Real Estate terms What current issues exist which cause bank to be more susceptible to office...
Real Estate terms
What current issues exist which cause bank to be more susceptible to office building failures?
Homework Answers
The Great Recession has caused issues that still are around today which cause banks to be moresusceptible to office building failures. Some of these issues include development participants were not conservative enough and became greedy in part due to market liquidity. Developers assumed they would refinance with improved terms or sell the asset for profit when the loan was due. Developers underestimated budget expenses, which were not finalized before construction. Developers’ capital structure was problematic with significant debt, minimal equity, and not enough preleasing all causing problems for the banks.
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Real Estate terms
What current issues exist which cause bank to be more
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