Distressed commercial real estate in the United States continues to fall from its $191.5 billion peak in March of 2010. According to The Washington Post, properties in default or foreclosure and real estate taken over by lenders totaled $166.9 billion in January 2012, down $4.7 billion since October 2011. Several factors are leading to the decline, including lenders extending debt obligations and commercial property values stabilizing, if not rising, making them no longer worth less than their loans.
Improvements are expected to continue through 2012 and beyond with the real test coming quickly with $300 billion in loans coming due in each of the next couple years. Still though, the looming volume of stressed properties is of concern in the short term. Maturing loans, bankrupt tenants, under-performance, financially troubled owners and other significant obstacles could compound additional distress in the future.
To read the full article from The Washington Post, click here.