Property Developers Request Bailout: Report
Some of the biggest U.S. property developers are asking for government money in the face of $160 billion in maturing commercial mortgages next year, the Wall Street Journal reported Monday.
About $530 billion in commercial mortgages are due for refinancing over the next three years, with $160 billion due for payment next year, according to Foresight Analytics, the Journal reported.
And with credit hard to come by and cash in commercial property drying up, companies want government assistance.
Unlike home mortgages, commercial mortgages typically run for 10 years at most and have big cash payments due at maturation, the paper said.
"Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans," a dozen real-estate trade groups wrote in a letter to Treasury Secretary Henry Paulson, according to the Journal. "For many borrowers, (credit) simply is not available."
The industry is asking to be included in the government's new $200 billion loan program intended to salvage the market for car loans, student loans and credit-card debt, the paper said.