Quarter of All Commercial Loans Coming Due in Next 4 Years Underwater

Commercial-real-estateAs the residential real estate market is showing signs of stabilizing, the recession is doing some serious damage to the commercial real estate market. Buildings are selling for less than their loan values and vacancies are soaring.

But here is the statistic that blew me away and should have bankers in a panic.

Landlords who are “under water” – and those who lent to them – are facing greater losses. More than a quarter of the $524.5 billion of commercial mortgages on banks’ books that will mature in the next four years are backed by real estate that is now worth less than the mortgage, according to Foresight Analytics, a research firm in Oakland, Calif. That underscores the potential for big losses faced by U.S. banks just as they are still reeling from the home-mortgage meltdown. via WSJ

Think of that, more than 25 percent of all commercial loans coming due in the next 4 years are underwater. And commercial property values are not at a bottom yet.

 

Related posts:
  1. Alert The Media – Banks Are Making Commercial Real Estate Loans
  2. Trillion Dollars of Commercial Real Estate Loans Coming Due?
  3. Commercial Large Project Lending Improves
  4. 90 Billion In Commercial Foreclosures – REITS and Vultures Racing In
  5. Who Will Refinance All The Commercial Real Estate Debt

There Are 4 Responses So Far. »

  1. [...] Read the original post: Quarter of All Commercial Loans Coming Due in Next 4 Years … [...]

  2. This is terrible. Just when we think that one market is done tanking, the other is headed for the same thing. I really hope that our economy will start picking back up.

  3. Those numbers sound scary but how many businesses own their land/buildings out right/without a loan? Numbers can be deceiving. Many businesses don’t even operate out of buildings nor need land to function. Just sounds like another thing to scare people and further mess up the real estate market.

  4. I would like more information on the bank loans coming due.
    Thank you.

    John Davis

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