This is my exact feeling towards the recent event involved with bailout of Lehman Brothers for this weekend. I personally thought Lehman was able to survive this difficult situations somehow; however, the situation out there seems to be much more challenging and difficult, based upon the news. Lehman's exposure to commercial real estate is huge and it said to be "toxic" from time to time. I am wondering if it is really true. My guess is, yes, it might be overvalued, based upon the current market conditions, but looking at the property itself, there must be a lot of quality assets.
If Lehman is forced to conduct a fire sale of its properties, it will definitely have another rippling effect upon the commercial real estate markets across the globe. The latest WSJ.com said that Bank of America is in merger talks with Merrill Lynch. Unprecedented deals might happen one after another under the current chaotic market environment. It appears to me that the market is still looking for another victim.
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