Experts in distress, including the DAI advisory board members providing insights here, agree that 2012 will see more problem properties emerging than this year, but most believe this larger pipeline will mean good things for the industry. The few naysayers, however, posit that the third quarter’s depressed fundamentals, including the European debt crisis, signal too many problems for distress professionals in the next few years.
Alan Pontius, national director of special assets for Encino, CA-based Marcus & Millichap, says these past two years have shown improvement, conflicting with the prediction for 2012. “There’s been a shrinking volume overall in delinquencies for the past seven quarters,” Pontius says. “We’re also seeing workouts outpace the new introduction of distress into the system.” Outstanding distress as of early November was $172.4 billion, and workouts were expected to make a strong dent in this figure, according to Real Capital Analytics.
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