Outer boroughs trail Manhattan in debt recovery, lending expert says

Property owners and investors in the outer boroughs watching the relatively healthy sales market in
Manhattan should not be lulled into a false sense of security that their own territory is improving at the
same rate, securitized debt expert Tom Fink told an audience of real estate professionals this morning.

“It is safe to say at the moment, [Manhattan] is fine,” Fink, senior managing director of commercial
mortgage tracking firm Trepp, said. “It doesn’t mean it won’t have problems in the
future, but it is the outer boroughs, out in Long Island [and] southern Westchester [County], [that]
they have problems that are still dragging on the market.”

He was speaking at a meeting sponsored by the National Association
of Industrial and Office Properties, known as NAIOP, in Midtown.

Fink said while the delinquency rate for commercial mortgage-backed securities in Manhattan was 1.5
percent, it was nearly 10 percent in the wider metro region including Brooklyn, Queens and the Bronx.

He said nationally the number of loans that are distressed continues to rise, even as credit is easing
slightly, interest rates are falling and more lenders are writing loans.

Yet he did not think the recovery in Manhattan was as strong as some owners have estimated. He
questioned the recent $2.8 billion valuation released by CWCapital, which represents the lenders on the
East Side 110-building Stuyvesant Town and Peter Cooper Village. The 11,200-unit development was purchased in 2006 for
$5.4 billion.

“I can tell you we were are all scratching our heads where they came up with that number because we
just don’t see it,” he said.

Overall, pointing to charts that show hundreds of billions of dollars a year in maturing debt held by
CMBS bondholders, as well as government and private lenders, he said, “There is going to be a lot of
work to be done. That is not chump change. We are not out of the woods yet.”