Posted on Tuesday, April 21, 2009
$6 to $8 billion in CMBS money is coming due in the not to distant future mostly on hotel CMBS funds. Unless something chnages there is (a) no money out there to refinance these loans and (b) not enough flexiblity under most CMBS structures including REMICS trusts to modifify them in any meaningful way. Obviously having huge players like General Growth Properties and SImon take hits like this, along wiht the additions to unemployment and other consumption that woudl no doubt follow, is not going to help our nations recovery come any sooner and the investors and lenders of these companies. But perhaps even more important is the toll on both small and large business owners that disruption in their landlord's buisness may have and the impact of observing the fallout - vacant spaces, deterioriating shopping malls, resorts amd office buildings, will have on already fragile crucial consumer confidence.
A few months back the idea of bailing out commercial property managers being surfacing. At the time public sentiment opposed helping "rich commercial land owners." But as with ever tide we've sat out so far, this one seems to have shifted. As REIT money comes due there will no doubt be some commercial property owners deedm worthy of help and others not. And again we will all no doubt be baffled by who falls in whcih bucket.