Saturday, May 30, 2009

CRE: See-Through Buildings on the Beltway

by Bill McBride on 5/30/2009 08:53:00 AM

From the Washington Business Journal: Commercial foreclosures start to spread across Northern Va. (ht Frank)

Anyone who follows the commercial real estate market knows there are buildings in trouble throughout Washington, but as one drives along the Dulles Toll Road or Route 28, it’s hard to miss the signs of distress. “See-through buildings” dot the corridor, bereft of the interior office walls that don’t show up until a tenant does.

In recent weeks, at least two lenders have given up the waiting game and taken the keys and the title back from the owners: Lincoln Park III and Monument III.

More than 50 office buildings stand empty or virtually empty in Northern Virginia, with 46 lying beyond the Beltway.
...
Some commercial buildings in the Washington region have lost as much as half their value but, on average, his clients are asking tax authorities for 20- to 25-percent reductions in assessed value, said [David Levy, a co-founder of McLean-based Value Advisors Inc., which represents property owners in tax appeals.] said.
...
By next year, a massive wave of properties financed in 2005 through the commercial mortgage-backed securities market will need to find new financing.
Vacant buildings. Prices plummeting. Massive refinancing needs of properties with negative equity. Sounds familiar ...

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