From NAR: Commercial Real Estate Liquidity

I received this email from NAR Government Affairs and thought it was important to pass along. I also think it is important that not only should our association send this letter, but commercial brokers as well. The letter is as follows:

" Several state associations have expressed concerns about commercial real estate liquidity. NAR shares these concerns and have drafted a letter for state and local associations to send to their members of Congress. Please use this letter as you see fit. The letter can be signed and should be on association (company) letter head. If you have any questions contact Megan Booth MBooth@realtors.org or Vijay Yadlapati VYadlapati@realtors.org ." The letter is as follows and a link will be provided at the bottom so that you might download it and send it off.

February 22, 2010

Dear Representative (Insert member of Congress. You can google that information)

A crisis is looming in the commercial real estate market. This will not just be a disaster for commercial real estate investors and property owners - but for the entire economy. Commercial real estate supports more than nine million jobs and generates billions of dollars in federal, state and local tax revenue. ( Company or your name) is very concerned about this growing problem, and believes that solutions are needed to avoid this potential crisis.

We support H.R. 3380, the "Promoting Lending to America's Small Businesses Act of 2009" introduced by Reps. Kanjorski (D-PA) and Royce (R-CA) that would increase the cap on credit union commercial lending to 25% of total assets. During previous crisis' consumers and businesses have relied on credit unions to fill in the gaps where banks cannot serve them. But today they are hampered by a lending cap of 12.25% of total assets.

We also believe there are a number of other proposals that are worthy of serious consideration. These include solutions to the equity gap which prevent properties with an otherwise performing loan from refinancing when the property has a value of less than the current debt. Improved cash flow for investors/owners of commercial real estate would help to fend off some of the challenges the market faces. The most effective means of improving cash flow on real property is to provide more generous depreciation allowances. We believe that some combination of accelerated depreciation (or shorter recovery periods) and passive loss relief would be significant investor incentives.

In addition, we urge an extension of the Troubled Asset Loan Facility (TALF). TALF assisted with the first issue of new commercial mortgage backed securities (CMBS) in more than 18 months just last November. TALF authority for legacy ( previously issued ) CMBS expires March 31st, 2010. The authority for new issues expires June 30th, 2010. TALF has played a valuable role in restoring investor confidence. We believe that TALF should be given additional time so that it may continue to jumpstart the private commercial mortgage markets.

There is no easy solution to the commercial liquidity crisis and there is no silver bullet to address all types of properties. However, doing nothing will certainly spell disaster. We urge Congress to look at all viable solutions and take immediate steps to address this serious problem that can impact every community in our nation.

Sincerely,

Now, to download this letter go to http://go-to.realtor.org/r/GKGA4R/B528B/S3Y2HC/CHCNF/NL9DE/LE/h/
Sign and send it to your Congressional Representative today