Doron F. Eghbali Commercial Law Blog on Lawyers.com

Commercial Real Estate Woes Still Continiuing

Monday, January 25, 2010 by Doron F. Eghbali

Bank regulators cite commercial real estate debacle as the breeding ground for the next wave of bank failures, as builders default on loans and building valuations tumble. Unfortunately, the signs are not promising.

In fact, about $566 billion in commercial real estate debt, the majority of which was provided by banks, comes due in 2010 or 2011, based on Foresight Analytics, an Oakland California company.

Needless to say, commercial builders would be the biggest headache for banks as they are the largest capital drains and in most instances demand for space and rents are falling below projections.     

Typically, builders first secure financing and then commit themselves to a project. Nonetheless, cost overruns or starting a project before all the loan papers were in place could be to blame for this debacle.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. He Could be Reached at 310-651-3065 or DoronEghbali@LawAdvocateGroup.com. For More Information, Please, Visit: www.LawAdvocateGroup.com.

Posted at 10:27 AM
Topic: Commercial Law
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