Come on in: An interview with Wachovia's Commercial Real Estate Team

RMA Journal, The,  June, 2003  by Jim Nelson,  Beverly Foster

Tags: commercial real estate, Wachovia Corp.

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In the current thinking, the 10 largest banks would be subject to the complete guidance of Basel in its most complex form. We would question whether that creates more risk in the system, as banks and other nonregulated entities would perhaps be in a less rigorous position to apply capital to the risk. Holistically, these entities don't have the same tools and expense base to manage the risk. So does the system get riskier again?

Notes

(1.) Exchanges in a qualified intermediary transaction proceed as follows:

* There are 45 days from the point an asset is sold to identify a pool of assets.

* Closure on those assets must take place within 135 days thereafter; the assets must be similar to that sold.

This can result in a tax deferral benefit when the cost basis in one asset is transferred directly to the new asset. To satisfy the requirements, the cash cannot be touched and must be held by an independent third party--called a safe harbor. Banks can act as a safe harbor and accumulate cash for people who have gains on asset sales.

[c] 2003 by RMA. Beverly Foster is editor of The RMA Journal. Photos [C] 2003 by J.W.B. Photography, Charlotte, North Carolina.

COPYRIGHT 2003 The Risk Management Association
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