Economic growth in the US is slowly trending upward, as are commercial real estate fundamentals. The recovery isn’t rapid enough, though, to keep loan delinquencies from ticking upward at the same time. Lenders, now in a better position to pick their battles, are growing more selective about extending loans. All of this portends a further rise in commercial mortgage defaults, whether on balance-sheet loans or CMBS, and the potential for more assets to come to market through REO sales.
Just don’t call it a flood. “The real estate is getting worked out; it’s not a tsunami because of QE2 and the low interest-rate environment,” says John Strockis, executive managing director for asset services at Newport Beach, CA-based Voit Real Estate Services. “That has delayed the massive wave that everybody had anticipated.”
Nonetheless, Transwestern’s Steve Pumper thinks we’ll see more foreclosures this year.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
