The amount of troubled U.S.commercial real estate loans may double to $100 billion by year end as delinquencies rise and financing remains hard to find, Fitch Ratings said on Thursday.
Commercial real estate has emerged as one of the biggest threats to a rebound for financial institutions and the U.S. ecomomy, as falling revenue from office buildings, shopping centers and apartments reduce property values. Commercial real estate typically lags residential trends by at least a year.
Mortgages in or near default are being transferred to companies that specialize in the resolution of troubled loans at a blistering pace. The resources of these special servicers will continue to be stretched and open questions as to their abilities to handle the volume, Fitch analysts said.
"Compounding the problem is that many of these loans expected to default are large and complicated loans," Stephanie Petosa, a managing director at Fitch, said in a statement.
Commercial real estate has emerged as one of the biggest threats to a rebound for financial institutions and the U.S. ecomomy, as falling revenue from office buildings, shopping centers and apartments reduce property values. Commercial real estate typically lags residential trends by at least a year.
Mortgages in or near default are being transferred to companies that specialize in the resolution of troubled loans at a blistering pace. The resources of these special servicers will continue to be stretched and open questions as to their abilities to handle the volume, Fitch analysts said.
