Retail Distress Unanchored Strips
Retail Distress Highest Among Unanchored Strips, Bubble Markets
Source: nreionline.com
"Distress is rampant in the retail sector, which leads all property sectors with $32 billion in distressed assets, according to New York-based Real Capital Analytics. But not all retail is created equal. A look inside the numbers reveals that unanchored strip centers, retail in regions plagued by high unemployment and deep housing busts, as well as loans originated in 2006 and 2007, are disproportionately more susceptible to distress.
For example, $9.4 billion in retail commercial mortgage-backed securities (CMBS) loans are delinquent, in foreclosure or already taken back by banks, accounting for about 29% of the $32.6 billion of total delinquencies across all property types, according to Horsham, Pa.-based RealPoint LLC.
Markets where the economic crisis has cut sharpest — where housing prices have dropped precipitously and where unemployment is above the national average — have experienced higher levels of delinquencies and distress among retail properties, according to Suzanne Mulvee, real estate strategist with Boston-based Property & Portfolio Research."