More than 2,000 commercial properties in Maricopa County, Arizona have received 90-day foreclosure notices since the beginning of the year. In total, that represents $6.3 billion in real-estate loans.
That foreclosure number is horrific. Arizona was one of the canaries in the coal mine of the housing bubble. If it’s playing that role for commercial real estate, we’re in for a lot of pain.
Over the past decade the foreclosure rate has stayed around zero. Now foreclosures have skyrocketed, and local real estate brokers say they are still building momentum.
Commercial-mortgage lenders are reportedly not modifying commercial-real-estate loans. But the owners have found that their commercial-lease rates have fallen by as much as 75 per cent in some areas. But even owner-occupied commercial spaces are defaulting, largely because of a drop off in business.
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