Real Capital Analytics reports that 58% of distressed properties that were reported on banks’ books has been sold or otherwise mitigated and the introduction of new distressed properties into the market continue to decrease. Bargain hunters hoping to pick up deals among distressed assets should move quickly.
“At this point, it’s fair to say that we are moving into the later innings of the distressed cycle,” says Dan Fasulo, managing director at According to global commercial real estate data and trends provider Real Capital Analytics.
Of the $394 billion of mortgages that became troubled since the 2007 market peak, 58 percent have now been resolved and $165 billion worth remains to be worked out, according to RCA. In addition, new instances of distress fell substantially in fourth quarter to $4 billion, which is the lowest level this cycle.
“It still might be a bad situation if you are an owner and your equity is wiped out, but that doesn’t necessarily mean there is going to be a fire sale on the street for all of these assets,” says Fasulo.