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As analysts call Forest City Enterprises stock worthless, local elected officials get a vague update on Atlantic Yards »
December 23, 2008
Developers, too, ask for bailout as massive debt looms
The Cleveland Plain Dealer reporter Michelle Jarboe added some details about Forest City Enterprises to the Wall St. Journal story on the commercial real estate sector's need for fast credit:
Forest City has not taken a lead role in this campaign, but company executives have discussed the lobbying efforts with trade associations, said spokesman Jeff Linton. Forest City faces more than $2.1 billion in debt maturities through Jan. 31, 2011, according to a recent regulatory filing. About half of that had been dealt with as of Dec. 2 or can be extended, but Forest City still must refinance more than $1 billion in debt during the next 25 months.
"In a general sense, we're supportive of anything that will help to get the credit markets working again," Linton said. "And if the idea of having some aspect of a government loan guarantee or some other involvement by the federal government helps improve the perception of risk associated with lending for commercial real estate . . . we're certainly all for that."
A spokeswoman for Developers Diversified did not respond to a request for comment Monday.
Rich Moore, an analyst who follows Forest City and Developers Diversified, said he had not heard about the companies making requests for assistance from the government or the Federal Reserve. But, he said, real estate developers and owners need to try every possible measure to get debt during this credit crunch. "It's less about 'How good are my properties?' and 'How strong are my tenants?,' and more about 'Will somebody please make me a loan?,'" said Moore, an analyst with RBC Capital Markets in Solon.
NoLandGrab: The Federal Government has been doing all it can to get the credit markets working again, but it appears that some real estate developers are more highly leveraged than others. However, the one commercial real estate developer renowned for its expertise in lining up subsidies (aka "corporate welfare") has assumed what might be a catastrophic amount of debt — might the two be related?
Posted by lumi at December 23, 2008 4:59 AM