Monday, April 06, 2009

Commercial foreclosures up 14% so far in '09

The number of Dallas-Fort Worth commercial properties facing foreclosure rose 14 percent in the first four months of 2009 compared with the same period last year.

The volume of commercial real estate loan defaults is still relatively low, but analysts are anticipating a big increase this year.

So far in 2009, 658 commercial properties have been posted for foreclosure in the D-FW area, Addison-based Foreclosure Listing Service said Thursday. Even though the number is low, it was the highest for the D-FW area in 17 years.

The 658 filings represent only about 3 percent of the total real estate foreclosure filings. The rest are for homes.

Most of the commercial properties faced with forced sale by lenders are raw land and apartments, Foreclosure Listing Service found.

Commercial property foreclosure filings were up 27 percent for all of last year.

George Roddy, president of the firm that tracks foreclosures in more than a dozen Texas counties, said he thinks this is just the start.

"Everybody I talk to is expecting a lot worse, and I am too," Roddy said. "Although, when you compare it to 1988 or 1989 [during the last major real estate downturn], this is minimal."

The greatest increase in commercial foreclosure filings this year were in Collin and Denton counties, where postings more than doubled from a year ago.

There also has been a big change in the type of commercial buildings falling into foreclosure during this cycle.

"In the late 1980s, I saw a significant amount of signature Class A properties posted for foreclosure," Roddy said. Most of the recent commercial foreclosures were for older and smaller buildings, he said.

Recent national reports show that mortgage delinquencies for commercial buildings such as hotels, offices, warehouses and shopping centers are four times higher than they were a year ago.

Many commercial building owners have been unable to get new financing for their properties because of the credit crunch. More than $200 billion in commercial property loans are scheduled to come due during the next few years.

"We are not into this thing very far," Roddy said. "It's going to get real dicey."

The Dallas Morning News