Commercial Real Estate Investor Training – New Opportunities In Commercial Real Estate Investing Following General Growth Properties Bankruptcy
General Growth Properties, the nation’s second-largest mall owner with 200 shopping centers spanning 200 million square feet and 24,000 tenants, filed for bankruptcy protection earlier this month.
General Growth said the continuing credit crisis made it impossible to refinance the roughly $3.3 billion and $6.4 billion in debt that would come due for GC this year and next year, respectively.
The General Growth bankruptcy is indicative of credit crisis being felt throughout the world. Commercial real estate investors have been especially hard hit due to waning retail demand and record levels of unemployment.
So, where is the opportunity amongst all of this doom and gloom for commercial real estate investors?
Well, given the fact that over $150 billion of commercial property is already in distress, and that $87.1 billion of that is in the form of defaulted mortgages, there is a tremendous opportunity right now to do workouts, options and subject to deals.
The opportunity arises from the fact that many commercial real estate investment companies, including General Growth, are finding it increasingly hard to refinance mortgages issued to them back in the good old days when real estate values were soaring.
As they are unable to refinance their existing debt and unable to raise rents or retain tenants who are failing in their own businesses, more and more of this defaulted commercial paper will become available to buy, and prices should be very attractive.
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