There is currently about $550 billion in outstanding commercial real estate loans and according to Kenneth Rosen, who heads the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley, these loans are "going badly at a rapid rate."
How rapid? We don't know but we think the next big thing to be picked up by the main stream media will be the commercial real estate collapse that has been invisibly crashing in the background while claims were made that the recession was over and economic recovery was up ahead.
Please also consider the following from Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations:
"The 54 percent overall decrease in commercial/multifamily lending activity during the third quarter was driven by year over year decreases in [mortgage] originations for all property types. When compared to the third quarter of 2008, the decrease included a 62 percent decrease in loans for retail properties, a 59 percent decrease in loans for health care properties, a 58 percent decrease in loans for industrial properties, a 56 percent decrease in loans for office properties, a 46 percent decrease in hotel property loans, and a 40 percent decrease in multifamily property loans."
This is an across the board collapse of commercial property loans which is a reflection of an across the board penetration of deflation.
(Headline source: Real Capital Analytics.)
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