Dallas-Fort Worth Commercial Real Estate Foreclosures Surge

February 26th, 2010 by Reed Allmand

Approximately 250 commercial real estate properties in the Dallas Fort-Worth area are facing foreclosure.  Foreclosure filings for about 250 properties include buildings, hotels, shopping centers, warehouses and commercial land. In total, the foreclosures represent more than $900 million in debt.  Some of the biggest foreclosures were the Four Seasons Resort and Club with more than $183 million in debt and the Mosaic apartment buildings with around $66.5 million in debt.

Commercial real estate foreclosures have come to represent a new wave of foreclosures that are directly impacting the business world.  The foreclosures seem to be spread across industries, but high debt and the inability to refinance seem to be the common factor amongst them.  While the commercial lending freeze has eased up somewhat, it is still limited.  Many lenders are afraid to lend too much too soon while the recession is ongoing and unemployment is high.  With consumer spending at an all time low, many businesses are finding that expansions made in the last decade to accommodate growth are now serving as an albatross that is sinking many properties into foreclosure and some businesses into Chapter 11 bankruptcy and even Chapter 7 bankruptcy.   Lenders fear that their loans will be wiped out or significantly reduced in any bankruptcy filing a company makes.  But on the other hand, some lenders are investing in companies who have filed bankruptcy since they know the debtor-in-possession loans will receive priority in the bankruptcy proceeding.  Fortunately for companies that were struggling pre-bankruptcy, debtor-in-possession loans have made it possible for them to emerge from Chapter 11 bankruptcy viable and competitive.