.09 percent through the second quarter. Deutsche Bank Securities analyst Richard Parkus estimates that banks have $534 billion in C&D loans on their balance sheets, $220 billion in multifamily loans and another $1.1 trillion of "core" CRE loans, tied to seasoned office, hotel, retail and other properties. With vacancy rates ...