Cit Grp. Pfd A (fka CIT-A)

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from Dallas Dirt Real Estate Blog

November 1, 2009

Will CIT’s Bankruptcy Filing Affect Dallas Real Estate?

By now you’ve heard that CIT Group has filed for Chapter 11 bankruptcy protection. Taxpayers, who gave the company 2.3 billion last year, will likely not be re-paid. I’m not discounting that, but even worse, CIT is one of the country’s largest lenders to small business and retailers, like Neiman Marcus. Two months prior to the holiday season is not a great time for retailers to lose access to capital. My concern is how this will trickle down: small and mid-size businesses will not be able to fiance short-term surges, which will seriously affect their business models, and commercial real estate may take another bullet. We have seen the effects of the credit crunch in real estate, now we’re going to see it in the retail industry, which is in everybody’s face on a daily basis. Consumer confidence? You see where I’m going with this: we’ve had 60,000 home foreclosure postings this year.

I so do not like being Debbie Downer, truly, but the prognosis isn’t looking too positive. Your thoughts?

Update: Today’s New York Times downplays the disaster scenario I envisioned last night. Apparently this is a pre-packaged, “different kind of bankruptcy” that allows the company to re emerge from court protection by the end of the year, which is a pretty speedy recovery.

posted by Candy Evans | November 1st, 2009 9:18pm | filed under Changing market trends in Real Estate, Real Estate, Wall Street meltdown | 1 Comment »

http://dallasdirt.dmagazine.com/2009/11/01/will-cits-bankruptcy-filing-affect-dallas-real-estate/