RCA in the commercial property press:

CRE Warning Signs: Get Ready for RTC 2.0

GlobeSt reports: Get ready for RTC 2.0. At least, that's Mark Grinis' take on the current commercial real estate market. Grinis, speaking at RealShare's Distressed Assets conference in Dallas yesterday, said this downturn could be "tougher than the last cycle." Today, unemployment has already surpassed the last cycle and delinquencies continue to trend upward, the Distress Service Group leader for Ernst & Young LLP said.

Grinis was followed by Robert M. White, Jr., founder and president of Real Capital Analytics, in a special presentation entitled, "Putting Distress in Perspective." Therein, White stressed the opportunities on the table, even while delivering some dismal data points. There's about $135 billion in defaulted commercial mortgages, which has more than doubled since the beginning of the year, he said. Each month, another $10 billion comes onto the distressed markets. And CMBS loans are defaulting faster than any other loans out there.

Still, White believes now's the time in the market when people are starting to get active and vested. Noting that the transaction market has most likely hit bottom, White said that Q3 should show a 20% gain in transaction volume in the US. He also noted that some international markets, such as Asia, the UK and Australia, are already seeing a "tremendous rebound of activity." But, he noted, it's tough to say right now in a market where there are so few trades.

Learn more about RCA's reports and analysis on commercial troubled assets.

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Posted by: Matthew Stone

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