by Calculated Risk on 3/09/2009 09:00:00 PM

Teams from the Treasury Department and Federal Reserve are analyzing the appropriate terms and conditions for accepting commercial mortgage-backed securities (CMBS) and are evaluating a number of other types of AAA-rated newly issued ABS for possible acceptance under the expanded program.
Federal Reserve, TALF, March 3, 2009

From the Christian Science Monitor: Real estate woes seep into malls, office towers

By April, the federal government expects to have a plan to refinance office towers and shopping centers in danger of defaulting. The scale is likely to be massive...

For now, commercial delinquencies are few. But office vacancy rates are heading toward record levels, according to one estimate, and banks are exposed, with $1.72 trillion in commercial real estate loans outstanding as of Feb. 18.

Just as significant, many insurance companies and pension funds have invested in real estate, putting them at risk, as well.
...
This year some $300 billion in loans to developers are due to be refinanced by commercial banks. Given the decline in the economy, many real estate ventures might not be able to survive if they are not able to refinance their loans on better terms more reflective of today’s economic conditions. But banks are largely refusing to refinance as the properties drop in value.

Last year there was some discussion of a bailout for CRE investors, and that didn't make any sense. This article seems to suggest that the Fed will be helping with a solvency problem because of rising vacancy rates and falling property values. I don't think that is the Fed's intention.

The Fed is considering a program to provide liquidity for newly issued AAA-rated CMBS. That won't help investors who bought at the top, but it will help property owners with strong cash flow positions to refinance. The Fed's role is liquidity, not solvency.

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