Report: Crisis Lies Ahead for Commercial RE

The recently published report “For Rent: The Ongoing Perils of Commercial Real Estate,” compiled by leading turnaround management firm Anderson Bauman Tourtellot Vos, indicates that the commercial real estate industry must now come to terms with the challenges of the struggling financial market. The report is based on research conducted by Anderson over the past three months.

According to government and industry professionals polled for the report, over $1 trillion of commercial real estate loans will be due in the next few years. With the devaluation of many commercial properties over the last two years, refinancing will be incredibly challenging for properties that may not meet the refinancing requirements sufficient to pay off existing debt because they are now worth less than their loan balances. Some industry experts told Anderson that they estimate commercial real estate values to have fallen by as much as 25 percent across the board. Despite the fact that most experts who contributed to the report agree that until the overall economy rebounds there will be no meaningful recovery in the commercial real estate industry, there are other opportunities for real estate professionals to explore, such as proactively managing troubled asset portfolios, creatively refinancing loans, and acquiring assets that cannot be conserved by owners.