WASHINGTON, DC-The volume of distressed properties appears to haveplateaued for this cycle at $186.9 billion, which isholding near the peak of $191.5 billion in October 2010,according to a new report by Delta Associates that uses numbersprovided by Real Capital Analytics. Delta has been noticing thistrend for several months, the firm’s CEO, Greg Leisch, toldGlobeSt.com in an earlier interview.

|

This latest examination of the study looks beyond the industry’simmediate sigh of relief and asks the question: when will thevolume of distress finally begin to recede? Unfortunately, 2012 isthe popular answer. To that end, Delta notes that the distressplateau began in the spring, but it doesn’t foresee any meaningfulprogress until 2012, as lenders continue to extend debtobligations, and commercial property values are stabilizing in manymarkets.

|

Next year may well prove to be another painful 12 months, thereport notes. There is some $300 billion of loans coming due. Also,fundamentals still have a long way to go if they are to reliablysupport the increasing property valuations being spotted in certainmarkets.

|

The report finds that the office sector continues to representthe largest share of distressed real estate at $45.6 billion, withapartments moving into second place with $37.8 billion of distress.The hotel market, which has $33 billion in distress, is in thirdplace.

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.