According to Remington Financial Group, a capital services company based in Scottsdale, Arizona, a lack of bank liquidity poses a severe threat to the commercial real estate market.

“The commercial real estate industry is a disaster waiting to happen,” said Andy Bogdanoff, founder and chairman of the company. “With U.S. banks in a deep and continuing liquidity crisis and with $1.2 trillion in commercial debt due to mature by 2012, thousands of real estate owners and developers across the country will soon find themselves between a rock and a hard place when their loans mature.”

However, bank liquidity isn’t the only threat to commercial real estate. Bogdanoff said it is estimated that two-thirds of the securitized loans and half of the whole loans due to mature between 2010 and 2013 would not quality for refinancing due to today’s more stringent banking standards. He said the problem is further compounded by the combination of the unprecedented high cost of funds and the 40 percent decline in real estate values since 2007.

“With property values less than the original debt, thousands of owners and developers may have no choice but to sell their properties at a loss or face bankruptcy when their loans mature,” Bogdanoff said. “If the problem isn’t solved soon, the result could be a disaster for the commercial real estate industry and the U.S. economy as a whole.”

Bogdanoff believes recapitalization with private capital sources can help many of the nations distressed real estate owners and developers. In an effort to assist these individuals, Remington Financial Group introduced a new recapitalization program that bypasses traditional banking sources. The distressed owner recapitalization program is being expanded this week with a broad introduction to top brokers across the nation.

“This program is aimed directly at distressed owners and developers,” Bogdanoff said. “For those unable to refinance loans, we can tie together the expert capital advisory services of Remington with access to hundreds of active private funding sources ready, willing, and able to recapitalize troubled commercial real estate assets across the capital stack.”

A Michigan-based recreational vehicle park was an early recipient of funding in the new recapitalization program. Despite adequate cash flow and a solid financial history, lenders refused to refinance the maturing loan because declining property values caused a loss of equity. Remington Financial Group acted as a financial adviser and creatively restructured the distressed owner’s business plan in such a way that it could successfully tap into its extensive network of private lenders and investors. Through the group’s recapitalization program, the distressed owner of the recreational vehicle park was able to secure a $1.57 million SBA 7(a) loan, priced at prime plus 2.5 percent, with 90 percent loan-to-value, and amortization over 25 years.

“This is just one example of how creative financing expertise combined with access to private capital can help fill the potentially disastrous gap that is being created in the capital markets by the on-going liquidity crisis,” Bogdanoff said.