More Losses Predicted for Commercial Market
Ranked among the biggest U.S. commercial real estate lenders by Moody’s Investors Service, Capmark Financial Group Inc. recorded a $1.6 billion quarterly loss and hinted at a possible Chapter 11 bankruptcy filing.
The Pennsylvania-based firm’s possible failure may signal a new wave of commercial property losses for banks.
Capmark has seen tough times, as the default rate on commercial mortgages held by U.S. banks has more than doubled to the highest level in 15 years.
Sam Chandan, chief economist at Real Estate Econometrics LLC, warns: “We haven’t really experienced the full extent of the distress. When you look at community banks and some smaller regional banks, they tend to have a far greater concentration in terms of their exposure to commercial real estate.”
Source: Linda Shen, Bloomberg (09/04/09)
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