{"id":1004018159,"date":"2010-03-04T12:10:44","date_gmt":"2010-03-04T20:10:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004018159"},"modified":"2022-12-07T14:59:02","modified_gmt":"2022-12-07T22:59:02","slug":"deloitte-hope-for-market-but-maturities-loom","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/deloitte-hope-for-market-but-maturities-loom\/","title":{"rendered":"Deloitte: Hope for Market, but Maturities Loom"},"content":{"rendered":"

March 4, 2010
\nBy Allison Landa, News Editor<\/p>\n

\"\"<\/a>

Courtesy Flickr Creative Commons user austrini<\/p><\/div>\n

While a decent amount of indicators are looking brighter than in years or even months past, the amount of loan maturities coming up in the next several years could put a dent in that optimism.<\/p>\n

That\u2019s according to Deloitte, which held one of its dBriefs Real Estate Series on Thursday with regard to \u201cImproving Liquidity in Commercial Real Estate Markets: Will Capital Markets Show You the Money in 2010?\u201d<\/p>\n

The answer, not surprisingly, is mixed.<\/p>\n

According to Deloitte\u2019s data, $552 billion in upcoming commercial mortgage loans will come due in 2010. From there the numbers rise \u2013 in 2011, $560 billion will come due. In 2012 that figure drops slightly to $537 billion. In terms of leveraged loans, $71 billion will come due this year, while $113 billion will come due the following year. In 2012, $203 billion comes due \u2013 making this category one to watch as the projected numbers keep rising. <\/p>\n

\u201cBecause of pretend and extend, a lot of … loans got pushed out,\u201d managing director of Deloitte financial advisory services Constantine Korologos said during the presentation. \u201cWhile commercial mortgage-backed securities don\u2019t necessarily reflect the lion\u2019s share of the loans that are maturing, there are a lot of CMBS maturities approaching over the next five years.\u201d<\/p>\n

In terms of CMBS maturities, Deloitte finds that the greatest amount of upcoming maturities are loans originated in 2007 and are coming due in 2012. <\/p>\n

\u201cWe know that over the last three years of active lending \u2013 2005, 2006, and 2007 \u2013 that\u2019s where a lot of the more aggressive loans and valuations occurred,\u201d Korologos said. \u201cGoing forward, a lot of the 2007 vintage was kind of the peak of the lending market and it\u2019s coming (due) in 2012.\u201d<\/p>\n

He noted that according to an audience poll, most people expect significant recovery to begin occurring between 2012 and 2015. <\/p>\n

\u201c(2012) is the earliest when people expect solid recovery occur,\u201d he said. \u201cSo you do have some coming maturities that could present a problem.\u201d<\/p>\n

Characterizing 2007 as the year \u201cwhen the music stopped\u201d, Korologos said loan originations were significantly lower in 2009 than two years earlier. However, he said, they were significantly better in 2008, though \u201cthe bar was pretty low.\u201d<\/p>\n

Bob O\u2019Brien, who leads Deloitte\u2019s U.S. real estate practice, noted that 140 banks failed in 2009, which was the highest total since 1992.<\/p>\n

\u201cMany analysts are saying that before the real estate market can recover, banks need to work through their bad assets,\u201d he said. <\/p>\n

Korologos added that many key lenders \u2013 Bear Stearns and Washington Mutual, for example \u2013 no longer exist in their current form. \u201cAnd when you look at the amount of origination and then what percentage that represented of the total CMBS issuance in 2007,\u201d he said, \u201cthe institutions that are no longer present in their current form represented a third. This will be added stress … in 2012 and 2013.\u201d<\/p>\n

Deloitte director of real estate advisory services Scott Hileman echoed these predictions.<\/p>\n

\u201cWe know that both in CMBS and as well as the commercial banks, the delinquency rates have continued to increase,\u201d he said. \u201cIn a lot of cases it\u2019s not the large banks that have the problem, but it\u2019s the community and regional banks.\u201d<\/p>\n

Those banks, he said, hold $1 trillion worth of commercial real estate.<\/p>\n

\u201cThey have serious problems,\u201d he said. \u201cThe FDIC\u2019s list of problem banks are growing exponentially … in many cases those are going to be shut down.\u201d<\/p>\n

As the number of distressed assets begins to pile up, Hileman says he\u2019s seeing banks using more creative tactics such as switching interest rates and using cashflow mortgages in order to deal with what\u2019s on the table right now.<\/p>\n

However, the presentation was not all doom and gloom. In a section humorously referred to as \u201coptimism and possibilities\u201d, Korologos noted that the credit market is beginning to thaw.<\/p>\n

\u201cThe market is starting to lend again,\u201d he said. \u201cAnd that\u2019s a good thing because the liquidity that disappeared from the market is going to be the only thing that will facilitate transactions.\u201d<\/p>\n

With Freddie Mac and Fannie Mae still active lenders, they are providing liquidity for the multifamily market and, Korologos says, commercial banks are beginning to wade back in.<\/p>\n

\u201cThe lenders are stepping into the market … and we have new lenders who are stepping into the market who are looking to actively participate and lend,\u201d he said. \u201cThese are all good things and it\u2019s a story that we were not able to tell the same way five or six months ago.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

While a decent amount of indicators are looking brighter than in years or even months past, the amount of loan maturities coming up in the next several years could put a dent in that optimism.<\/p>\n","protected":false},"author":936,"featured_media":1004018161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,21742],"tags":[],"class_list":["post-1004018159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-latest"],"acf":[],"yoast_head":"\nDeloitte: Hope for Market, but Maturities Loom - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/deloitte-hope-for-market-but-maturities-loom\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deloitte: Hope for Market, but Maturities Loom\" \/>\n<meta property=\"og:description\" content=\"While a decent amount of indicators are looking brighter than in years or even months past, the amount of loan maturities coming up in the next several years could put a dent in that optimism.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/deloitte-hope-for-market-but-maturities-loom\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2010-03-04T20:10:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-07T22:59:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2010\/03\/Bank-two1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"500\" \/>\n\t<meta property=\"og:image:height\" content=\"362\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Allison Landa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/\"},\"author\":{\"name\":\"Allison Landa\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/0eb45390ae3124c14a919b7ec7bd2249\"},\"headline\":\"Deloitte: Hope for Market, but Maturities Loom\",\"datePublished\":\"2010-03-04T20:10:44+00:00\",\"dateModified\":\"2022-12-07T22:59:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/\"},\"wordCount\":760,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2010\\\/03\\\/Bank-two1.jpg\",\"articleSection\":[\"Finance\",\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-hope-for-market-but-maturities-loom\\\/\",\"name\":\"Deloitte: Hope for Market, but Maturities Loom - 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