Commercial Real Estate: The Shoe Dropped In California

california

More proof that the commercial real estate crash is coming:  hotel foreclosures in California have more than tripled in the first nine months of this year, according to  Bloomberg.

Foreclosures in Dana Point climbed to 47 in January through September from 15 a year earlier, and properties in default more than quadrupled to 259.

Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion are in danger of default.

And, as with the housing market, it was really the late stages of the housing bubble that did so much of the damage: 70% of its troubled hotel loans originated between 2005 and 2007. Sadly, offering free tats, tequila and BMWs for stays probably won’t help.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.