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Lehman May Delay CRE Sale

Lehman Brothers Holdings Inc.'s bankruptcy filing may delay the sale of about $30 billion of commercial real estate assets at a time when property values are eroding, leaving less on the table for creditors.

Lehman has "$30 billion worth of real estate, which probably isn't worth $30 billion,'' said Jeffrey Baker, executive managing director of real estate broker Savills LLC in New York. "Going through a bankruptcy process, the assets are going to be liquidated, and they will be liquidated at market pricing.''

Lehman was scrambling until just before it sought bankruptcy protection on Sept. 15 to sell the real estate assets, ranging from a loan to California land developer SunCal Cos. to a golf course overlooking St. Tropez and the Coeur Defense office complex in Paris, which the New York-based firm bought for $3 billion last year, the second-biggest real estate purchase of 2007.

"There's value in there,'' said Stephen Coyle, a fund manager at New York-based Cohen & Steers, about Lehman's commercial real estate before the firm filed for bankruptcy protection. "It's a question of at what price?'' Cohen & Steers manages about $29 billion in real estate investments.

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