Commercial Property Distress to Rise Amid Wave of Maturing Debt.

Commercial Property Distress to Rise Amid Wave of Maturing Debt. Even if government programs aimed at restarting the securitization market (CMBS) are successful and constraints on debt capital ease (not likely until the banks get pushed by the regulators), the combination of deteriorating property fundamentals, declining values and tighter underwriting will make it impossible for many owners to refinance maturing loans without considerable equity contributions. During the first quarter of 2009, the distressed component of the marketplace increased by more than 50 percent, and with nearly $400 billion in commercial mortgage debt due to mature at the end of 2009 and 2010, distress will rise further. We see this distressed debt causing owners to sell at depressed prices or banks foreclosing and then selling at heavily discounted prices. Either way we will see many great buying opportunities at the end of 2009 and into 2010.