‘Foong on Finance’: Commercial Real Estate Has Not Truly Recovered, Says Trepp

Both residential and commercial real estate may still be marked by weak growth.

GDP growth has dropped to 1.8 percent in the first quarter, according to government estimates released this week. And there has been an unexpected rise in the number of unemployment claims.

Now, Trepp LLC maintains that the recently improving numbers for delinquencies in commercial and residential real estate loans held by banks may be reversing itself. Trepp estimates that delinquencies, which have been falling in the latter part of last year, will decline slightly in the first quarter.

“Our detailed research through earnings reports and call report filings from smaller banks indicates that the recovery in delinquency rates that began in the second quarter of 2010 appears to have stalled,” states Matt Anderson, managing director, Trepp. “This underscores the fact that markets have not yet truly recovered and also reflects anemic growth for both residential and commercial real estate.”