Wednesday, September 16, 2009

Capmark’s Troubles Highlight Plight of Many CRE Lenders

With more than $1.6 billion in second-quarter losses and plans to sell off its most viable business operations, Capmark Financial Group Inc. provides a painful example of the turmoil plaguing many large lenders to the commercial real estate industry.

In its second-quarter report published earlier this month, the Horsham, Pa.-based commercial real estate finance company disclosed an agreement to sell its mortgage banking origination and servicing businesses to Berkadia III, a partnership owned by Warren Buffett’s Berkshire Hathaway Inc., and Leucadia National Corp., for $450 million. Later that week, rating agencies lowered Capmark’s credit ratings to reflect the company’s likelihood of defaulting on its cumbersome debt. -Matt Hudgins