SOURCE: International Finance Partners

June 22, 2010 17:11 ET

Private Commercial Real Estate Lending Company Steps in to Bail Out Banks When the Government Can't

International Finance Partners, a Private Commercial Real Estate Financing Company, Says It Is Stepping in to Bail Out the Most Troubled U.S. Banks

BOULDER, CO--(Marketwire - June 22, 2010) -  International Finance Partners, America's best source of private financing for commercial real estate properties in distress, announced today that with the tidal wave of commercial property foreclosures sweeping the nation, it is stepping in to help bail out banks and commercial real estate owners from their problem properties.

According to its Managing Director, Brad Wozny, "Everyone's aware that there is a tsunami of commercial real estate loans coming due, and also many more loans that are adjusting. But commercial property values are down more than 27% nationwide since 2008." Similar to the housing crisis, banks cannot extend commercial real estate loans or refinance those problem properties in even the biggest markets in the nation. Says Wozny, "Historically, we just saw the biggest fire sale on commercial real estate in New York City last week and it will continue."

These signs of troubled times, Wozny says, points to a major problem faced by the nearly 6,000 community and mid-sized banks that have been lending on commercial real estate for the past seven years. Because while the government bailed out big banks that had given loans to homeowners and were facing problems themselves, there is no bail out money available for the banks that have provided loans to commercial real estate investors.

"These community banks know the Federal Government (FDIC) is looking over their shoulder, just waiting to gobble them up if they don't solve the problem fast, and because of the lending environment and commercial real estate values today, banks can't refinance these properties."

That further complicates matters because smaller banks are also regulated by the Federal Deposit Insurance Corporation (FDIC), regulator of U.S. Banks, that has taken over 289 banks in the past 21 months. Says Wozny, "It's a double-edged sword. Year to date twice as many banks have been closed on by the FDIC... If banks take back the property, the FDIC may take them over. But they can't refinance the property because there's a significant decline in value. SO that's where we step in with the property owner and the bank, to provide a flexible financing solution to solve everybody's problem as an equity partner."

According to Wozny, in most cases that will allow the owner to hold onto the property, preventing a foreclosure or bankruptcy. In addition to that, Wozny says they have been negotiating purchases of problematic commercial real estate properties directly from banks.

"The banks are calling us to help them out, and we are providing a win, win, win solution for everyone. Because we're small, private, and work with numerous hedge funds and private equity groups, we can help banks clear balance sheets, and fund properties in as little as 7 business days."

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