Commercial Real Estate Under Water
Monday, February 9th, 2009Most investors that bought commercial real estate in 2007 and 2008 (along with some that bought in 2006) have seen their property values drop 20 to 30 percent. As such, they’ve seen their entire equity investment in the property wiped out.
if these owners have stable cash flowing property, there is no immediate distress. The pain will come when these loans come due: they will join the ever-growing ranks of commercial borrowers that have loans coming due and are unable to refinance. What remains to be seen is whether lenders will extend the terms of these defaulting loans.
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