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Thursday, 15 April 2010 10:11 |
"In the fourth quarter alone, the nation's small banks cut the total
outstanding balance of commercial real estate construction and land loans by
about 13%, while large banks with assets of $100 billion or more only trimmed
back by about 4%," says Matt Anderson, Managing Director for Foresight.
The contrast in the outstanding balance of construction and land loans is
even greater when comparing the fourth quarter of 2008 to the fourth quarter
of 2009. Small banks held $121.7 billion and $83.4 billion respectively, a
31.5% decline over one year. "Given that there's not much in the
way of other financing out there right now, to the extent that they're
shedding exposure, it's more through selling off the loans to someone else or
potentially through foreclosures," says Anderson. The buyers of this
debt have generally been private equity players that want to expand into
commercial real estate, particularly if there's a discount
involved. However, Anderson points out that many small banks claim the
cuts on the sales haven't been as severe as they had originally
anticipated. (Source: NREI)
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