Falling Prices Hit Apartments Hard, Put Pressure on Borrowers
	Recession, Credit Crunch Force Erickson Retirement Communities to File for Chapter 11
	Cushman & Wakefield Seeks New CEO
	FDIC Frets Over CRE Loan Losses

Commercial real estate prices have taken a dive of 32.8% from a year ago, and 40% from two years ago, a new report by Moody’s/REAL Commercial Property Price Indices shows. Most surprising is the steep plunge in prices for apartments, once considered the golden sector and the property type least damaged by recession and the nation’s credit crisis.

The special report from Moody’s Investors Service issued this week shows particular weakness in the Florida apartment market and in the San Francisco office market. Declines occurred across four major property types: multifamily, industrial, office and retail. Hotels were not included.

“Given how bad things are, there’s really no reason to sell unless you’ve got a gun to your head,” says Joe Franzetti, managing director at Cohen Financial, a Chicago-based mortgage banking firm.

Erickson Retirement Communities, one of the biggest developers and managers of seniors housing with 23,000 residents in 19 communities spread across 11 states, filed for Chapter 11 bankruptcy protection on Monday. The Baltimore-based company, founded by innovative businessman John Erickson in 1983, plans to restructure more than $1 billion in debt.

The company also announced that it has agreed to be purchased by Redwood Capital Investments LLC, which is controlled by Jim Davis, the majority owner of the Allegis Group, a staffing services firm based in Hanover, Md.

The U.S. Bankruptcy Court in Dallas, which is where Erickson Retirement Communities filed for court protection, must still approve any agreement. Other bidders could still emerge. As part of the restructuring, the company plans to separate its management and real estate development businesses.

Cushman & Wakefield, the New York-based global brokerage, is looking for a new chief executive officer after Bruce Mosler, who had been president and CEO since 2005, was named co-chairman of the board of directors, alongside John Cushman III.

The directors have established a search committee to find a new CEO and retained executive search firm Spencer Stuart to assist. Mosler will remain president and CEO until his successor joins the firm.

Majority shareholder Carlo Sant’Albano, CEO of EXOR, says in a statement, "In his new responsibility, Bruce will play a critical role in continuing to enhance the Cushman & Wakefield global brand. He is in a unique position to leverage the firm’s vast service offering and talent around the world on behalf of clients."

The nation’s banking system continues to plod along on a knife-edge between survival and failure, and commercial real estate (CRE) loans could become the heaviest anchor weighing down an economic recovery.

In testimony Oct. 14 before the U.S. Senate Subcommittee on Financial Institutions, Committee on Banking, Housing and Urban Affairs, Federal Deposit Insurance Corp. Chairman Sheila Bair made a special point to call out CRE loans as a major trouble area:

“The most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters is in CRE lending. While financing vehicles such as commercial mortgage-backed securities (CMBS) have emerged as significant CRE funding sources in recent years, FDIC-insured institutions still hold the largest share of commercial mortgage debt outstanding, and their exposure to CRE loans stands at an historic high. As of June, CRE loans backed by nonfarm, nonresidential properties totaled almost $1.1 trillion, or 14.2% of total loans and leases.