Those of us in the real estate industry have been aware that the problems facing it aren’t just confined to residential markets. According to a story on Globest, Congress is finally waking up to the fact that the commercial industry is in trouble as well. Federal Deposit Insurance Corp president Sheila Blair acknowledged as much on a recent television interview.
The real question is will the government act swiftly enough. Outrage over the mishandling of tarp funds put a damper on the Fed’s will to act for a moment. However, recent successes like the Cash for Clunkers program may motivate the Fed to step in sooner. The other looming question is how do they intend to pay for a bailout if one occurs.
New Jersey Senator Robert Menendez sent a letter Fed chairman Ben Bernake and Secretary of the Treasure Timothy Geithner requesting that they take forceful measures to address the declining commercial market. Considering the huge amount of loans coming due in 2012 for property worth a fraction of the debt, I don’t see how they can’t take immediate action of some sor.