Friday, August 22, 2008

CRE: The Next Shoe to Drop?

As the value of home mortgages crumbles by the day, Wall Street has hoped that commercial real estate loans would stay clear of the storm.

But bankers believe the headwinds may be shifting, The New York Times says, after a large apartment complex in Harlem warned last week that it might not be able to make good on a $225 million mortgage payment by September.

“The fear is the next shoe to drop may be commercial real estate,” Jeffrey Harte, a banking analyst at Sandler O’Neil, told The Times. “When consumer credit goes south, commercial will follow.”

Source: Dealbook

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