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Monday, July 27, 2009

Report: 5000+ CRE NODs in March

by Calculated Risk on 7/27/2009 01:36:00 PM

CRE: Commercial Real Estate. NOD: Notice of Default.

From Bloomberg: Almost $165 Billion in Commercial Mortgages to Come Due in ’09

Almost $165 billion in U.S. commercial real estate [shops, offices, hotels, apartment buildings and land] loans will mature this year and need to be sold or refinanced as rents and occupancies fall, according to First American CoreLogic.
More than 5,000 properties in the 10 biggest U.S. metropolitan areas got at least one default notice in March, marking the first time that’s happened in First American records going back to January 2003.
“As long as prices contract, we expect loan performance will worsen and that will make financing difficult,” Sam Khater, senior economist for First American, said in an interview. “Delinquencies and notices of default are rising, and we expect that to continue.”
These defaults will push down CRE prices and also hit many regional and local banks that had excessive loan concentrations in Construction & Development (C&D) and CRE loans. The FDIC will be very busy ...