Many of the thousands of commercial buildings erected on easy credit before the economic downturn remain underutilized or empty. Now those loans are coming due.
Commercial real estate loans are typically provided on terms of five to seven years. That means that in the next two years a billions of dollars worth investments in construction will need to be repaid just as the current value for those properties has plummeted.
"About $500 billion will come due in 2010 alone and an equal amount every year through at least 2012, according to the Federal Reserve. Many banks...are facing huge numbers of possible defaults by builders who erected thousands of office towers, condominiums and shopping centers with the easy credit available five years ago. With few tenants, those developments are turning into what industry insiders call zombie buildings. Next year "looks like an unavoidable bloodbath for a multitude of 'zombie' borrowers, investors and lenders."
Story includes 4-minute video.
Read the full story: 'Zombie Buildings': Are They The Next Economic Calamity?
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Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.
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City of Thousand Oaks
City of Wisconsin Rapids
Harvard University Graduate School of Design
The Architects Foundation
University of Cincinnati Online
Northern Illinois Transit Authority (NITA)
The Pocatello Development Authority
The Urban Renewal Agency of the City of Pocatello