source: NREIonline.com
According to a recent report from Oakland, Calif.-based research firm Foresight Analytics, an extremely tight credit market coupled with $814 billion in maturing loans over the next three years could prove to be a toxic mix that delays recovery and puts pressure on valuations.
A total of $296.2 billion in loans originated by banks, commercial mortgage-backed securities (CMBS) and life companies is projected to come due in 2011. Of that total, $17 billion to $40 billion each of maturities this year and next will come from 2006 and 2007 vintages. In 2011, the amount of 2006 and 2007 vintage loans maturing shoots up to $85 billion.
An example that has already hit maturity issues is Chicago-based General Growth Properties (GGP), a real estate investment trust with a stake in 200 malls across 44 states – including Pioneer Place and Clackamas Town Center. GGP currently has about $1.2 billion of past due debt and another $4.1 billion worth of debt that could be called in. It also has an additional $1.4 billion worth of consolidated mortgage debt and $595 million of unsecured bonds scheduled to mature during 2009 that remains to be refinanced, repaid or extended. As of March 10, 2009, GGP is asking holders of $2.3 billion worth of bonds to hold off on calling in payments and give the company until the end of 2009 to refinance its crushing debt as it seeks to stave off a Chapter 11 bankruptcy filing.
For the full story from National Real Estate Investor – go to http://tinyurl.com/dl2k5t
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