Growing List of Properties Face Distress
The New York Times reports: For many months now, the commercial real estate industry has been grim about its future, but it has been hard to quantify just how bad things are. The default rate for loans packaged into securities and sold on Wall Street has remained well under 1 percent, yet today that low figure is considered highly misleading.
Real Capital Analytics has compiled data showing that at least $107 billion worth of income-producing property (including hotels, offices, apartment complexes and warehouses) is already in distress or is headed in that direction.
The distress is occurring all across the country, but New York tops the list because of the number of costly high-profile transactions that occurred during the boom years. Real Capital Analytics’ list includes a total of 268 properties in the New York area, with a value of $12 billion, as already or potentially in trouble.
“The trouble that’s emerged is bigger than most of us expected,” Robert M. White Jr., the president of Real Capital Analytics, said in an interview in his Manhattan office, “and the size of the problem that is potentially out there is much greater than we thought we would be able to quantify at this point.” Many of these difficulties have surfaced just since mid-September, when the financial world suffered a series of jolts, including the collapse of Lehman Brothers, he said.
View the full article on The New York Times: Growing List of Properties Face Distress
Posted by: Nina Turner