Barclays: Commercial Mortrage Delinquencies Soar

The Business Insider ^ | 11/4/09

[FromLori]

Up 5.5% this month. Delinquencies in commercial mortgage-backed securities (CMBS) accelerated in October, according to a report from Barclays Capital (BarCap). The 30-plus day delinquency rate jumped 41bps to 5.5% in October as current loans deteriorated and transferred to special servicers.

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[FromLori]

Related link

http://www.housingwire.com/2009/11/04/cmbs-delinquencies-swell-to-55-in-october-says-barcap/

[2banana]

These banks are leveraged at 40-1. A 5% delinquency loss bankrupts them.

[Zeddicus]

Here we go... the crash in CRE that we knew was coming, but nobody wanted to talk about.

buckle up.

[TSgt]

Yet they are still building more commercial property on my side of town...

[Uncle Miltie]

Mortrageous!

[GraceG]

Jerry Doyle has been ringing the Commercial Real Estate alarm bell for the last THREE years!!!

No one is going to listen until this Bubble bursts, well explodes....

[RobRoy]

A friend of mine is a commercial real estate owner here in Seattle and says the market here is still way over-priced. He doesn’t buy in this area.

He also doesn’t understand it. To him it makes no sense. The asking prices are stupid high and the numbers don’t work. Seattle was behind the trend on residential though, so maybe the same is true with commercial. Eventually those that are compelled to sell will have no choice but to lower their price.

[Nervous Tick]

>> The asking prices are stupid high and the numbers don’t work.

Isn’t that true of pretty much every asset class these days?

[Dr. Thorne]

Not to worry.

"Obama gonna pay my mortgage!"

[SkyPilot]

He also doesn’t understand it. To him it makes no sense. The asking prices are stupid high and the numbers don’t work.

They all know that if a real readjustment happens, the floodgates will be released and they will be forced to lose all their profit (and then some) in order to unload their property. The same can be said for a lot of residential real estate.

Some people think they are really doing potential buyer a "favor" by lowering their asking price a small percentage, and then are incredulous when they still don't have buyers.

Has anyone ever watched the show Real Estate Intervention?

When you see these agents give seller the straight truth about the real value of the home they are trying to sell, the look on their faces is priceless.

[FromLori]

http://www.americanbankingnews.com/2009/11/02/federal-reserve-official-says-banks-have-more-real-estate-trouble-coming/

[qam1]

Here we go... the crash in CRE that we knew was coming, but nobody wanted to talk about. buckle up.

Everyone was talking about it (as well as ARMs) but with the stock market going up & up and nothing happening the CRE crash began to sound like Y2K and other scares, and who knows it still might end up that way.

[Timocrat]

When you see these agents give seller the straight truth about the real value of the home they are trying to sell, the look on their faces is priceless

Yup. And they've always got twenty reasons why the updated, larger house on a bigger lot, down the street which sold for $50K less than their asking price is not as good as theirs. It is amazing how long it takes for the penny to drop with some of the "Sellers".