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(CHICAGO, IL) -- Two big names in commercial real estate circles believe they have come up with a plan to quickly move distressed property and non-distressed commercial notes off the books of banks struggling to meet federal regulation capital guidelines.

Bart Steinfeld

Chicago-based Jones Lang LaSalle of Real Estate Disposition Corp. LLC of Irvine, CA have launched a joint venture that they say creates a market for optimal commercial property and note disposition.

"With the default rate on commercial mortgages held by U.S. banks expected to rise to the highest level in 17 years in the fourth quarter of 2009, the smaller regional banks will have less time and government intervention to delay and pray much longer," says Bart Steinfeld, managing director of Jones Lang LaSalle's Real Estate Investment Banking practice.

 "They need a solution to move loans and property easily off their balance sheets now,"  Steinfeld says.

 "We expect the community banks to begin selling their small balance loans first, and our note auction platform will be a formidable tool for financial institutions seeking to consolidate and monetize loans of all sizes off their balance sheets."

Jay Koster

"This is an important new development for our clients as they can now maximize the value of their assets in a timely manner without upfront fees," said Jay Koster, President of Jones Lang LaSalle's Capital Markets practice.

"Since 2007, REDC has led the residential real estate market with more than $5 billion in real estate asset sales at auction, including more than $3.4 billion in 2008 alone," says Jeff Frieden, CEO of REDC.

 "Leveraging our expertise along with Jones Lang LaSalle's commercial property and note sale proficiency will take us to a new level and bring what was once a 'behind the scenes' process to a much wider commercial audience."

Jeff Frieden

The commercial property auctions will debut with a 100,000-square-foot commercial property sale in October.

"By offering this facility for auction, we will be able to increase the scope of our traditional outreach and expose the property to a much broader investor base," says Guy Ponticiello, Managing Director with Jones Lang LaSalle Corporate Capital Markets. 

Guy Ponticiello

Investors can also auction notes of all property types and a variety of debt instruments including first liens, second mortgages, whole notes, and sub-performing or non-performing notes.

"For many months, we have been seeking ways to capitalize those 'forgotten' or hidden assets on our clients' balance sheets," says Mike Mounts, managing director of Jones Lang LaSalle's Real Estate Investment Banking team.The ability to reach a wider audience of new buyers combined with a platform of proven results will create an unbeatable way to maximize recovery,"

REDC, a company within the  Greenwich, CT-based Stone Point Capital organization, was established in 1990.  The company says it has sold more than $5 billion in real estate assets at auction since May 2007.  REDC's primary clients are residential mortgage lenders and home
builders.

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