Banks Failing to Come Clean on Commercial Real Estate Losses
Thursday, March 04, 2010
Source: Forbes
Forbes reports: Over the next four years approximately $1.4 trillion in commercial property loans will come due, with nearly half the properties expected to be "underwater" - meaning they're worth less than the amount owed. That's according to "Commercial Real Estate Losses and the Risk to Financial Stability," a report released last month by the Congressional Oversight Panel for the Treasury Asset Relief Program.
As of last December, $203 billion worth of US commercial mortgage assets were "troubled" (defined as properties that are still operating normally but facing financial distress, in the process of being restructured or extended, already real estate owned or in "resolved" status), according to Real Capital Analytics.
The risk that these commercial assets pose to the financial sector is very real. Commercial real estate loans are typically larger than others and are generally viewed as posing greater default risk. In this article, Forbes provides an abbreviated list of financial institutions that exhibit alarming levels of risk.
View the full article on Forbes: Banks Failing to Come Clean on Commercial Real Estate Losses
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Posted by: Matthew Stone