Impact of IndyMac Failure on Real Estate investor sentiment
What effect will the IndyMac failure have on Real Estate investor sentiment? What opportunities does IndyMac's failure present?
Answers (2)
Greg P
Private Equity - Real Estate Advisory
Best Answers in: Commercial Real Estate (2), Small Business (1)
More recently, IndyMac's commercial real estate product was very vanilla (probably on purpose to mitigate risk). Most of their loans were similiar to FNMA guidelines for Mutli-Family (5+ Units) projects. I suspect their commercial portfolio is probably performing well based on their underwriting guidelines.
IndyMac's exit will probably help some other mid-tier commercial lenders such as Imperial Capital, Greystone, etc.. I would also look for the Wells Fargo and WAMU's of the world to see a small spike in multi-family volume.
In summary, I don't think this registers more than a blib on the radar screen with most large commercial real estate investors. IndyMac's problems were more of a result of an underperforming housing market with a large concentration of Alt-A loans that went bad. If anything, I think IndyMac's failure hurts consumer confidence more than investor sentiment about the market place.
Greg Pretko
VP, Managing Director
Niche Capital Group
Walter C
CEO, Figueroa Capital Group and Principal, Charles Dunn Company
Best Answers in: Commercial Real Estate (3), Venture Capital and Private Equity (2), Personal Real Estate (2), Hedge Funds (1), Option Markets (1), Using LinkedIn (1)
Greg hit this right on the button. This isn't an issue with much impact for the commercial markets, and will not register any measurable spikes one way or another for the other institutions, at least in terms of investment property, borrowers, etc. The one indicator that already exists would be the ever tightening underwriting criteria. Regardless of the opportunities to acquire that exist now and in the near term, financial institutions are capital constricted and will continue to reduce risk and exposure. Keep an ultra conservative approach when valuing property and assigning leverage, or your investors will have issues and nasty surprises.
