Commercial Property Sector Defies Expectations with First Quarter Growth
USA Today reports: Conditions in the US' commercial real estate sector have continued to improve across a variety of metrics over the first quarter of 2011, bolstered by both the broader economy’s recovery and a general lack of new space coming to market. In fact, the sector has defied analysts’ expectation that troubled loans from the boom years would inhibit a return to growth. According to a recent report by Real Capital Analytics (RCA), default rates for commercial property loans fell for the first time since 2005 in the first quarter, from 4.36% to 4.28%. The absolute total of outstanding distressed loans also fell over the course of the quarter, from $188.0 billion last September to just $181.0 billion in February.
Of this turn of events, RCA’s Global Chief Economist Dr Sam Chandan told USA Today that, “Worst-case scenarios have been avoided.” The reasons for this include stabilization in occupancy and vacancy rates, as well as a rise in pricing for properties in the nation’s leading markets and, particularly, the most sought-after trophy properties. As lenders expand and additional sources of credit, such as CMBS, come to market, one can expect the commercial real estate sector to continue its return to normalcy.
View the full article on USA Today: Commercial Property Sector Defies Expectations with First Quarter Growth
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Posted by: Nina Turner