Last updated: July 31, 2009 01:54pm
By Paul Bubny
NEW YORK CITY-While waiting for the pool of distressed assets to deepen, most buyers have just dipped their toes in the water in “one-off deals,” says Ernst & Young in a study released this week. “We haven’t seen many portfolio transactions so far,” Chris Seyfarth, the study’s author, tells GlobeSt.com. “Given the size and the magnitude of the problem with banks, I think the expectation is that at some point we’ll start seeing sizable portfolio transactions.”The study found that 53% of respondents to an E&Y survey have purchased distressed or nonperforming loans in the last 18 months. However, 45% of those who have not yet pulled the trigger believe it’s too early in the game to even attempt to purchase nonperforming loans at the moment.
One reason is the slow rate at which distressed assets are coming onto the market. Distressed situations are “piling up faster than they’re being resolved,” says Seyfarth, E&Y’s San Francisco-based national director of nonperforming loans. He adds, “The broad view is that commercial real estate assets are getting worse, not better, and that’s going to impact financial institutions. The issue is that the price expectations are different between the two players, and in some cases significantly different.”
Barbara Lloyd specializes in commercial real estate assisting property owners in strategizing for property acquisition and disposition. Barbara has been in the commercial real estate industry since 1997 and her position with NAI Horizon provides clients with a full array of services and resources.
This page is intended to provide relevant information regarding today’s commercial real estate market. Please contact me at barbara.lloyd@naihorizon.com with any comments or questions. I hope you find this information helpful!
