RCA in the commercial property press:

Retail Recession Spreads To Wealthier Parts Of Southland

Los Angeles Times reports: With their rental income falling, some landlords are having trouble paying their mortgages and may face foreclosure. Banks have been reluctant to take over malls so far, but that patience may end soon, industry observers said.

"We're in the beginning stages of banks taking back assets," Kaplan said. "We'll see a lot of that occurring between June and December."

In addition to reduced income from rents, many owners of retail space are finding that -- like homeowners -- the value of their property has dropped considerably.

Those who bought their properties during the recent boom may be upside down on their mortgages, industry observers said.

Although many banks are still trying to avoid foreclosing, some are trying to improve their bottom lines by calling for landlords to put in more equity if they want to keep their loans, Kaplan said.

"Then they have a staring match to see who flinches," he said.

He predicted that commercial owners and lenders would soon come to terms with what property is worth now, and that property would be re-priced downward through foreclosures and sales.

But that will take some time, as long as 12 to 18 months, according to some analysts.

"There is a huge volume of stuff in trouble and only a tiny bit of it resolved," said analyst Peter Slatin of Real Capital Analytics.