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Government Needs to Get More Serious

NEW YORK CITY-The Corus deal and DDR's issue of new CMBS show that Washington is smartening up, but more must be done, REBNY panelists said Tuesday.

By Paul Bubny | Updated on November 17, 2009

NEW YORK CITY-The news that Developers Diversified Realty Corp. is selling $400 million of new CMBS through TALF is an encouraging sign that Washington’s efforts to jump-start the economy are bearing some fruit, an all-star panel agreed Tuesday afternoon. The fact that new CMBS is being issued for the first time in more than a year “is in itself a breath of fresh air,” said panelist Jeffrey DeBoer. However, DeBoer, president and CEO of the Real Estate Roundtable, said the federal government needs to get more serious in dealing with the issues facing commercial real estate.

“We know there’s a tsunami approaching,” said panelist William Rudin, referring to the hundreds of billions of dollars in commercial loans maturing in the next few years. “The question is, how do we deal with it?” DeBoer said that Washington needs to figure out solutions to these challenges–not in the sense of providing another government-sponsored bailout, but in the sense of resolving the issues and moving on. He noted that while he doesn’t anticipate another RTC-like model coming along, the federal government is at least aware of the magnitude of the problem of loans that can’t be salvaged.

DeBoer and Rudin, president of Rudin Management Co., shared the stage with Richard LeFrak, chairman and CEO of the LeFrak Organization, during the panel discussion presented by the Real Estate Board of New York at the New York Hilton. All three panelists spoke of the opportunities as well as hurdles in the current environment.

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