Is Commercial Real Estate the Next Shoe to Drop?
The Daily Record (Baltimore) › March 16, 2010
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Summary
For more than a year, economists and market-watchers have been wondering out loud whether commercial real estate is the "next shoe to drop" in the country's ongoing economic crisis.
Last month, a Congressional Oversight Panel made the issue an official worry of the U.S. government by publishing a report titled, "Commercial Real Estate Losses and the Risk to Financial Stability," which outlined the problems posed by commercial real estate debt that might go unpaid in solid, daunting numbers: $1.4 trillion in CRE loans coming due in the next four years, and few banks, especially small, regional banks, have the capital to protect themselves against losses.See the full content of this document
Extract
Is Commercial Real Estate the Next Shoe to Drop?
Commercial real estate delinquencies nationwide rose to nearly $130 billion in the third quarter of 2009 from less than $20 billion in 2007, the report said. In Maryland, distressed real estate loans climbed to $3.5 billion from $300 million between December 2008 and December 2009, according to research firm Real Capital Analytics.
To determine if commercial real estate loan problems have hit Maryland-based banks, The Daily Record compared the percentage of noncurrent loans -- those unpaid for 90 days or more -- in their CRE portfolios at ...See the full content of this document
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