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February 12, 2024

Pace Of Distress Slows As Banks Try To Work Out What Lies Beneath

From New York to Tokyo to Munich, banks last week reported bigger-than-expected losses related to distressed U.S. commercial property loans, raising fresh fears that the pain being felt in the country’s office market could cause systemic problems for the global financial system even as the pace of loans becoming distressed starts to slow. 

The situation leaves lenders, real estate investors, financial markets and policymakers trying to figure out whether the worst of loan distress is already behind it or if significant hidden nasties might yet rear their heads. 

Pace Of Distress Slows As Banks Try To Work Out What Lies Beneath

A recent report from MSCI laid bare the extent to which lenders are facing a sharp increase in distressed loans. The volume of such loans skyrocketed by 51% to $85.8B in 2023, according to the data provider’s U.S. Distress Tracker, a $28.9B jump.The tracker defines…

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NYC’s Waterfronts Are Getting A Makeover For The E-Commerce Age

NYC’s Waterfronts Are Getting A Makeover For The E-Commerce Age

As traffic-clogged roads slow down New Yorkers, the city government is looking to a new way to get e-commerce products to their buyers.New York City is planning six new waterfront shipping hubs to handle e-commerce deliveries, according to a Request For Proposals issued Friday…

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When Headwinds Threaten In 2024, Borrowers Can Turn To Lenders Who Have Braved The Storms Before

PRESENTED BY:   Emerald Creek Capital
 
When Headwinds Threaten In 2024, Borrowers Can Turn To Lenders Who Have Braved The Storms Before  

In 2009, while the rest of the U.S. was busy recovering from the Global Financial Crisis, childhood friends Mark Bahiri and Mark Penna saw an opportunity to build a lending firm that could learn from the mistakes of the past.  “When almost every lender was re-accessing their loan…

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To Disclose Or Not To Disclose. In States Like Texas, That Is The Question

To Disclose Or Not To Disclose. In States Like Texas, That Is The Question  

To say Bethany Babcock was unpleasantly surprised when a listing agent publicly unveiled the sale price of a client’s recent commercial property acquisition might be an understatement.

The principal and co-owner of San Antonio-based Foresite Commercial Real Estate was displeased enough to take her complaint to social media, kicking off a lively thread that saw one commenter suggest the offending discloser should be “publicly tar[red] & feather[ed], put in stockade and pelted with rotten tomatoes."

Babcock's property was in Texas, one of 12 nondisclosure states with no law requiring the release of real estate sale prices to the public or assessment officials. To Babcock and others, the move was overly self-promotional at best, and in a worst-case scenario, could be financially disastrous to the property’s owner and tenants. 

“The agents want to brag about what they sold the property for … It’s noteworthy. It’s marketing,” Babcock told Bisnow. “There's nothing wrong with that in a normal state. But when you're in a nondisclosure state, you're putting your own desire to brand yourself and market yourself above the needs of the tenants in the center that you've sold.”

At issue is the danger of informing appraisal districts that property sold for much more than its appraised value. Proponents of nondisclosure say revealing that information could lead to far higher taxes for property owners. For tenants, it could potentially double triple-net leases, in which the lessee pays rent plus property expenses, including utilities and taxes,…

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