Jan 06

The MBA NewsLink reported today that a week holiday season is increasing the probability of delinquencies on commercial real estate loans in addition to the already record high foreclosures in the residential mortgage market. Is this the final phase? Or is there more to come?

“After weak holiday sales, a likely wave of retail store closings this year could pile on to current delinquencies in commercial mortgage-backed securities and other loans secured by retail properties.

“Based on data from the Bureau of Labor Statistics, the International Council of Shopping Centers projected 73,000 stores could close in the first half of this year and announced store closings could top 3,100 during the same time.

“That didn’t take into account what was going to occur in the fourth quarter with real data,” said John Connolly, research analyst at ICSC. “We’ll have to see how that falls.”

“Some reports said the holiday season did not meet expectations and could lead to a high number of store closing announcements early this year. Last month, the National Retail Federation reported electronics and appliance stores sales declined by 5.4 percent in November, year-over-year, as clothing and clothing accessories stores sales dropped by 7.4 percent from November 2007.”

Read the full article here: “Delinquencies Rise Off Retail Store Closings

Retailers cited as having difficulty – either closing stores, pulling back expansions or leaving the market entirely – include Mervyn’s, Linens ‘N Things, Circuit City, Starbucks, KB Toys, Office Depot and Borders, among others.

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