L.A. commercial real estate owners struggling, report says
Los Angeles Times reports: Los Angeles commercial real estate continues to spiral downward, according to a report released Wednesday by Real Capital Analytics Inc.
The New York-based real estate research firm found that Los Angeles had $4.5 billion in troubled commercial properties at the end of June.
In all, 263 properties are in default, foreclosure or bankruptcy, the firm reported. At the beginning of the year there were 113, a 133% increase.
But things could be worse, said Dan Fasulo, RCA managing director of research. Compared with the national picture, Los Angeles is faring well.
"Los Angeles has held up better than its peers," Fasulo said. "For example, you couldn't give away a commercial property in the Midwest right now."
Nationally, RCA found 5,315 troubled commercial properties valued at more than $108 billion.
The report lists hotels and retail properties as the most "problematic sectors" and goes on to note the bankruptcy filings by mall owner General Growth Properties Inc. and hotel chain Extended Stay America Inc. The report said the lack of available credit is causing properties to fall into default across the country and among every investor type.
"Excess leverage is endemic to every type of investor, all of which are facing difficulties refinancing mortgages as they come due," the study said.
The figures released Wednesday are preliminary, the report said.
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Posted by: Nina Turner