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Lenders increase “off-market” sales April 6, 2011

Posted by Erik Swanson in Articles, Investment Tools, Research/Data, Retail News, Sale.

Many of us in the commercial real estate business have been frustrated by the extend and pretend policies that have stalled a meaningful recovery in the broader market. Lately however, foreclosures and note sales have increased significantly and lenders are showing an eagerness to clear their books of these toxic assets. 

…the estimated 7,000 CMBS loans that were in special servicing as of Dec. 31, 2010, only 354 were officially reported as having been restructured or modified.

That is a far cry from a year earlier when lenders were extending more than 80% of troubled loans through various forbearance and modification programs. Lenders are foreclosing on about 71% of these loans today and modifying only about 29%. 

Locally, our own experience supports this data. Last month, we closed 3 separate distressed sales.  In two cases the lender sold the note, choosing to let a new investor workout a deal with the borrower. The other was an REO sale involving a severely distressed shopping center in which the lender originally wanted to lease-up  the asset before selling.  After receiving multiple “off market” offers to purchase in a relative short amount of time, and considering the time and cost to stabilize, the lender chose to sell and let an investor take on the project. 

-check out NREI article here.



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