On January 27, 2010, NMHC/NAA testified on the state of commercial real estate lending before the Congressional Oversight Panel’s (COP). The COP, chaired by Elizabeth Warren, oversees the $700 billion Troubled Asset Relief Program (TARP).
Testifying on our behalf, David Stockert, president and CEO of Post Properties, told the panel that apartment property values have declined by more than 30%, and transaction volume has plummeted from $100 billion to around $14 billion in just two years.
He noted that while Fannie Mae and Freddie Mac have been a critical liquidity backstop for the apartment industry, they are not sufficient to meet the sector's capital needs. Reestablishing a viable CMBS market is critical.
He also urged the Treasury Department to extend the Term Asset-Backed Securities Loan Facility (TALF) program through 2010.
Finally, Stockert addressed the use of TARP funds to support distressed apartments. He suggested possible uses of TARP funds including providing insurance to lenders who extend current loans or providing gap financing on newly refinanced loans through subordinated debt, cash-flow mortgages or grants. He stressed that any TARP program should not create uncertainty in the capital markets about potential future government intervention in the contractual and legal chain of ownership.
The field hearing took place in Atlanta, GA.
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