Millionaires are made in times like this :: Commercial Real Estate risk looms for local banks

Millionaires are made in times like this :: Commercial Real Estate risk looms for local banks http://viigo.im/1zZp

Boston Business Journal - by Tim McLaughlin

The concentration of commercial real estate loans at several Boston-area community banks have soared past thresholds that typically invite extra scrutiny from regulators, highlighting the amount of potential risk still percolating on the institutions’ books.

Executives at these banks say regulators have stepped up scrutiny of their portfolios amid gloom-and-doom forecasts about the commercial real estate market.

But Gerald Mulligan, chief executive of North Andover-based River Bank, said a commercial real estate loan on a three-family in the Merrimack Valley with strong cash flow is a lot different than a big city skyscraper losing corporate tenants.

“People think of commercial real estate and they see empty office towers in Houston,” Mulligan said “We don’t have any of this. Commercial real estate is a big concept. Some of it’s risky. Some of it isn’t.”