SHOULD THERE BE ANOTHER RTC?

Last week's GlobeSt.com Quick Poll asked readers if there should be another Resolution Trust Corp. similar to what was created in the early 1990s. A total of 59% of voters responded that there should be another RTC. Howard Taft, managing director for the Miami office of Cohen Financial, tells GlobeSt.com what he thinks about the creation of a new RTC relating to commercial properties.

"I think it's a little early to decide if we need another RTC. We've probably got to give the market another six months into 2009 to see how refinancings are being handled and what amount of those rollovers are under water.

"In that time, the retailers will know which companies are going to go bankrupt. We'll also see what will happen with tightened underwriting criteria for lenders, with raised cap rates, high TI and leasing rollover requirements with approximately 65% loan to value. Billions of dollars in loans that are coming due in 2009 could be under water, and I think that's going to be the next acid test as to who needs to be bailed out.