An interesting discussion is going on among Industry Experts, as to what is expected to happen in the Commercial Foreclosures around the country. The tidal waves of foreclosures have already started and people in the commercial real estate industry are watching the situation, keeping their fingers crossed. Whether the oncoming onslaught will be on the scales of a devastating ?tsunami? or it will not be thus fierce, but however impact the Commercial Real Estate market to lose heavily like a ?Slow Bleed??
A blog-post appearing on the San Francisco Times today under the head ?Bay Area Biz Talk? throws light on the above question. The reporter, Blanca Torres, narrates her experience in attending a panel discussion titled ?How to survive the Commercial Real Estate Tsunami? and says some of the speakers participating in the above discussion, came up with a new nomenclature for the impending Commercial Property foreclosures as only a ?Slow Bleed?.
According to experts, the wait for the commercial foreclosures flooding the market is going to be a longer one, than to strike in the immediate future, given the indications of present economy of the country and the heavy downfall of residential foreclosure properties. Seizing the opportunity to cash in, there are already dozens, if not hundreds, of hedge funds preparing themselves.
Panellists participated in the group discussion included ? Mathew Anderson of Foresight Analytics, Todd Mirell, a commercial mortgage officer with Union Bank, Ted Norman of Debt Advisory Group, and Maura O?Conner, an attorney with Seyfarth Shaw LLP. And the Panel Moderator was Tony Wood, a broker with TRI Commercial. He has just published a book titled ?The Commercial Estate Tsunami?.
The reporter says there was unanimous agreement among the speakers that the commercial real estate is neck-deep in trouble and it is a fact that more number of mortgage loans fall into delinquency on commercial properties, which have lost significantly in their market value. But the speakers differed on the point, whether the volume of onslaught can be to the magnitude of a ?tsunami ?and were of the opinion, possibly it will be a ?slow bleed? ? meaning many commercial property owners will lose their properties for quite longer periods of time ? say for several years from now.
The main points gathered from the Panel discussion were as follows:
* Lending banks, although not in real estate business, do not want to incur huge losses, by giving away the properties they repossess through foreclosures
* The size of the lender decides loan modifications ? the bigger is more likely to work out the mortgage to avoid delinquency. They have more flexibility to extend the loan than a smaller lender, tied up with loans of too much money.
* A borrower gets more leverage and power to negotiate with the size of the loan ? a loan of $500 million makes the lender think not to let go bad than a loan of $1 million
* Troubled borrowers are advised, not to wait till they are about to lose the property, but think in terms of finding an equity partner. It is always better to have a sharing partner, rather than losing the property as a whole.
* ?Crown jewel? properties won?t be sold by lending banks for pennies on the dollar. They would prefer to hold them till the market recovers before selling.
Amitesh Kumar, expert author of real estate market, thrives on writing for different niches. For Revitalizing the US Real Estate Market One Property at a Time then better to visit here
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