Commercial Real Estate Foreclosures Soaring in Dallas-Fort Worth

Posted on 04. May, 2010 by admin in Blog, Commercial

By STEVE BROWN / The Dallas Morning News – Friday, April 23, 2010
stevebrown@dallasnews.com

Commercial foreclosure filings have soared by more than 60 percent so far this year in North Texas.

And real estate analysts expect that there are many more commercial property defaults to come, fueled by the recession and changes in the lending market.

Through the first five months of 2010, almost 1,400 commercial property foreclosure filings have been made in the Dallas-Fort Worth area, Addison-based Foreclosure Listing Service said Thursday. That compares with fewer than 900 commercial foreclosure postings in the same period last year.

“In the overall Dallas-Fort Worth metro area, foreclosure posting activity has increased over the past year in all but two of the commercial property types,” Foreclosure Listing Service president George Roddy said in the report.

Foreclosure filings for apartment buildings are up 44 percent this year, and postings for offices have risen 21 percent from a year ago.

There have been modest declines in foreclosure filings for shopping centers and industrial buildings.

“Although I am seeing a few Class A properties posted, the vast majority of the commercial properties posted for foreclosure in today’s market are either [older] Class C properties or miscellaneous commercial buildings,” Roddy said.

The biggest increase in commercial foreclosures has been in Tarrant County, where they have more than doubled from this time last year. Dallas County had the smallest annual gain – 40 percent.

Many foreclosures have been prompted by tougher lending standards, which make it impossible for the borrower to refinance or maintain debt.

While commercial foreclosure filings have shot higher during the last couple of years, they remain a fraction of what they were in the last big real estate crash during the late 1980s and early 1990s. But other reports suggest that the increase in troubled commercial property deals is far from over.

The D-FW area has more than $2.8 billion in commercial properties that are either behind on loan payments or likely to default, according to the latest estimate by Trepp LLC, a leading provider of commercial real estate data and analytics.

Trepp’s watch list of D-FW commercial properties includes downtown properties One Main Place, at 717 N. Harwood St., and the Davis Building, at 1309 Main St.

Suburban properties on the list include the Four Seasons Resort and Club Dallas at Las Colinas, the Village on the Parkway shopping center in Addison and Le Meridien Dallas North in Far North Dallas.

More than 200 North Texas commercial properties are being scrutinized by Trepp.

Tags: Commercial, Dallas, DFW, Foreclosures, Real Estate