According to the Boston Business Journal commercial real estate in Boston has been far from stellar. As a matter-of-fact the commercial real estate dollar volume sales for the 1st half of the year was down by 46% from the same period and a whopping 92% off from the the first six months of 2007.
In the first six months of 2007 to number of commercial properties sold was 235 for the total sum of $11.2 billion. This year the results fro the same time period were 22 properties sold for $870 million.
Boston's estimated commercial property values have fallen anywhere from 25 % to 40% according to the BBJ>
Now if this isn't bad enough, and on a national level, according to Bloomberg one-fifth of all CMBS loands are on the watch list. In total 12,853 loans with a balance of $ 158.6 billion are on the watch list. The reason they are in watch the list: debt-service coverage levels.
" Loans originated in 2006 and 2007 account for an overwhelming share- 65% of the volume on the various watrch lists.During those years lenders underwrote mortgages based on "projected property cashh flows" as opposed to the actual cash flows. Most of the projected numbers have failed to materialize.
None of this bodes well for the entire real estate market.
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