It has been classified for commercial use and within walking distance of boat slips, restaurants, upscale condominiums and shops. However, the pier defied redevelopment efforts despite the significant changes around the harbor front.

Industry experts said that the pier is the last dormant area of the redeveloped coastline in Baltimore. The plight of this waterfront property mirrored the deteriorating condition in the commercial real estate market in Maryland and across the country.

The number of commercial foreclosures is rising at an alarming rate and speed. Industry experts attributed the increase to the worsening financial crisis and massive job loss.

Experts said that the Baltimore pier is a fabulous, prime property that will be an asset to whoever could figure out how to generate revenue from it. The pier, made of concrete and asphalt, is over 50 years old. It measures 124-foot in width and 237-foot in length. The pier was once a docking place for oyster boats.

The foreclosure auction is made on behalf of Alvin Pomerantz Revocable Trust. The Baltimore pier was purchased by three investors in 2006 but never made any development on it. According to court records, the owners are JAB Ventures LLC, Alan Piscatelli and 2361-73 Boston Street LLC.

Industry experts said that the pier is at the center of the Canton Waterfront. However, the development on the area did not materialize because there is no access to vehicles. This is the reason why city officials did not allow construction on the area.

The property was part of a townhouse community developed 30 years ago. One of the developers Louis Grasmick said that the original plan was to use the property to provide amenities for residents, such as a tennis court, garden or swimming pool. But he failed to get any permit to construct from the city because of lack of vehicle access.

The auctioneer at the commercial foreclosures sale has been asking for a deposit of $20,000 for the property. Industry experts think that the property has a potential as recreational fishing pier or miniature golf course.

According to industry experts, the recession, foreclosures and unemployment have greatly impacted the spending patterns of consumers. They said that most businesses in the area are counting on discretionary spending as many consumers are pessimistic by nature.

Some industry analysts said that the current economic state is planned, adding that the system is a set up. They pointed out that the federal government should not give companies free capital because they are self-regulated. They added that the federal government has failed to properly manage the U. S. Securities and Exchange Commission.

Last July, Tippecanoe County posted an unemployment rate of 5 percent. The unemployment rose by one point and remained the same until January of this year when the jobless rate increased to 8.1 percent.

Market data released by the Indiana Department of Workforce Development indicated that Tippecanoe County’s jobless rate last July was 10.3 percent. What is happening in Tippecanoe County and Lafayette is mirrored in other counties and cities across the country.

The number of bank foreclosure houses across the country continues to increase as the unemployment rate rose to double digits. And now, commercial properties are joining the foreclosure fray.

In Lafayette, employees of major manufacturing companies are feeling the brunt of the recession and so do their employers who are facing challenges including decline in orders and increasing prices for materials.

Wabash National Corp. President and Chief Executive Officer Dick Giromini said that the economic environment remains depressed. He said that Wabash, a truck-trailer manufacturer, lost about $18 million in the last quarter. And since 2006, the company has eliminated about 250 salaried positions and 800 production associates.

Similarly, Caterpillar Inc. has laid off about 985 employees at the company’s Large Engine Center in Lafayette.

Industry experts noted that the number of foreclosed homes in Tippecanoe County moutnumbered single-family home construction activities last year. They said that the county is not yet done with bank foreclosure houses and more are expected in the offing.

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These homebuyers typically spent an average of 16 weeks browsing the Internet at the comfort of their office or homes before finally deciding on prospective properties to buy. Gone are the days when potential homebuyers spend several weeks riding around a real estate agent’s sports utility vehicle to see several potential properties to buy.

According to market data, 84 percent of homebuyers are using the Internet for property hunting. These prospective homebuyers took it upon themselves to gather pertinent information formerly done by real estate agents who get a 6 percent commission from the sales price.

With just a few clicks of their fingertips, homebuyers can access Web sites that could allow them to browse foreclosure properties for sale, find out about a property’s transaction history, compare area values and tax background. They could also see aerial photographs of the properties for sale.

The convenience brought about by Internet searches has raised speculations on the future of about 519,000 agents and brokers in California and opened a debate about their exorbitant commissions.

Some online brokerage companies who are trying to compete in the market have decided to restructure the pay structure of agents to boost their business. Some are trying to simplify online home buying by making it cheaper to purchase and sell.

Some Web sites that offer foreclosure homes for sale contain blogs which interested buyers try to follow. According to industry experts, the Internet has helped reduced homebuyers’ dependence on agents. But they noted that many homebuyers who used Internet searches to locate properties that suit their requirements took a lot longer to make a buying decision.

Experts speculate that homebuyers who used Internet searches took a long time to make a buying decision because of the huge volume of foreclosure properties that they could access. Furthermore, Web sites update their listings of foreclosed houses for sale daily, making potential buyers delay making a decision in the event that a much better property will be available tomorrow.

According to experts, eight commercial properties, with total value assessed at around $10 million, were posted on foreclosure listings for sale in an auction next month. They noted a significant increase in the volume of foreclosure postings on commercial properties appraised at $10 million and above in the period of three months from June.

They said that the quality of properties being put into foreclosure is getting better and more expensive. Market data showed that postings for commercial property foreclosure in August totaled 271, representing an 83 percent rise compared with 148 buildings posted on foreclosure listings in the same period last year.

A statistical report also noted that from January to July this year, about 1,245 notices of foreclosures were filed on commercial properties in the counties of Collin, Dallas, Denton and Tarrant. The filings, which included undeveloped land, represented a 12 percent rise from the nearly 1,116 notices of foreclosures served in the first seven months the previous year.

Meanwhile, Cawley Partners Chief Executive Officer Bill Cawley said that he expects more upscale commercial property foreclosures to happen soon as the economic downturn and financial crisis continue to batter the country, in addition to more refinancing failures.

He said that many owners of high-valued commercial properties are starting to experience the market problems, adding that if lenders are not willing to work out debt solutions with them, they have no option to save their properties from foreclosures.

Meanwhile, some industry experts said that they expect the number of high-end commercial property foreclosures to continue to increase for the remaining months of this year until the whole of 2010. They said that one of the biggest problems facing landlords are maturity defaults due to difficulty in refinancing their commercial mortgage.

On the other hand, some foreclosures occur when commercial loans convert to interest and outstanding principal from interest only, which is very similar to teaser rates in the residential real estate.

They believe that the only way to prevent a surge of upscale commercial properties on foreclosure listings is a government intervention to help lenders clear their books of non-performing and non-profitable real estate properties.

Barofsky said that the Treasury Department has failed to allocate TARP funds with the level of transparency and accountability satisfactory to the public.

Critics of how TARP was implemented also said that the U.S. Treasury and Federal Reserve granted trillions in taxpayer money to big banks and corporations without reporting details to the public.

New York Democrat Edolphus Towns, chairman of the House Committee on Oversight and Government Reform, called on the Treasury to put more detailed information on its official web site. Towns even warned that Secretary Geithner can be called upon by the House committee to explain if he does not provide details on how TARP was spent. Lawmakers also want to know how the disbursements helped facilitate the federal program to address foreclosed properties.

When Federal Reserve Chairman Ben Bernanke spoke before a House Committee recently, Florida Republican Representative Bill Posey remarked that Americans have the right to know 100 percent of how the TARP funds were being spent.

Bernanke reported that all the actions carried out by the Federal Reserve in the past several months helped prevent the total collapse of the American and global financial systems. He said the economic problems faced by the U.S. in September and in October last year were the worst combination of problems since the recession in the 1930s.

Bernanke said the Fed granted a total of $1.5 trillion in short-term emergency loans in 2008 to the country’s largest banks and other financial corporations to prevent the financial sector’s total collapse. But he emphasized that the current level of loans to the big banks has now gone down to $600 billion.

Bernanke also acknowledged that problems remain because of the rising unemployment rate and the continued rise in foreclosed properties.

He also admitted that credit remains tight and this has led to a rising number of foreclosed properties in the commercial real estate sector.

Additionally, Barofsky said his office examined 360 banks to check how they spent their TARP allocation and found out that most of them used the money to pay debts and buy other banks instead of opening up lending to troubled business owners and homeowners to help contain the effects of foreclosed properties.

During the first wave of the foreclosure crisis, only houses formerly owned by low-income borrowers were being foreclosed. Now, high-priced homes and non-residential buildings could not be prevented by owners from being added to foreclosure lists.

Among the condos and commercial properties being added to foreclosure lists are South Florida’s Inverrary Plaza; the Ponce de Leon Condo in South Florida’s Coral Gables; the Richardson Heights shopping mall in Dallas; the Sion Estates in Miami-Dade; and the Key International Development projects in Miami.

Bank of America, trustee of mortgage-backed securities handled by Bear Stearns, has lodged in Broward County a foreclosure case against developer Post Time Properties II, which acquired a CMBS loan after purchasing the Inverrary rtail plaza in 2005. Post Time Properties has been in default by over 3 months on its $8.6 million balance.

Similarly, Wachovia Bank has lodged in Miami-Dade a foreclosure case against Shear Construction and Development, which developed the Ponce de Leon condo complex, and other Shear partners. The condo, which has 50 residential units, 9 office units and 11 commercial units, still owes the bank $13.1 million. Wachovia intends to acquire the unsold units, as there were only 26 units sold in 2008.

Shear Construction is facing two other foreclosure lawsuits in connection with unpaid loans for its commercial and residential development projects. It obtained $4.6 million from Pacific National Bank for its River Marina LC project and obtained $2 million from Pacific National Bank for its Flamingo Ranch Estates in Davie. This housing development featured 13 home sites, but only sold 7 sites because of the effects of forclosure lists.

Meanwhile, the Richardson Heights shopping mall in Dallas, which has been operating for 50 years has been added to foreclosure lists after the owner, a Shafer Property affiliate, failed to pay over $32 million in mortgage debts.

According to executives at Foreclosure Listing Service, a bigger number of older commercial properties have been added to foreclosure lists during the past years because they could not compete with newer commercial complexes. Aside from competition, operators have also been unable to obtain credit to continue their operations.

Another housing development that faces the risk of being added to foreclosure lists is Sion Estates, a master-planned community in Miami-Dade. Sion Estates LLC was provided with a $3.9 mortgage loan by Premier American Bank, which it was not able to pay after the project stalled.

Owners facing a commercial property foreclosure have several options available.

- Payment re-structuring: owners can ask their lenders to change payment terms. This could result to lower payments for longer loan terms or lower payments but with higher interest rates. They could also opt to take out a new loan with an entirely new set or terms and conditions to finance existing mortgage debt.
- Deed in lieu of Foreclosure: in exchange for not completing foreclosure proceedings, owners could voluntarily offer the property to the creditor. In some states, the owners will be given a chance to redeem the commercial property within a specified period of time.
- Selling the property: the same with residential properties, owners can sell the property to regain whatever equity they might have. A professional real estate broker like Foreclosure Deals can help look for potential buyers and facilitate all transactions.
- Filing for Bankruptcy: as a last resort, owners can file for a Chapter 7, Chapter 11 or a Chapter 13. Bankruptcy courts usually investigate the financial status to determine if the filing is valid or acceptable. This option can stop foreclosure proceedings temporarily and owners can work out a way to re-pay the creditors.

Owners facing foreclosure should know that options are available to cure mortgage default. A lawyer specializing in commercial property foreclosures can also be hired to handle transactions if the commercial property is owned by a partnership or corporation.