On Wednesday, the New York Times published a colourful feature on the aftermath of the condo boom in Florida. At the center of the piece, described as the “now tottering king of American finance”: Corus Bancshares of Chicago.
The NY Times’ Eric Dash told the sorry tale (emphasis FT Alphaville’s):
After failing to find a buyer for the entire company, regulators are moving to cleave the bank in two and sell its banking operations and condominium loans separately. The hope is to clinch a deal by the end of the month.
…
Whatever the outcome, Corus will go down as the great enabler of condo madness, and its travails are a harbinger of the pain yet to come in the troubled world of commercial real estate. More than any other condo lender, Corus epitomized the easy lending and lax oversight of the go-go years – and the pain of the ensuing bust. Its share price, which was nearly $13 in February of 2008, has plummeted into the land of penny stocks, closing at 25 cents Wednesday.
Corus barreled into hot markets like California, Florida and Nevada and then kept lending as those markets boiled over. Rather than diversify, it concentrated its lending bets by financing only a handful of big, risky projects. And it poured its idle cash into a small group of other banks and financial companies that were upended when the crisis struck.
On Friday, the FDIC announced Corus had been shuttered by its regulator, the Office of the Comptroller of the Currency. MB Financial assumed all of the failed bank’s deposits, the FDIC said.
Another one bites the dust – but the pain in commercial real estate is far from over.
Related links:
The FDIC failed banks list – FDIC
CRE datapoint du jour, Tishman Speyer edition – FT Alphaville