CRE Dominoes: Capmark Hitting The Fan

Well the reports are that Capmark is finally ready to file BK. This was something that has been on the radar for quite some time, but seems things are nearing the end with reports that a filing could come as soon as this weekend. Capmark is/was a large commercial lender, though what this deal will likely highlight is that despite its size, Capmark is just a small fraction of the distress that is out there. According to Capmark’s website, as of June 30, 2009 the company managed equity real estate and mortgage-related investments in the public and private markets with $7.5 billion in investments under management. From the NY Times article,

Kohlberg Kravis Roberts, Goldman Sachs Capital Partners, Five Mile Capital and Dune Capital bought GMAC’s commercial real estate businesses in 2006 for about $1.5 billion [and assumption of about 5x that of debt] , with GMAC retaining a 25 percent stake in the operation. K.K.R. has already written down the value of its Capmark investment to zero.

Interesting. Let’s look for any short positions on Capmark or it’s debt and I suspect Goldman’s name will probably show up somewhere.

[via NY Times]

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