Archive for February, 2010

Industrial Market Still Struggling to Recover

Friday, February 19th, 2010

According to Real Estate News Utah in their article, “Industrial Market Still Struggling to Recover”, even with promise shown in the industrial market in the second quarter of 2009 (the square footage activity nearly doubled), the third and fourth quarters returned to the 2008 trend of a downward trend, largely because of limited funding.

Lease activity declined by 25% in 2009 and vacancies increased slightly. Industrial sales transactions fell by 22% in the past two years and very few land transactions and construction projects occurred.

The pace at which the market is able to recover by increasing credit and trimming unemployment is dependent on banker’s willingness to loosen their purse strings. Lease activity is expected to rise by up to 10% in 2010 and the increasing availability of sublease space is a good sign. Still, the struggling of the industrial industry will continue through 2010 and the lack of available credit will place a stranglehold on construction and new projects.

Read the full article from Real Estate News Utah here.

Posted in Distribution Centers, Industrial, Real Property, Warehouse, Western | No Comments »

FDIC Policy Could Harm Economy

Wednesday, February 17th, 2010

The willingness of the FDIC to share losses on failed banks real estate loans could accelerate a drop in commercial property prices and bush even more banks into failure, a Business Journal investigation reports. The FDIC covers nearly all the risk of loan and foreclosure expenses for banks who acquire troubled assets from failed banks. Many of these acquiring banks would rather foreclose than restructure loans.

While the FDIC sees these loss sharing agreements as the least costly option in bank failures, the irony is that other banks could be pushed into failure if they have to devaluate the commercial real estate on their books if prices drop.

Even when commercial real estate borrowers default on loans, banks can save money and keep borrowers in business by modifying them. The problem is that few banks have skilled staff to properly work out these deals, and FDIC loss-sharing agreements give them little incentive.

The aggressive tactics many banks have taken with commercial real estate loans in loss-sharing agreements will result in properties dumped onto the market at low values. This hurts other banks with similar loans as they feel pressure to write them down which could lead to more bank failures.

Posted in Bankruptcies, Financial Services, Foreclosures | No Comments »

Banks Suing Broadbent, Pushing One Strip Center into Bankruptcy

Saturday, February 13th, 2010

Indianapolis, Indiana based Broadbent Co.’s legal battles with lenders have escalated pushing one of its 34 strip malls into bankruptcy.  These legal woes come at a time when the recession has sapped demand for shopping center space and reduced the value of the underlying real estate.

The Indianapolis Business Journal reports in their article, “Banks Suing Broadbent, Pushing One Strip Center into Bankruptcy”, that Broadment is showing one-fifth of its 3.6 million-square-foot portfolio as immediately being available for lease. The problem is most acute at 5 strip malls that are less than half full, one of which being completely empty.

Broadbent now finds itself in a battle of suing and countersuing with banks over a variety of reasons including loans, interest and late fees. Immediate results have caused one of Broadbent’s subsidiaries to file Chapter 11 bankruptcy protection.

The problems faced by Broadbent reflect a trend in depreciating commercial real estate prices and the exiting of tenants to centers with lower rents. During the next 18 months $2 trillion in U.S. commercial real estate loans will come due for renewal and hundreds of companies will end up in the same situation as Broadbent. The gigantic amount and number of real estate loans coming due is a perfect storm of problems for the industry.

Read the full article from the Indianapolis Business Journal here.

Posted in Mid America, Real Property, Retail, Strip Centers | No Comments »

TARP Panel: Small Banks Are Facing Loan Woes

Thursday, February 11th, 2010

Recently, a congressional inquiry concluded that nearly 3,000 small U.S. banks could be forced to dramatically curtail their lending because of losses on commercial real-estate loans. These banks that are being threatened by loans they made for shopping centers, offices, hotels and apartments represent a major cog in the U.S. credit systems, especially to entrepreneurs.

Of the roughly 8,100 U.S. banks, some 2,988 small institutions have problematic exposure to commercial real-estate loans, meaning their level of these loans is at least 300% of total capital or their construction and land loans exceed 100% of total capital.

Since January 2008, 181 banks and savings institutions have been seized by regulators and these loan losses cause deep concern in the stability of many more. Few experts are predicting resurgence in commercial real-estate anytime soon. Commercial real-estate debt in the U.S. is about $3.4 trillion in which banks hold about 45% of.

From 2010 2014, some $1.4 trillion in commercial real-estate loans is coming due, with nearly half of them having the borrower’s debt as more than the property value.

Posted in Banks, Financial Services, Real Property | No Comments »

Georgia Deadlines

Monday, February 1st, 2010

In Georgia, the Board of Tax Assessor’s Offices will be adjusting the 2010 tax value on several thousand properties as assessors review the real estate sales and foreclosure data. To preserve your rights to contest the market value of your property a Real Property Tax Return must be filed.

The property tax return process begins with the timely filing of a Real Property Tax Return. For the following counties, this occurs anytime between January 1 and March 1, 2010. Returns are not accepted via email or fax – no exceptions.

March 1 counties include:

Bibb, Butts, Chatham, Clarke, DeKalb, Gwinnett, Hall, & Newton

All other counties have an April 1 deadline.

If your value is not accepted, a Notice of Change in Assessment will be issued to you (scheduled mailing by mid April 2010). The notice allows you to appeal the value, which will result in a review process and possibly further into hearings.

Posted in Areas, Eastern | No Comments »