Bloomberg:  American International Group Inc. has announced the need to  raise $12.5 billion in capital after reporting quarterly loses.   The company’s vice chairman said there’s “no assurance” credit-market losses are over.  “The financial sector is going to continue to be a drain,” said Dan Genter, president of RNC Genter Capital Management in Los Angeles. “The market had a short time period of feeling like it’s over and we escaped. Now there’s a realization that this isn’t over.”   Financial firms have experienced $323 Billion in write downs.

What effect does this have on the real estate industry?  The Dallas Morning News reported that the Urban Land Institute held a conference in Dallas this week.  Expert panels predicted a housing recovery to begin in late 2008-2009.    Additionally, commercial investors have been hurt by the lack of capital.  Commercial mortgage-backed securities have disappeared.  Small and simple real estate deals are finding funding however larger complex deals are not.  Today commercial real estate investors are looking to looking to private investors, pension funds and insurance companies for their lending needs.  Distressed properties are selling such as condos being converted back to apartments.  If the economic downturns continues the number of commercial loan delinquencies will increase.