By David M. Levitt
July 8 (Bloomberg) -- Commercial properties in the U.S. valued at more than $108 billion are now in default, foreclosure or bankruptcy, almost double than at the start of the year, Real Capital Analytics Inc. said.
There were 5,315 buildings in financial distress at the end of June, the New York-based real estate research firm said in a report issued today. That’s more than twice the number of troubled properties at the end of 2008.
Hotels and retail properties are among the most “problematic” assets following bankruptcy filings by mall owner General Growth Properties Inc. and Extended Stay America Inc., according to the report. The scarcity of credit is causing property defaults in all regions and among every investor type, Real Capital said.
“Perhaps more alarming than the rapid growth in the distress totals is the very modest rate at which troubled situations are being resolved,” the report said.
About $4.1 billion of commercial properties have emerged from distress, according to Real Capital.
“In far more situations, modifications and short-term extensions are being granted, but these can hardly be considered resolved, only delayed,” the study said.
The June figures issued today are preliminary.
To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net.
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