Refinancing To The Rescue?

WSJ says January 2, 2008:

Many investors surely hope that 2008 will be the year of refinancing. For the final six months of 2007, commercial mortgage lending was at a near standstill. Though total transaction volume will close 2007 at a record of about $515 billion, most of the transactions took place in the first half of the year before the credit crunch took hold. Now, many of the investors who bought during the frenzy are unable to refinance the short-term debt that facilitated these purchases into longer-term loans. A new report by Chicago-based brokerage Jones Lang LaSalle estimates more than $50 billion of five-year, full-term interest-only loans in the market that were written at aggressive loan-to-value ratios could turn to defaults "at a significant level" if the loans can't be refinanced in 2008. "There will be a refinancing frenzy of investors searching for equity infusions next year," says Earl Webb, chief executive of Jones Lang LaSalle's capital-markets group.