Brookdale Senior Living has put a bow on a $438 million mortgage from Oak Grove Capital and paid down two chunks of debt that would have come due next February and August. The loan is for $20 million more than the company had estimated but its interest rate also is a bit higher than had been expected.
"Though longer leases on office properties have historically mitigated sharp changes in performance, continued job losses are expected to increase pressure on the office sector," said Managing Director and U.S. CMBS group head, Susan Merrick. "With the looming possibility of leases expiring on space under-utilized by companies that have downsized, office performance may not reach a trough for a few years."A page from First Horizon's recently updated investor presentation provides a microcosmic view of how the property market is getting sicker. (Go to page 19.) more CRE loans on their books as a percentage of their capital — although many bankers contend that this statistic is skewed by the inclusion of owner-occupied property loans, which they treat as more conventional C&I holdings. SEE ALSO: Clusterstock's concise, but detailed account of how we got here. For all the doom and gloom, it ends on a hopeful note (that I think isn't meant to be ironic.)
Fortunately, this time around we have an advantage. We know how a contained credit problem can morph into a monster that destroys financial institutions and cripples the economy. Living through the housing bust may make us better able to cope with the commercial real estate bust. At least, it's pretty to think so.