Foreclosure Notices Rise From Q1

"This was the first grouping of buildings in six or seven months that have been investment-grade buildings," George Roddy Sr., president of the locally based Foreclosure Listing Service Inc., tells GlobeSt.com. If history repeats itself, less than 15% of postings for the larger properties will make it to the June 7 auctions on courthouse steps in Dallas, Denton, Collin, Rockwall and Tarrant counties.

The roster includes a 1950s-era, 448,000-sf office structure on 19.6 acres near Dallas' Love Field that's come to market over a $27-million mortgage originated in April 2000, according to Roddy. Also up for grabs is a four-property multifamily portfolio with 1,230 units along Central Expressway and Walnut Hill Lane in Dallas and the Ridgmar area in Fort Worth. The foreclosure notice went up over a $24.7-million mortgage floated in April 2004. A trio of office/showroom buildings, shouldering an $11.2-million loan secured in December 2000, also made it to the Dallas County docket. Built in the mid-1980s, the buildings, totaling 223,000 sf, are located in the Addison Airport-Richardson area.

Three other owners received notices for multifamily properties in McKinney, Harvest Hill in Dallas and Grand Prairie. The complexes, ranging from 240 to 300 units, hit the auction block for notes running from $6.9 million to $10 million. The largest retail asset is an 82,000-sf center in Watauga. The mid-1980s product went on the roster for a $6-million note that was originated in 1998, Roddy says.

Roddy says 25% of the commercial foreclosure notices generally make it to the courthouse steps. If it's an investment-grade or larger asset, the chance of sale is significantly slimmer, he says, adding the odds drop to 10% to 15%.

Despite the uptick in this year's quarter-to-quarter reading, Roddy says foreclosures for the year-to-year comparison decreased. The midyear count dropped 19% from 674 properties in 2004 and 16% for the second-quarter comparison, according to the latest research.

"Although D/FW Metro commercial foreclosure postings are expected to continue with this gradual decline, commercial postings have consistently exceeded 200 postings per quarter for the last 13 consecutive quarters, beginning with the second quarter of 2002," Roddy says in a press release. "Since posting activity is known as a lagging economic indicator, we will need to see several more months of encouraging numbers from the leading economic indices to have quarterly postings dip below 200."