Colleague Garren Grup in Naples, Fla. clued me into a news story in USA Today that I missed, which notes that the recovery in commercial/investment real estate appears to be exceeding projections. We can only hope.
From the news story: "Lenders were still saddled with $181 billion in distressed loans in February, according to Real Capital Analytics. But that's down from $188 billion in September. Mortgage defaults for office, retail, and industrial building loans dipped for the first time since 2005 in the fourth quarter, to 4.28 percent from 4.36 percent. They should fall further this year says RCA Economist Sam Chandan. "Worst-case scenarios have been avoided," he says."
Further, investors are clamoring to scoop up well-leased office buildings in large markets like New York City and Washington DC. The reason? Virtually no new development in the past few years, creating a dearth of high-quality inventory.
The full USA Today story may be read by clicking here.
The hope is that rising prices will temper additional foreclosures on the $1.4 trillion in commercial mortgage that some financial houses say are maturing by 2013.