Categorized | Commercial

Bank of America Sells off Major Portfolio of Commercial Mortgages

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As the banking giant continues its efforts to stabilize operations following the adverse actions related to the mortgage crisis, they have agreed upon a deal to sell a very sizable portfolio at a significant discount. The lender has agreed to a sale of thirty-two properties, totaling eight hundred and eighty million dollars to Square Mile Capital Management. Included in the deal are the Renaissance Centre building in Wilmington, Delaware, and the Bank of America Tower in St. Louis.

This latest sale is the most recent of many, as Bank of America looks to reduce the number of assets it holds that are not generally associated with its main business practices. It has sold off nearly twenty billion dollars of portfolios in the most recent months.

Although this current sale of commercial real estate was heavily discounted compared to its current market value, some believe it to be a wise move. The most recent reports are indicating that the commercial real estate market is once again facing a decline, as the reality of a double-dip recession grows clearer. Commercial property values had been steadily improving over the last few years, which had made them highly sought after by investors.

It is expected that Bank of America will continue to look to downsize its commercial real estate portfolio. They have been gradually reducing the number of commercial real estate loans since 2007, though the sales have been much smaller in size. This most recent sale of over eight hundred million dollars in commercial properties, though, may be a strong indicator that the major bank is looking to relinquish commercial property related assets in much more significant numbers than it is over the past few years.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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