Here is a great article that discussed the looming concerns for commercial real estate across the country for the next several years.
Faltering Property Values Hamper Commercial Mortgage Refinancing Efforts
Aug 5, 2009 6:29 PM, By Sibley Fleming
While there’s been a lot of buzz surrounding the “2011 issue” — a term coined by commercial real estate experts in reference to $296 billion in maturing loans originated in 2006 and 2007— refinancing some $250 billion in loans coming due this year holds no shortage of drama.The percentage of foreclosed commercial mortgages held by banks at the end of the second quarter more than doubled to roughly 4.3%, or $7 billion total, compared with a year earlier, according to estimates by Foresight Analytics. The research firm projects that percentage to reach 4.6% by the end of 2009.As valuations and net operating income continue to decline and debt financing remains scare, borrowers are feeling the pinch. Valuations are reaping the most havoc on maturing loans. Since peaking in October 2007, asset values have plummeted 29.5% year-to-date through April, according to the Moody’s/REAL Commercial Property Price Index.
Click here for the full article on the National Real Estate Investor Web site:
http://nreionline.com/news/maturing_loans_2009/
