From what I understood, in 2005 a lot of loans that were issued had a 10 year period, for the properties not performing, is it possible there will be another wave of distressed sales? What are your thoughts, thanks
There are some coming but it's not what you think. Markets are recovering so it will not be mass hysteria.
From about 2013 to 2018 there are about 1 trillion loans in commercial that are resetting. We have been watching for years to see the extent of the losses for potential buys.
Some will have to sell and others will have to restructure loans with capital buy in partners. A ton depends on where the commercial loan originated as to what can be done as a workout. That is one key piece of information that many investors do not understand. Each property is case by case basis on workout options.
Size of the loan, whether the loan is held by the same bank that generated it or has been sold off, is it part of an FDIC loss share agreement, is it a CMBS security, etc.??
All of these things and more play into what can be done with it. There has already been hundreds of billions of loans due already and being worked out or sold off. The trillions are a cumulative workout of all the years in different times coming due.
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