The uncertain climate is stirring more lenders to harvest theirnotes in the expanding secondary market, according to DebtX CEO J.Kingsley Greenland II. Founded in 2000, DebtX is seeing"significantly more" activity than normal, he tells GlobeSt.com."There's more downside that upside right now," he relays,explaining such turmoil often leads lenders to forgo "assetgathering" and focus on stabilizing a portfolio. Concentrated onthe southeastern US, the loans assembled by DebtX run the gamut inquality, from non-performing and sub-performing to those that areup to date. The remaining three sales will each be around $100million, says Greenland, with bidding for later traunchesoverlapping the completion of earlier rounds. Bidders will beallowed to pursue both individual and pools of loans.

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The initiative involves more than 200 lending relationships, andthe loans are secured by land as well as commercial and residentialproperties. There is not, however, an over-concentration ofmultifamily in the portfolio, says Greenland, despite that market'scontinued difficulties in Florida and Texas and the anticipatedavailability of debt deals from that area. Loans in the DebtX stackare backed by assets in Atlanta, Orlando and south Florida, andrange in size up to $20 million.

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DebtX says lenders increasingly seek to avoid the onerous loanworkout route and Greenland says he believes the most efficient wayto maximize value is via a bulk offering. Certain buyers might bewilling to pay more for a series of similar loans than individualswould for each note, he says. "And we are working for the seller,"he stresses. Greenland is also unabashedly supportive of the firm'sInternet platform to spread the word about the loans, insisting itbenefits both sides of the aisle.

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DebtX has more than 3,500 investors and 200 financialinstitutions selling through its exchange, offering a breadth thatthe firm lists among the world's largest online marketplaces forloan sales. "Its good for the buyer because you get to look at moreproduct and look at specific product," says Greenland, whose firmalso has offices in Atlanta, Chicago, New York City, San Franciscoand Frankfurt, Germany. The former president of Boston CapitalMortgage Co. founded DebtX in 2000 with the premise that technologycould streamline the emerging secondary loan arena, leading tocreation of its own products and systems. The DebtX exchangeservices commercial, consumer and specialty finance debt.

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The commercial real estate debt market certainly does appearvibrant no matter what medium through which the loans are beingtraded. Traditional buyers of debt are being joined by new playerssuch as Intercontinental Real Estate Corp. of Brighton, one ofseveral real estate investors now adding loan buys to theirrepertoire. "We've got tons going on," concurs NAI HunnemanCommercial Corp. VP Mark Hall, a veteran specialist in debt saleswho says his firm's offerings are also "across the board" in termsof credit quality. "It's busy out there," says Hall, calling thenew pool from DebtX "the tip of the iceberg" of what could soon hitthe street.

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