Wednesday, June 18, 2008

Regional Delusions
Fifth Third Bank announced today that it is cutting its dividend and raising capital. Last week Key Corp made a similar announcement and Ohio's National City Corp made a made a similar announcement in April. I had thought that regional banks would fill some of the void in tenant in common financing caused by the mass exit of conduit lenders. The problems facing regional banks have squashed this notion. An informative presentation at the Orchard Conference confirmed that regional banks will not rush to the TIC space. Regional banks have a large exposure to residential developers, and the developers' problems are becoming the regional banks' problems. TIC sponsors need to look to other lending sources.

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