Just as banks and special servicers are starting to make headway on resolving the existing commercial real estate loans that have gone into default, 2012 promises to bring a new wave of defaults as a new crop of loans comes to maturity. Since CRE loans are typically written for terms of five, seven or 10 years, this means that 2012 will be the year when five-year loans written in 2007—the height of the bubble—will come due. This has implications for banks and other lenders, for borrowers, and especially for investors hoping to take advantage of opportunities presented by the new wave.
For lenders, the question—as always—will be whether to refinance, foreclose, extend or sell the loans. For borrowers, decisions will be based in large part upon what lenders are willing to do. And for investors, the trick will be to sort through it all in search of bargains.
Exactly how much will be coming due in maturing loans and how much of that will be attractive to investors is hard to pinpoint, according to Thomas Fink, senior vice president and managing director at Trepp LLC in New York City. Fink says that, except for CMBS, where actual figures are available, any number as to the size of the maturing debt is an estimate. He estimates that the overall figure will be about $1 trillion over the next three years, which includes CMBS, bank CRE lending, GSE's and insurance companies.
Read more...GlobeSt.com - Here We Go Again - Daily News Article
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