Banks continue to see an increase in delinquencies on commercial real estate (CRE) loans as interest rates continue to rise and work-from-home policies create empty workspaces. As demand for office space decreases, borrowers have begun to default on their loans, forcing banks and lenders to sell their loans at significantly lower rates or engage in other potentially costly and time-consuming workouts. In reports for the third quarter of 2023, many banks show significant losses, largely due to CRE loans. Morgan Stanley reported setting aside $134 million for credit losses, stating that this was primarily due to “deteriorating conditions in the commercial real estate sector,” according to an article from Yahoo!, Other institutions, like Bank of America, have reported that their loans increased as well. Bank of America’s nonperforming loans increased to nearly $5 billion in the third quarter from $4.27 billion in the second quarter. They attributed this increase to…
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Investing in commercial real estate has always been a high-stakes decision where all aspects should be considered. In recent years, the industry has proven to be an even more crucial part of business decisions, especially as it relates to office space. This growing stress can be attributed to increased interest rates, popularity of working from home, and banking stress, according to an analysis by Moody’s Investor Service. The increased number of employees who prefer to work from home has inherently and exponentially raised the risk for office-based real estate loans. A commercial workplace might not be worth the investment simply due to the number of people willing to utilize the space. This, paired with an overall increase in interest rates across the country, leads to uncertainty in investing in property. These factors affect more of the population than most would expect; Moody’s reported that office real estate loans represent $736…
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There are many reasons why a landlord-tenant relationship can turn sour. Typically, the result is the landlord suing the tenant for unpaid rent or some other breach of the lease agreement. However, often times the tables will turn and the landlord will find themselves being sued by a tenant for a landlord breach. When a landlord finds themselves in this situation, it is important for the landlord to take certain steps to ensure that its interests are protected: (1). CONTACT YOUR ATTORNEY: First and foremost, it is important to contact a knowledgeable landlord-tenant attorney in your area to ensure that all pleading deadlines and initial hearing requirements are met so you do not find yourself in a default situation and an automatic loss in court. It may be tempting to believe that you can represent yourself in court, however, this may not be possible under state law. As most commercial…
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