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RSS FeedReuters: Commercial Real Estate Loans In Crisis |
Posted at The Loan Modification Expert by Peter Collins
Apr. 18, 2009
Categorized in: Loan Modification
The commercial mortgage market is in crisis. It is only the next logical foreclosure wave to hit the US and this tsunami may be the mother of all waves that drowns what’s left of our economy.
Reuters - Commercial property loans originated in 2005 to 2007 that increasingly carried risky terms are likely to see a significant increase in defaults in 2009 due to lack of credit, falling property values and reduced cash flow, said Alan Todd, head of commercial mortgage bond research at JPMorgan, in published research.
Commercial property owners have it tough these days. With no credit, no business and tenants not paying their rents, delinquencies and defaults are rising rapidly.
The collateral damage can be seen on nearly every major street corner in America. Major retailers, restaurant chains and several other establishments have simply closed shop and left town. Leaving only an empty 50,000 square foot building and memories of better times.
Reuters - The imminent default of two of the largest loans in CMBS less than a year old, in a foreclosure-ridden area of California, helped propel bond risk premiums to record levels.
The question isn’t if commercial properties will struggle, but when and where? As a result commercial loan modification has become a popular solution for commercial property owners.
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