The government’s soup line is getting longer: Property developers are now grubbing for a piece of bailout pie. The Wall Street Journal reports that developers are warning “that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies.” A recent letter to Henry Paulson claimed “Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans. … For many borrowers, [credit] simply is not available.” The industry is asking for admittance to the $200 billion government program originally intended to fix the market for car, student and credit-card debts. The program is intended to help investors purchase securities backed by these assets. The inclusion of commercial developers into the program might make banks more willing to lend to them, as they’d be able to securitize their loans and pass them on to investors.
Read it at The Wall Street Journal (subscription required)
