The Federal Reserve Bank of New York said it was a "good start;"however some in the CRE industry are disappointed at the level ofparticipation. "I would be feeling much better right now if it hadbeen closer to $10 billion or $15 billion," one locally-basedprivate equity provider tells "There is a $200-billionceiling after all." Also, this person adds, the results do not bodewell for the Public Private Investment Fund--the details of whichTreasury Secretary Timothy Geithner is set to reveal shortly.

The Federal Reserve Bank has pledged to support up to $200billion in this program--and could conceivably extend that to $1trillion. It supports the issuance of asset-backed securitiescollateralized by student loans, auto loans, credit card loans andloans guaranteed by the Small Business Administration. In Februaryit was extended to includepurchases of AAA-rated CMBS. On Thursday, March 18, the FederalReserve expanded the types of collateral even further, includingsecurities backed by floorplan loans, vehicle fleet leases, loansand leases for business equipment and those backed by mortgageservicing advances.

There are any number of reasons why participation was low. Thesubscription period--March 17 through March 19--occurred during thepublic uproar over the AIG bonuses. It also may be that borrowersare holding back to see how the first round goes.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.