Posted by Ka Lee Angel LeeBy Matthew.Yeomans
America's commercial real estate market continues to look sick. The latest indication comes Sunday, following the abrupt bankruptcy filing of Capmark Financial Group, the massive commercial real estate financier that formed in 2006 when GMAC agreed to sell the majority of its commercial real estate business to Kohlberg Kravis Roberts and others. The firm has been one of the country's biggest investors in strip malls, office buildings, and hotels. According to the New York Times, "Capmark is only the latest to fall victim to continued trouble in the commercial real estate market, which many analysts have said will continue to deteriorate. Many small banks have collapsed this year under the weight of commercial loans." The Wall Street Journal concurs, writing that "problems in that market are far from over." The unraveling of Capmark is a big blow to private-equity owners KKR, Goldman Sachs (GS) Capital Partners, and Five Mile Capital Partners, the newspaper adds, which teamed up to pay $1.5 billion in cash for the business from GMAC in 2006.
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