Clay Lee
Broker/Realtor®
Read my blog below
U.S. Commercial Real Estate Behind on the Mortgage
May 7th, 2010 Categories: The Realtor's Life
The average U.S. citizen has experienced at least some of the effects of a weak economy over the past couple of years. However, these effects have finally trickled their way up and become evident in the realm of commercial real estate. Commercial real estate refers to buildings or land intended to generate a profit; there are five types of assets in CRE: Muti-family (condos, large apartment complexes); Retail (malls); Office (businesses); Industrial (factories, warehouses); and Lodging (hotels, motels).
The chart below displays the percentage of CRE assets which are past due, comparing figures from Febuary 2009 in the second row, to figures from February 2010 in the third row.
Multi Family |
Retail |
Office |
Industrial |
Lodging |
3.73% |
1.73% |
0.87% |
1.18% |
2.04% |
9.87% |
5.74% |
4.33% |
4.75% |
15.65% |
The percentage of Commercial Real Estate behind on the mortgage has been steadily increasing since February 2009. It has jumped from an overall 1.67% in that month to 6.72% in February 2010.
Factors such as these have far-reaching effects, and even prestigious establishments are not immune. The Ritz-Carlon Lake Las Vegas, a AAA Five Diamond Hotel, was forced to close its doors May 2 of this year.
Ritz-Carlton spokeswoman Vivian Deuschl released a statement saying, “Our owners decided they could no longer fund the hotel. As a result of that, we can no longer operate the hotel without adequate funding.” It is the first Ritz-Carlton establishment to ever shut down.
There are signs in the travel, tourism, and real estate sectors that our economy is slowly turning its way around. Figures such as these simply illustrate we are not out of the woods just yet, but certainly attempting to climb our way back up.
Clay Lee - Realtor
Century 21 Beal, Inc.
(979) 255-1839
Timeless Service, Quality, and Experience Guaranteed
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