Bear Stearns Buyout Will not Affect Multifamily Lending
- Mar 17, 2008
By Anuradha Kher, Online News EditorNew York—The near-collapse of Bear Stearns and its fire-sale acquisition by another company may not have significant implications for the real estate sector as investment banks have already retreated from real estate. “The Bear Stearns buyout will have no direct impact on multifamily lending because there’s been a stable and fair amount of capital for [commercial real estate] and it will continue the same way,” Michael Slattery, senior vice president of the industry group Real Estate Board of New York, tells MHN. “The investment banks have backed away since the middle of last year and there has been enough capital for this sector.”“This is especially true for New York, where the multifamily product is of high quality,” he says.Yesterday, J P Morgan Chase & Co set a deal to buy Bear Stearns for a rock-bottom price of $2 per share (or approximately $240 million) while the U.S. Federal Reserve expanded lending to securities firms for the first time since the Great Depression to prop up the financial system.The bargain sale followed a near run on Bear Stearns assets last week, after talk of a pending crisis prompted hedge-fund clients to withdraw large sums of cash. On Friday, the Federal Reserve took the unusual move of agreeing to lend Bear Stearns money, through J.P. Morgan, to keep the 85-year-old firm a going concern.