Thursday, December 24, 2009, 3:56PM ET - U.S. Markets closed early today.
It's almost like there's a carnival barker standing outside Congress shouting: Bailouts, bailouts, step right up and get yer bailouts."
First it was the banks and brokers, then came the automakers and homebuilders. And now commercial real estate developers are lining up for some government largess, according to The Wall Street Journal.
There's good reason commercial real estate developers are looking for a bailout: About $530 billion of commercial mortgages are coming up for refinancing in the next three years, the WSJ reports.
The refinancing isn't a surprise as these loans were structured to refinance after 5 to 10 years with a big balloon payment at the end. What has caught developers off guard is the stress in the credit markets and the likelihood they won't be able to get nearly enough financing when the loans are set to expire.
Certainly, the developers are suffering because of the credit crunch but, just like the automakers and homebuilders, they apparently never considered such an environment and vastly overbuilt during the past cycle. Developers just assumed they'd always be able to access the debt markets to roll over the financing.
The industry is asking commercial real estate loans be included in the $200 billion Fed program recently established to buy consumer loans. With that plus the second $350 billion TARP fund yet to be allocated, there probably will be a handout for commercial developers.
Will the bailout madness never end?
Commercial developers and banks are different. Can I ask Uncle Sam to take over my credit cards, auto loan and mortgage? Where is my bailout, then?
Probably why stooge Paulson (Shemp) decided to "change" taxpayer bailout of buying toxic assets after consulting with stooge Bernanke (Moe) and main stooge Bush (Curly). Buying those would have been utterly pointless since the real home prices crash won't get here until late 2009 and 2010 when all the other teaser rates that were written during the false peak reset, and then all of those poor Saps will start the second wave of the housing crash, which by the way will be MUCH worse than the first one.
When Los Angeles and/or San Francisco shake to the ground, as they must, those extra unfilled buildings back East will be worth a lot more.
I was a tried-and-true Bush backer until he bailed out the auto industry last week. He's more concerned about salvaging a legacy now that doing what's right. Way to screw up! Try to do what's right for the last 8 years (no matter what people said) but then blow it all at the very end.
Let the commercial market fall, we have too many strip malls as it is. The commercial developer has the same mentality of those who built the Corn Palace in Nebraska, "IF YOU BUILD IT THEY WILL COME". That may have worked in Nebraska, however excess malls are not needed or wanted. By the by, I've driven by the Corn Palace dozens of times and never stopped in. The same is true for the malls.
LIARS. THERE IS NO OVER SUPPLY OF ANYTHING. THE PRICES ARE TOOOOOOO HIGH !!!!
Thomas Friedman's family shouldn't get a dime. Let him turn a corner every six months until he starves. No government bailouts for those who helped Bush spend us into slavery to foreign governments who are lending the US money to do these bailouts. Let those who supported this war pay for it. I certainly didn't.
/*/*/*/*/*/*/ The Revolution has already started: infowars.com /*/*/*/*/*/*/
We learned from the S & L bailout that these bailouts just line the pockets of those involved. Most real Americans were very anti-bailout and vowed never to allow any more bailouts after the S & L bailout. What happened? Paulson manic crazy bailout. Stop the madness! No bailout of real estate developers: that is really ridiculous ! We'll be bailing out Wal-Mart soon enough I'm sure if this line of thinking continues in the government.
jolly oll pirate - If you've driven by the Corn Palace dozens of times, you might have realized that you were in South Dakota, not Nebraska.
This administration is bent on sucking every dollar out of the hands of the public before they leave. Hopefully, the next administration will be more honest and try to help the average person. Obama is inheriting quite a number of problems and falsehoods that have been shoved down our throats. I would like to see him declare truths about what we are really facing and solutions to our problems. He also has to struggle against dishonest or ignorant Democrats that come with the job.
Now that the Rich is getting more and more tax dollar. It is perfect reason to increase the estates tax and raise the rich tax 50%, and no deduction loopholes.
let americans decide what is best for them. give us the bailout monies and we will decide who will be here for tomorrow. i guess the only problem with that would be a developing scam artist bubble
These politicians will get some of the money by bailing out these clowns. They will all geting rich and taxpayers will end up paying for it.
no more bailouts. When will it stop? I heard that the country would get a greater stimulus if the $750 billion were given to taxpayers. Not sure if the figures match but that is enough to give every taxpayer $500,000. We are responsible for 70% of the economic activity. Give us the money. This will allow people to pay off their homes and not risk losing it. this would allow people to pay off their debts (which we have tons of). This would allow people to buy homes, new cars, flat screen TV's, stocks, etc. That would save the economy. We can stimulate the economy more with that money than auto makers, banks, brokers, commercial developers. Giving me a $1,600 stimulus check is a joke. Write to your congressmen and Senators. Demand our bailout.
There is no way commercial RE developers should be bailed out. In all of the other bailouts, there was a risk to the economy. If the banks fail, there would be no credit. If the auto industry fails, it means 3M jobs plus. But foreclosures in CRE would have no negative effect on the economy. It won't make any difference whether a building is owned by the bank, resold to a new owner, or whether it stays with the current owner. If the banks are forced to make major writedowns because there was not enough equity in the first place and/or because there were no personal guarantees (as would normally be the case with new construction) then we might need to re-evaluate but the taxpayer should not pay simply to keep these buildings under present ownership. Btw, my family is in the reale estate business albeit most of our buildings are owned over 10 years and have relatively low leverage.
No more bailouts, auction property off raise capital and allow free enterprise. Stop allowing big money to create monopolies. Stop big and national builders as well. Once they get out of the " create a monopoly " state of mind all things get better, operate on profits, not loans and cash flow.
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__A_YAHOO_USER__ - Monday December 22, 2008 12:20PM EST
To Bil them -out.......Three things to consider if our taxes are involved... 1. Be wise if no have a common sense....comon sense.. commonse sense. 2.There are wide range of asset class of companies and investment provider......Hence commercial properties are involved.My advice before committing the sensible people monies is...Consider divsesification, diversification,and diversification the best defense is diversification and location location loction of the properties......yes Vulnerabilities will remain and still remain but, explosure to risk is reduced and the chance to gain is great if not strong..... 3. The trouble is who will handle it, who is the man who will manage it....He must have abililt, flexibility, hardworking, not sleeping,but most of all common sense..I do not see the man or woman who will be capable with that talent......I just hope, they will find a better if not best.....If they do....success in certain not far in the future....It up to them if they will do my simple remainder.