According to an article in the Star-Telegram, an increasing number of commercial property loans may face foreclosure in the next few months, as interest-only loans that were issued in the past several years reset.
The article said:
"There's a massive amount of these loans ready to hit market," said Ben Loughry, managing partner of Integra Realty Resources in Fort Worth and Dallas. "The commercial real estate bubble is continuing to grow."
Even if commercial real estate investors attempt to sell their properties facing foreclosure , it may be difficult because commercial real estate sales are depressed by 90 percent nationwide and 70 percent in the Dallas-Fort Worth area. Commercial real estate is being hit by a combination of risky loans, high vacancy rates, overbuilding and a tightening credit market. The contracting credit market is probably one of the most powerful forces pushing this coming foreclosure wave. As these interest-only loans reset, many borrowers will seek refinancing; but many lenders are holding back so many will fail to secure the financing they need.