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FactSet's podcasts asks how real estate refinancing can be accomplished given the state of the credit markets
Thursday, July 23, 2009
In our podcast, Michael Grupe, Executive Vice President of Research and Investor Outreach for NAREIT, explains how the daunting process of refinancing commercial real estate loans will be accomplished. Is the government the only answer?
Our second podcast in an ongoing series featuring NAREIT asks Michael Grupe who will refinance the billions of dollars in outstanding real estate loans? Grupe addresses how new government programs, especially the Term Asset-Backed Securities Loan Facility (or TALF) program, can help restart the lending process.
Grupe discusses when the program will be fully functional. He also comments on how commercial real estate will be affected as the slow process of refinancing begins. Grupe explains how only the functional outstanding loans will be refinanced by programs such as the TALF, meaning there will undoubtedly be defaults and losses, but that the strongest properties will remain.
"The TALF program is not intended to step in and save people from bad judgement or to provide them with supplemental equity....By and large most commercial real estate across the country is still performing, vacancy rates may be somewhat higher, rents may be somewhat lower, NOI may be somewhat weaker...but most properties continue to be performing and most loans on those properties continue to be serviced."
Grupe emphasizes that these performing loans will benefit from the TALF program.
Listen to the full interview to hear Grupe’s comments on the way refinancing will occur moving forward and how other additional government programs can help the process. You can also listen to the podcast in iTunes. You can also read a full transcript of the call.
FactSet’s goal is to provide our users and the public with perspectives and insights into the topics that drive financial markets. Through our podcast series, we offer a range of interviews with experts both from inside our company and from among our clients and partners.
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