U.S. Commercial Real Estate Behind on the Mortgage

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U.S. Commercial Real Estate Behind on the Mortgage

The average Brazos Valley resident 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: Multi-family (condos, large apartment complexes – of which we have many for the TAMU college students in town); 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















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.  This is a potential worry to our BCS community, in that we have mass amounts of multi-family and lodging units.  Most of the apartment complexes in town were built during a boom, and currently, none are at capacity.  The lodging establishments in town, while generally very busy during football and graduation seasons, notice a distinct lack of hotel guests for the remainder of the year.

Factors such as these also 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 yeRitz-Carlton-Lake-Las-Vegasar. 

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     claylee

Century 21 Beal, Inc.

(979) 255-1839


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