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National Real Estate Organizations Address Treasury on Credit Crisis
On November 26, 12 national real estate associations, including BOMA International, sent a joint letter to Treasury Secretary Henry Paulson and other key leaders detailing the urgency of the credit crisis and lack of confidence in the financial markets. In addition, the letter highlights anticipated problems that will result as more than $400 billion of secured and unsecured debt matures before the end of 2009. The letter also recommends the Treasury Department and Federal Reserve take several actions to stem the crisis, including the extension of the Term Asset-Backed Securities Loan Facility to guarantee, finance or purchase highly rated, asset-backed securities collateralized by newly or recently originated commercial real estate mortgages.
“In the midst of historically moderate vacancy rates, low loan delinquency rates and an abundance of well-performing, cash-flowing properties, credit available to commercial real estate is now in exceedingly short supply,” states the letter. “For many borrowers, it simply is not available. This is a problem that potentially will affect six trillion dollars of commercial real estate, which is financed in part through more than three trillion dollars of debt. Jobs, small businesses, retirement savings and local government tax revenues are all at stake.” Read the letter to Treasury Secretary Henry Paulson.