From the category archives:

Commercial

Commercial Real Estate Blood Bath to Begin

by Moe Bedard

Commercial real estate — including shopping centers, office buildings and industrial property — will hit a low point in 2010 not seen since the Great Depression, according to a national survey of real estate executives.
Values and rents will plunge, and vacancies and defaults will soar across all types of commercial property before the market rebounds [...]

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U.S. Banks to See Sizable Losses on Commercial Property

by Moe Bedard

U.S. banks are at risk of sizable new loan losses, particularly on commercial property, and some banks may not have sufficient capital to fully cushion against losses, a Federal Reserve official said on Monday.
Some large regional and community banks that have built up unusually high concentrations in commercial real estate loans will be “particularly affected” [...]

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US Bank Regulators: “Prudent” Commercial Loan Modifications

by Moe Bedard

* Regulators urge “prudent” commercial loan modifications
* Commercial real estate seen as trouble spot for banks

By Karey Wutkowski WASHINGTON, Oct 30 (Reuters) – U.S regulators on Friday encouraged banks to modify troubled commercial real estate loans, which are seen as a looming danger spot for the banking industry.
The regulators issued guidance to financial institutions and [...]

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“Huge Commercial Real Estate Crash Coming” – Wilbur Ross

by Moe Bedard

This has been mentioned on my blog for the last two years and now it looks like the dominoes are really starting to fall in commercial real estate. I am predicting the crash of 2010-2012 will wipe out 25-40% of all small to large sized US businesses and thus devastating the commercial sector.
The trickle down affect from lost jobs, more [...]

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Commercial foreclosure crisis to swallow local economies

by Moe Bedard

The impending  commercial foreclosure crisis will be one like our nation has never seen. Once bustling buildings of commerce, now many commercial projects have turned into ghost towns of economic destruction. With vacancy rates sky rocketing, tenants not paying rent, bankruptcies galore and that fact that no one is buying anything, can only mean one thing.
The commercial [...]

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Commercial mortgage backed securities begin to haunt investors

by Moe Bedard

The loans behind Maui Prince were financed by commercial mortgage-backed securities, or CMBS. The resort’s failure reflects the troubled market for these bonds, which are backed by a pool of mortgages on commercial properties. The market for CMBS is one leg of the stool supporting the commercial real estate sector, providing a vital source of [...]

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California Hotel Foreclosures Triple in Travel Slump

by Moe Bedard

Hotel foreclosures in California more than tripled in the first nine months of this year as business travelers and vacationers cut spending.
Foreclosures including the 400-room St. Regis Monarch Beach resort in Dana Point climbed to 47 in January through September from 15 a year earlier. Properties in default more than quadrupled to 259, Irvine, California-based [...]

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IRS Issues Rule To Aid Commercial Real-Estate Sector

by Moe Bedard

Owners and developers of commercial real estate will now have more flexibility to rework their mortgages or obtain loan extensions under a new federal tax rule, a change that could aid the troubled sector.
The new rule, issued by the Internal Revenue Service, will affect loans backed by shopping malls, office parks and other commercial properties [...]

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‘Special Servicers’ Flooded With Late Commercial Property Loans

by Moe Bedard

Deteriorating commercial property markets are putting commercial mortgage-backed securities to their first critical structural test. Failing it could keep financing tight and property values suppressed for years.
Since the 1990s, the CMBS practice has successfully financed commercial landlords by selling their loans to investors. But the engineers behind CMBS never contemplated that a bad recession, high [...]

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For Commercial Real Estate, Hard Times Have Just Begun

by Moe Bedard

As the commercial real estate market heated up earlier in the decade and lenders competed feverishly to issue ever-riskier mortgages, hundreds of bankers, investors, lawyers, brokers, appraisers, accountants and analysts flocked to an investors’ conference in Florida each January to celebrate their good fortune with lavish beach parties featuring bikini-clad models and popular entertainers.
But in [...]

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Commercial Real Estate’s $1 Trillion Time Bomb

by Moe Bedard

According to analysts at Deutsche Bank AG, as property value declines and scarce credit continue to drive commercial property developers and investors into default, total lifetime losses on banks’ $1 trillion “core” commercial-mortgage holdings, or those backed by income-producing properties, would reach between 11.6% and 15.3%, or $115 billion and $150 billion. Those expected losses [...]

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Commercial property execs expect more bad news

by Moe Bedard

* 93 pct say real estate values are lower than last year
* 82 percent say values will continue to deteriorate
NEW YORK, Aug 5 (Reuters) – An overwhelming majority of U.S. commercial real estate executives believe their industry is suffering and expect it get worse, according to a survey by the Real Estate Roundtable released on [...]

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Arizona commercial foreclosures rocket

by Moe Bedard

More than 2,000 commercial properties in Maricopa County have received 90-day foreclosure notices since Jan. 1, representing $6.3 billion in real-estate loans on which the borrowers have failed to make payments.
That number is staggering when placed in contrast with the average commercial foreclosure rate over the past decade, which has been practically zero.
Read more from [...]

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Foreclosure inn: Luxury hotels default

by Moe Bedard

CNN: Defaults of convenience
The defaults do not always result in foreclosure or sale of the business; at times, defaults are used tactically to force concessions from lenders. “[Often] there has to be a default before the terms of the loan can be renegotiated,” he said. “And the loan is a lot higher than the property [...]

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California hotels flood the market

by Moe Bedard

LA TIMES – Los Angeles County has the highest number of troubled hotels: 27, including the 469-room Marriott in downtown L.A., according to a new Atlas report.
With the trend expected to continue throughout 2009, as many as 500 properties could be in default by year’s end, Atlas President Alan X. Reay said.
Read more from the [...]

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