Commercial Real Estate Lenders Facing Mixed Future

Despite growing losses on their commercial real estate investments and against conventional investing wisdom, stock shares of banks heavily invested in commercial real estate have been rallying recently. While many investors remain justifiably wary of investing in such banks, others are betting that the predictable hits from commercial real estate losses will not be as severe as expected. Goldman Sachs is estimating that around 7 percent of commercial real estate mortgages will go into default at some point. However, as of April 2010, banks that have issued large commercial real estate loans are reporting that only 2.5 percent have gone in to default. The unexpectedly low rate of bad commercial real estate loans leads some investors to believe that although more losses are expected in the near future, the losses will be spread out over time as will their impact on balance sheets. Other investors remain wary, citing low commercial real estate default rates in a reeling commercial market as evidence that these losses are being artificially lowered. There is precedent for this as it is not uncommon for the lender to restructure commercial mortgages in the hope that restructuring will help keep the debtor from defaulting on the loan. Despite the current volatility in most commercial real estate markets across the country, bank stocks have recovered to the point that some appear to be fully valued. Nevertheless, many industry analysts predict that commercial real estate mortgage defaults will worsen in the coming year, and if that occurs, banks heavily invested in commercial real estate could quickly lose favor with investors. If you’re thinking about buying Louisville commercial real estate as an investment or to expand your business, no one in the Louisville area has a better selection or offers better service than Louisville Properties. If you’re selling Louisville commercial real estate, Louisville Properties can help you as well. The realty agency offers a wide range of options for sellers. For more information about commercial or residential real estate in Louisville, call Louisville Properties today at 502.744.9504. Resource link:

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James Powell

Jim Powell has over 20 years of experience buying and selling luxury real estate in Louisville, KY and Managing over hundreds or rental properties across the city.
Jim Powell (License #191501)

Lauren Ghanavatian

Lauren Ghanavatian attended Assumption High School and the University of Louisville. Growing up in Louisville gave her a sense of the unique and diverse communities this city has to offer.

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Louisville Properties is a full service Louisville Real Estate Company for buyers and sellers of real estate. We offer the following services
3418 Frankfort Ave #100 Louisville, KY 40207 Louisville, KY 40207
United States
Phone: 1-502-744-9504

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