More business mortgages for distressed property imminent?

26 November 2009

Written by David Whittaker

Higher commercial mortgage take-up for distressed property could be a feature of the business bricks and mortar market in the coming months.

Dan Fasulo, managing director at global research and consulting firm Real Capital Analytics, said that distressed properties are set to become a more central part of the commercial market during the next year.

"When the window does open for distressed property, it is going to open and close very quickly because of the amount of capital that is on the sidelines ready to come back into the market," he explained.

Up until now, there has not been a lot of trading of properties of this type because it takes between six to 12 months for firms to go through the administration and foreclosure process, he added, alluding to the fact it is just over a year since Lehman Brothers "went down".

Earlier this week, the Royal Institution of Chartered Surveyors reported that more than 80 per cent of surveyed countries saw a quarter-on-quarter increase in distressed sales within the commercial property market during the third quarter of 2009.

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