Standing before a federal panel, Atlanta developer Hal Barry lamented the difficulty of obtaining bank financing to build four government-leased buildings.
“Finding a lender to finance these buildings has been a real joke,” Barry said.
His pointed words were directed at a panel overseeing the government's Troubled Asset Relief Program (TARP) and came at a hearing held Wednesday at Georgia Tech. The chairman of Barry Real Estate explained his difficulties in working with lender BB&T, which involved his attempt to avoid foreclosure on a downtown Atlanta property on which he intends to build an office tower.
“The recession hit us hard,” Barry said.
Atlanta developers and attorneys shared similar stories with the oversight committee of a banking reluctance to finance new developments or refinance existing deals with reasonable workouts, given the realities of metro Atlanta’s distressed market.
“There is a complete drought in meeting the needs of new legitimate properties or refinancing existing loans,” said Brian Olasov, managing director for Atlanta law firm McKenna, Long and Aldridge.
Under the TARP program, the U.S. Treasury Department has put more than $6.2 billion into Georgia banks. The hearing was held to determine whether commercial real estate’s troubles are big enough to cause more problems for banks, particularly with the TARP program winding down this year.
Atlanta's financial ebb and flow is tied directly to commercial real estate, Atlanta Mayor Kasim Reed said in his opening remarks to the panel, and regional banking regulators who also testified said substantial financial challenges remain.
Doreen Eberley, acting Atlanta regional director for the Federal Deposit Insurance Corp., was asked several times if banks were willing to recognize commercial real estate losses and work with developers. Her response: It was an ongoing process.
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