Commercial real estate foreclosures spike 117% over the last 12 months according to ATTOM.
Interest rates and hybrid economy are hitting commercial real estate hard.
According to ATTOM, “The report reveals a continued increase in commercial foreclosures over the years, from a low of 141 in May 2020 to the current figure of 625 in March 2024.”
Compare that to the 141 foreclosures reported back in May 2020.
The peak record came in 2014 when there were 889 commercial foreclosures reported.
California Foreclosure Quake
California represents the epicenter of this foreclosure spike! The ATTOM report stated, “In March 2024, California had the highest number of commercial foreclosures for the month, at 187. This was an 8% decrease from last month but a 405% increase from last year. California began experiencing a notable rise in commercial foreclosures in November 2023, surpassing 100 cases and continuing to escalate thereafter.”
New York, Florida, Texas & New Jersey Feel Aftershocks
The ATTOM report also noted, “New York, Florida, Texas and New Jersey also showed significant variance over the decade, with each state continually increasing. New York had a total of 61 commercial foreclosures in March 2024, a 5 percent increase from last month and a 65 percent increase from a year ago. Then came Florida which saw a 30 percent increase from last month and a 107 percent increase from last year. Texas saw a 31 percent increase from last month and a 129 percent increase from last year. Finally, New Jersey saw a 31 percent increase from last month and a 133 percent increase from last year.”
There are still additional foreclosures expected since interest rates are continuing to rise, forcing borrowers to refinance at much higher levels.
According to ATTOM there is $2.2 trillion in debt coming due by 2027.
According to Fitch Ratings, there is a great concern of a rising global contagion risk from commercial real estate losses. Some are concerned that this may represent the domino that has a catastrophic effect on the world economy.
In addition, there is a problem with the high vacancy rates in the office market, such markets as Europe and the Midwest in the U.S.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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