Predictions were made earlier by some market analysts that the commercial property market of Dallas-Fort Worth, Texas, will decline considerably in 2010. However, foreclosure Lis Pendens attached to commercial real estate remained low last year, disproving earlier projections of some analysts.
Around 700 commercial Fort Worth distressed properties were sold at auction in 2010, including apartments, hotels, office buildings, land and warehouses, according to the Addison-based Foreclosure Listing Service. And although the region's commercial foreclosures totaled $1 billion during that time, the amount was way below the losses that were predicted for the market in 2010.
According to real estate analysts, last year's commercial foreclosures did not even come close to the commercial real estate bust that happened in the Dallas-Fort Worth area in the 1980s. Although Texas distressed homes did show some increases in certain areas, the commercial real estate market performed better than expected. Realtors reported that foreclosure filings against commercial properties last year were only about 10% of the filings posted in the 1980s.
Market analysts stated, however, that despite proving predictions wrong, it was not exactly smooth sailing for the commercial property market last year. Lis Pendens foreclosure filings for commercial properties increased by 40% in 2010 compared with 2009. However, the figure for actual foreclosures only increased by around 10% on a year-over-year basis. Realtors reported that less than 25% of commercial real properties facing foreclosures last year were sold by banks and lenders.
Unlike a foreclosed or distressed home, a commercial foreclosure can be worth millions which makes the dollar impact of a filing much more serious than a residential foreclosure. Last year, the average worth of debt of commercial foreclosures was around $1.3 million. There were also big money foreclosures recorded in the commercial market last year, including the $122 million-worth Four Seasons Resort. The Mosaic apartment building in Dallas was also huge in terms of dollar amount, with the property reportedly in debt for $48 million.
Market observers stated that commercial foreclosures might decline in 2011, but it will depend on the first few months of the year. They stated that realtors are watching how many foreclosure Lis Pendens will be filed on commercial properties during the first quarter of the current year.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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