U.S. Commercial Property Loan Defaults Soar
Posted By thestatedtruth.com on December 1, 2009
US Commercial Property Loan Defaults Soar-Reports
Mon Nov 30, 2009 11:59pm EST
By Ilaina Jonas
NEW YORK, Nov 30 (Reuters) – The default rate for commercial real estate loans held by banks reached the highest in 16 years and the outlook looks worse, according to a report by a research firm released on Monday.
The picture for loans underlying commercial mortgage-backed securities looks as bleak, according to another report.
The national default rate for commercial real estate mortgages held by banks and other depository institutions reached 3.4 percent in the third quarter, up 0.52 percentage point from the second quarter, according to research firm Real Estate Econometrics.
It was the largest one-quarter increase since quarterly data became available in 2003.
At 3.4 percent, the U.S. default rate for commercial real estate mortgages — on office, industrial, hotel and retail properties — held by banks, thrifts and other depository institutions was the highest since 1993, when the default rate was 4.1 percent.
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