Capmark, Formerly GMAC Commercial, Files For Bankruptcy
Capmark Financial Group, formerly GMAC Commercial, has filed for bankruptcy protection after experiencing significant losses in the commercial real estate market. The bankruptcy, while not unexpected, is still a blow to the commercial side of the market.
As we saw in residential real estate, commercial also had it’s bubble and the over-leveraged investors on the commercial side are getting pummeled. They are even more affected by the recession as businesses are cutting back on the space they need and new businesses are not starting up. The over supply is drastic and getting worse, driving down both property values and rents.
For those on the residential side of the real estate equation there will be pressure as banks will have to maintain reserves that normally would be lent out to protect against the bad commercial loans. These are much harder to liquidate and absorb.
The move could add to concern that the commercial real-estate market is struggling as much as the residential side.
A group of funds — composed of Kohlberg Kravis Roberts & Co., Goldman Sachs Group’s Goldman Sachs Capital Partners and Five Mile Capital — owned 75.4 percent of Capmark, while GMAC owned 21.3 percent, and Capmark employees and directors owned most of the remainder, according to a Reuters report citing the bankruptcy filing.
Capmark listed $20.1 billion in assets and $21 billion in liabilities as of June 30 in its Wilmington, Del.-bankruptcy filing, the report said.
Capmark, formerly GMAC’s commercial property arm, had recently reported a second-quarter loss of $1.6 billion.
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Comment by Barney T. Giddens on 28 October 2009:
Dear Sir/Madam , ( please answer )
Explain to me how the RESIDENTIAL side of GMAC ( which received bail
out monies-my tax dollars )Can take my money and foreclose on my home ? I am 72 years old , lost 23 yrs. of employment and my wife is
on dialysis three days a week fighting for her very life. It was a
sub-prime , ARM ,convential,no provision for default ,10.5 % on 1st,
and 8.5 % on 2nd with a balloon payment of 108,000 @ maturity when
I am 98 years old ! GMAC and anyone connected to them is going down the tube for this kind of loan. There is no defense from my Heavenly
Father ! GMAC and all their buddies are playing hardball with the
Alpha & Omega ! HE is the one holding all the ” ACES ” It was racial
profiling and predatory lending of the highest order! Barney &Wanda