Commercial Mortgage Defaults Near Record High

Monday, 03 May 2010 02:32 PM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Commercial real estate defaults are approaching a record high, and depending on your point of view, that’s either a positive or a negative.

It’s a positive if you see it as a buying opportunity for distressed investors, and it’s a negative if you already hold the securities backed by commercial mortgages.

Fitch Ratings expects more than 11 percent of the $536 billion of loans packaged into commercial-mortgage-backed securities to be at least 60 days past due by Dec. 31, The Wall Street Journal reports.

The late-payment rate has jumped to 7 percent in the last year, because landlords have been forced to cut rent or have been stiffed on rent payments.

That’s making it difficult for property owners to keep servicing their debt. And the stagnant market for new commercial-mortgage-backed securities has made it impossible to refinance some debt as it comes due.

As a result, bondholders are confronted with bigger losses, and property owners and lenders face strong impetus to restructure their loans.

Fitch anticipates a $4.2 billion deal underwritten in 2006 by Goldman Sachs and Greenwich Capital, will produce a 11.7 percent loss, the highest of any 2006 deal it examined, the Journal reports.

Donald Trump, for one, sees the hard times as a buying opportunity.

“It’s a time when if you have cash, you can make some fantastic deals,” he told CNNMoney.com. “We’ve been buying a lot of things that I never thought would be buyable.”

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Catholic Journalist: Pope Didn't Contradict Church on Evolution

Thursday, 30 Oct 2014 16:09 PM

The Vatican has accepted evolution as reality for much longer than people realize, but that fact got lost in the reporti . . .

Giant Sunspot Has Scientists Scratching Their Heads

Thursday, 30 Oct 2014 06:47 AM

A colossal sunspot - at 80,000 miles wide, the largest seen in about a quarter of a century - is acting peculiarly, prod . . .

Group Says Piece of Metal Found on Island Is From Earhart's Plane

Wednesday, 29 Oct 2014 23:23 PM

Researchers probing the 1937 disappearance of famed American aviator Amelia Earhart's plane said on Wednesday they now b . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved