Investors Show No Interest in Commercial Real Estate Loans

June 19, 2009

In an attempt to boost the economy, the federal government created a plan that would boost the availability of commercial real estate loans. However, unfortunately for the government, investors have shown little to no interest in the loans. A deadline had been set for Tuesday, but the Federal Reserve Bank of New York said that it had received not one investor request.

It was the plan that investors could use the money to buy newly issued securities; backed by commercial real estate loans- the government was counting on this to help prevent defaults and facilitate the sale of distressed properties.

The plan was part of a broader program, known as TALF (Term-Asset-Backed Securities Loan). This was intended to spark consumer and small business lending. Under this wide program, investors have requested billions of dollars worth of loans.

It is uncertain whether the deadline for commercial real estate loans will be extended or if the program will be dropped or re-vamped.