Bernanke Testimony to House Budget Panel - BERNANKE ON COMMERCIAL REAL ESTATE

“We are concerned about it, it clearly is a very weak point in the economy. For many banks, including small and medium-sized banks, it is a problem. We have done a number of things. The Federal Reserve, working with the Treasury, has developed programs to try to restart the commercial mortgage-backed securities markets. Beyond that we have issued guidance to banks on commercial real estate and we’re trying to work with them to restructure commercial real estate loans and to find ways to manage in terms of loans, so we’re doing the best we can with banks and with the markets. There seems to be, I would say, a few glimmers of hope in this area, some stabilization of prices in some markets, for example, but it does remain a serious concern and we’re watching it very carefully.” ABC News

Hotel Deals Pick Up – Distressed properties are working their way through the workout and foreclosure process. Real Capital calculates that 42% of the hotel deals so far this year involved properties with distressed debt, meaning they were delinquent, foreclosed or otherwise under pressure from their lender. That compares with 11% last year and 1% in 2008. WSJ

Union Street Cooks Up a Restaurant Revival - Behind the surge: moves by local merchants to revive the area by removing a zoning law restricting new restaurants. At the same time, landlords in the historically high-price neighborhood began lowering commercial rents after a number of longstanding business had to close. Merchants lobbied the city to undo a 1987 law that stipulated new restaurants could only open in former dining establishments. The law was partly aimed at squelching noisy or unruly behavior that some residents feared might arrive with new bars and eateries. Some existing restaurants also were eager at the time to stave off new potential competitors on the dining scene. The law was rescinded in January by the San Francisco Board of Supervisors. WSJ

Treasuries Pare Losses on Demand at 10-Year Note Auction –  Treasuries pared losses after the $21 billion auction of 10-year notes attracted higher demand than traders forecast and stocks trimmed their gains. Indirect bidders, an investor class that includes foreign central banks, purchased 40.2 percent of the notes, compared with an average of 41.3 percent for the past 10 sales. Businessweek