Wall St. Turbulence Ripples Through CRE

NEW YORK CITY-The turmoil in the US’s financial system, precipitated by the bankruptcy of Lehman Brothers , and the purchase of Merrill Lynch by Bank of America, clearly will send aftershocks throughout the economy. However, sources say with negatives such as an even tighter credit market, higher spreads and stagnant capital markets, sometimes, disruptions like these can create opportunity.

An anonymous industry source tells GlobeSt.com that although the positives are hard to see with significant job loss, “I think well capitalized regional and super-regional investment banks will pick up some of the slack in terms of services provided.” The source notes that although it is not good for the investment banking industry, it is “probably necessary, but a net negative.”

According to the latest Commercial Real Estate Outlook of the National Association of Realtors, commercial real estate is being pinched by Wall Street woes. Patricia Nooney, chair of the Realtors Commercial Alliance Committee, says that “we are in an unusual situation where transactions are being curtailed not for lack of demand, but for serious challenges in obtaining financing.”