According to the bank’s web site, the global real-estate investment unit’s capital and real-estate assets were $12.5bn as of June 2009. The unit reportedly owns commercial property worth approximately $10bn in the US, Europe and Asia.
Moody’s Investors Service predicted that the US commercial prices, which have already plunged 43%, would further fall from the October 2007 peak. Against this backdrop, the New York-based bank, which is 27% owned by the US Treasury Department, is facing pressure from regulators to sell assets and reduce debt.
Douglas Ciocca, MD of Kansas-based Renaissance Financial, said: “It’s a difficult time to get a reasonable price for that division.”
Gary Townsend, president of Hill-Townsend Capital, a US-based private investment group, said: “This is clearly not a core business for them. To the extent they sell something for more than what’s on their books, that raises capital.”
