Posts Tagged ‘commercial property’

I just read an article (yes another one!) to support predictable real estate and the PRIME OPPORTUNITY in short sales.  There is and will be a growing issue with Commercial Real Estate and defaults.  It is predicted and it is expected.  The cycle of real estate is reliable. Each sector follows each other.  We have seen (and continue to see) the correction with the residential market and as it turns toward recovery (projected 0ut another 3 years) so does the turn for the Commercial Real Estate.  What does that mean to you and I?  Well it depends.  If you prepare and plan for it, it could mean MAJOR OPPORTUNITY for short sales, and the ability to use this previous market (the one we are in now) to support our level of experience in dealing with a market such as this.  Winning over CASH SUPPORTERS to invest with (a.k.a. investor partners) will be a key component to the game.  Build it and they will come.

http://realtytimes.com/rtpages/20100225_losses.htm

Keep it Short,

Mike Knows

Real Estate Econometrics, a property research firm, has estimated that default rates in commercial mortgages will rise to 4.1%, a 17-year high, in the fourth quarter of this year. Commercial mortgages are defined as loans on non-farm, non-residential buildings such as offices, retail centers, and warehouses. A loan is considered delinquent when it’s 30 to 89 days late while a default is said to have occurred when a loan is 90 or more days past due. The market for refinancing has been hit as the recession has taken its toll on rents. “The dramatic decline in real economic activity and labor markets since last September has undercut property fundamentals. The decline puts an increasing number of loans at risk,” said Sam Chandan, chief economist of Real Estate Econometrics. Commercial mortgage defaults already are at a 15-year high after climbing to 2.3% in the first quarter of this year. Real Estate Econometrics projects the default rate on commercial mortgages will reach 5.3% in 2011 before starting to decline.