A US$90b debt wave shows cracks in US property boom
Delinquency rate for commercial mortgages packaged into bonds expected to rise to 5.75% in 2017
New York
A US$90 BILLION wave of maturing commercial mortgages, leftover debt from the 2007 lending boom, is laying bare the weak links in the US real estate market.
It's getting harder for landlords who rely on borrowed cash to find new loans to pay off the old ones, leading to forecasts for higher delinquencies. Lenders have become choosier about which buildings they'll fund, concerned about overheated prices for properties from hotels to shopping malls, and record values for office buildings in cities such as New York.
Rising interest rates and regulatory constraints for banks also are increasing the odds that borrowers will come up short when it's time to refinance.
"There are a lot more problem loans out there than people think," said Ray Potter, founder of R3 Funding, a New York-based firm that arranges financing for landlords and investors. "We're not going to see a huge crash but there will be more losses th…
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
Forrest Li’s wife buys Gallop Road bungalow next to the one he has redeveloped
Chinese restaurants spur Hong Kong’s retail property recovery
Asking rents down as demand slows and rental listings surge
Eurozone consumers increasingly struggle to pay for housing
Too many property agents? Cap commissions on home sales
URA releases reserve list site in Zion Road after developer commits to bid at least S$604.6 million