Like this:

The Congressional Oversight Panel has released its February report titled “Commercial Real Estate Losses and the Risk to Financial Stability.”  From the title alone, it is clear that this report does not paint a rosy picture for the status of commercial properties.

The bulk of the report focuses on the number of loans which are scheduled to come to term within the next few years, and the expected effect of a mass borrower default on those loans.  The brunt of the problem is that properties were bought on high debt ratios, and those same properties have subsequently decreased significantly in value.  Essentially, the report anticipates increased commercial foreclosures and eventually substantial losses by banks.

Many investment groups are salivating at the prospect of so many bank-owned properties coming available for sale at significant discounts over the next few years.  That means, as landlords and tenants, we can expect a turnover of landlords/property owners several times in the coming months and years.

Now is a good time to familiarize yourself with the terms in your leases regarding assignment of the lease, subordination, non-disturbance, and attornment.  It is important for landlords and tenants to be ready for the changes ahead.  In the coming days, The Commercial Leasing Law Blog will take a look at these key provisions and what these changes can mean for landlords and tenants.

You can read the lengthy report here, or the executive summary here.

Advertisement