CITI’S FLEXNER CALLS SMALL BANK CONSTRUCTION LOANS NEXT DANGER

By Daniel at 23 October, 2009, 8:41 pm

By John Gittelsohn and Thomas R. Keene

Oct. 23 (Bloomberg) — Small and regional banks hold $480 billion in commercial property construction loans that face mounting default rates, said Thomas Flexner, global head of real estate at Citigroup Global Markets Inc.

“I think in many cases we’re going to find borrowers just handing back the keys,” Flexner said in an interview on WBBR Bloomberg Surveillance. “We’re going to have broken assets.”

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