Billions In Commercial Mortgages From 2007 Lending Boom To Mature This Year
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There are billions in commercial mortgages set to mature this year that were left over from the 2007 lending boom.
The $90B in debt will expose some weakness in the commercial property market as these loans mature, making it harder for landlords to pay off old loans by taking out new debt, Bloomberg reports. Lenders today are more strict than they were in 2007 and experts forecast higher delinquency rates over the course of 2017, expecting the delinquency rate for commercial mortgages marketed as bonds to rise at least 2.4%.
Though the property market is booming, there are a greater deal of loans backed by commercial properties that are in trouble than most people are aware of, New York finance firm R3 Funding founder Ray Potter told Bloomberg. "We’re not going to see a huge crash, but there will be more losses than people are expecting," he added. [Bloomberg]