As CRE Loan Stress Peaks, Debt Investment and Modification Strategies Change
The level of commercial real estate loan distress appears to be at or nearing its peak – a welcome sign that the worst of the Great Recession may have passed. And with this new phase, the market for distressed commercial real estate borrowers and investors is also undergoing major changes.
NAI Global noted that LNR Partners and CIII Capital Partners are selling a tremendous amount of product through a large auction now and the FDIC has another $700 million portfolio to be sold in the third quarter of 2011.
“We believe we are at the tipping point towards a more normalized market where new originations will commence in early in 2012 reflecting normal CMBS output and lending patterns similar to 2005 and 2006,” the company said. “Though 2012 will see more distressed debt opportunities we see an overall slow down as the economy and its recovery finally impacts real estate positively.”
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