<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} h1 {mso-style-unhide:no; mso-style-qformat:yes; mso-style-link:”Heading 1 Char”; mso-style-next:Normal; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; page-break-after:avoid; mso-outline-level:1; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-font-kerning:0pt;} p.MsoBodyText, li.MsoBodyText, div.MsoBodyText {mso-style-noshow:yes; mso-style-unhide:no; mso-style-link:”Body Text Char”; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} span.Heading1Char {mso-style-name:”Heading 1 Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Heading 1″; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana; font-weight:bold;} span.BodyTextChar {mso-style-name:”Body Text Char”; mso-style-noshow:yes; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Body Text”; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> The Mortgage Bankers Association (MBA) sees trouble ahead. With high delinquency rates in multi-family and commercial mortgage markets, the opportunity for short sales and foreclosure acquisitions is strong.
30-day delinquencies rose 5.38 percent last year. Fannie Mae insured multi-family delinquencies rose an astounding 67 percent over last year. 90-day delinquencies have increased 100 percent in one year. Banks are nervous about absorbing the losses but time is running out for the lenders.
The MBA sees no turnaround in sight until the Obama Administration does something about the unemployment rate. At the core of the delinquency problem is consumer confidence. Washington has made promises, indicated that jobs will be created with stimulus funding but the public just is not seeing or feeling any change.
Unemployment remains at 9.7 percent and higher in metropolitan areas. Some economists suggest real unemployment is in the 20 percent range. They just may be right.
High unemployment is hurting the commercial real estate market in many ways. As companies consolidate operations and operate at low employment levels, they simply do not require the space to which they were accustomed. Yet, these same scenarios give cause for hope for short sale purchasers.
Commercial short sales are unlike residential short sales. The emphasis in successful commercial short sales is for the investor to arrive at new exit strategies that will appeal to new lenders and new tenants.
For example, as companies pare down their workforces, savvy investors are contacting companies that are scaling back and positioning themselves to accommodate the changing commercial environment. Solving the exit strategy is often the key to any short sale but commercial opportunities have far more options than residential properties. Investors must be creative and develop new occupancy rates, find new tenants and understand the zoning board procedures for the community.
Commercial short sellers are more sophisticated than residential owners. There is less emotion and a more willing seller on the other end. Get your strategy in place, because 2010 is the time to capitalize on the down commercial market.
