Home »
Blog » Foreclosures » Commercial Foreclosures » Texas Upscale Properties on Foreclosure Listings Increasing
Texas Upscale Properties on Foreclosure Listings Increasing
July 28th, 2009 by 
Joseph Smith
The overflow of the foreclosure problem from the residential real estate market to the commercial real estate in North Texas has worried industry experts who are expecting a surge of upscale properties on foreclosure listings in the coming months.
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.
