Word: reit
(lookup in dictionary)
(lookup stats)
Dates: during 1970-1979
Sort By: most recent first
(reverse)
...with mountainous debts do not merely have creditors: they have partners with a high stake in their survival. Rarely has the truth of the saying been better proved than by the current troubles of the nation's real estate investment trusts. A glittering investment innovation of the 1960s, REITS enjoyed congressionally mandated tax breaks similar to those of mutual funds. They collected money from various sources-bank loans, sales of stock to the general public-then made loans to builders to finance the construction of condominiums, motels, office buildings, even single-family homes. But two years ago, inflation...
Last week one of the pioneer REITS, Boston-based Continental Mortgage Investors, the nation's second largest, provided the latest example of how bad things have become in the REIT industry. It announced that it would default on $551 million in interest and principal payments now due on its borrowings. Caught by shrinking revenues and interest rates of 12% and more, Continental raised rates to builders to 16% or 17%. The builders could not afford such rates and simply walked away from projects. At one point, more than 60% of Continental's loans to builders had either been...
...serious question exists about how long the REITs and their creditors can hold out, though banks could write off many of their REIT loans as uncollectible. The case for waiting is powerful. In all, the nation's 200-odd REITS owe U.S. banks $11 billion...