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Brian
Posts:2210
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| 09/13/2008 9:46 PM |
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Distress soon could hit U.S. commercial property
Mon Sep 8, 2008 11:53am EDT
By Ilaina Jonas - Analysis
NEW YORK (Reuters) - U.S. commercial real estate prices are likely to tumble over the next 12 to 18 months as more borrowers default on their loans and regulators crack down on banks, pushing even more properties onto the market.
Since the market's peak in 2007, the availability of debt -- the lifeblood of commercial real estate -- has dried up and choked off sales. Borrowers have resisted selling because of falling prices. Banks have not sold off their troubled loans, fearing a massive write-down of all commercial real estate loans. But the clock looks to be running down.
"We're going to see a whole lot more trouble going forward," Peter Steier, vice president of Inland Mortgage Capital Corp said.
http://www.reuters.com Commercial Real Estate Next
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Brian
Posts:2210
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| 10/16/2008 1:24 PM |
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Vacancies on the rise
Store vacancies at regional malls such as Randall Park are up 6.6%, which is the largest increase since early 2002, according to real estate research firm Reis.
In some malls, store occupancy rates are falling below 75%, said Ivan Friedman, president & CEO of RCS Retail Real Estate Advisors.
Premier malls that churn higher sales per square foot - such as Roosevelt Field on New York's Long Island - are less threatened by this trend, Friedman said. Rather, it's the independently owned smaller regional malls that could be forced to close if business continues to evaporate.
Moreover, in a down market, a defunct mall is unlikely to be replaced with any new economic activity for some time, said Suzanne Mulvee, a real estate economist with real estate research firm Property & Portfolio Research (PPR), Inc.
Mall Vancancies on the Rise
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tpc
Posts:498
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| 10/17/2008 4:56 PM |
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[quote]NEW YORK (Reuters) - U.S. commercial real estate prices are likely to tumble over the next 12 to 18 months as more borrowers default on their loans and regulators crack down on banks, pushing even more properties onto the market.[/quote]
Brian-we are very likely to have a debacle like we had between 1985-96 when the RTC took over many defunct savings and loans. There are a lot of small business owners who will be going out of business as a result of this locked up financing market. The banks have no choice but to pull in some of the loans being made to businesses of all sizes because the banks no longer meet the reserve requirements established by the fed which is currently 10%. If a bank has $10M in capital losses and no excess reserves, they will be required to reduce their loan portfolio by $100M to meet their statutory 10% reserve requirement. If you are a sole proprietor with a store in the mall, you are probably SOL in terms of getting your usual bank lines to finance inventories. This is happening already to businesses (retail and service) all across the country. |
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Brian
Posts:2210
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| 10/27/2008 2:06 PM |
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Experts predict tough times for commercial landlords
By Mike Freeman
STAFF WRITER
October 25, 2008
So far, commercial real estate has avoided the massive mortgage defaults that have hit homeowners, even though San Diego County offices, shopping centers and hotels saw similar surges in prices over the past few years.
But experts are beginning to talk about possible tough times ahead for commercial landlords, particularly as building owners try to refinance maturing debt in today's tight-fisted lending environment.
http://www.signonsandiego.com/uniontrib/20081025/news_1b25real.html
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Brian
Posts:2210
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| 11/05/2008 12:54 PM |
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SoCal office owner skips payment on $1.5 billion loan
November 4th, 2008, 9:58 am · 13 Comments · posted by Jon Lansner/ocregister.com
A real estate investment trust run by KBS Realty of Newport Beach — owed $175 million by a Mexican company’s U.S. real estate operations — says the borrower is late on $105 million in principal due on the overall $1.5 billion loan package. The borrower, part of Cabi Properties, used the money last year to buy 33 office properties (including 2 in O.C.) throughout SoCal from General Electric’s Arden real estate arm.
socal-office-owner-skips-payment-on-15-billion-loan
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title
Posts:20
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| 11/05/2008 5:33 PM |
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Brian,
Great article on Marketwatch.com regarding this issue today. New York commercial real estate which for a long time was thought to be immune is "projected" to have a tough 2009.
On the flip side and could be a saving grace for commercial real estate in San Diego. I have seen many commercial transactions and most have a significant down payment. The "funky" loan products were not available to the commercial market.
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