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:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Genetic Mapping Triggers New Hope on Schizophrenia

Tuesday, 22 Jul 2014 07:28 AM

 . . .

Apple Asks Suppliers to Produce up to 80 Million Large-Screen IPhones

Monday, 21 Jul 2014 21:21 PM

Apple has asked suppliers to manufacture between 70 million and 80 million of its two upcoming large-screen iPhones by t . . .

Lake Ontario 'Shark' a Hoax to Promote Discovery Program

Thursday, 17 Jul 2014 12:58 PM

Lake Ontario's mysterious "shark" turned out to all be a hoax concocted by a film crew to create publicity around Discov . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

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