Commercial Loan Defaults Indicate Future Problems

The delinquency rate for securitized loans in North Texas is 50% higher than the national average, and several prominent commercial properties are among those identified as having delinquent loans or loans likely to land in default (watchlist loans), according to Trepp LLC a national real estate research firm.

Today Foreclosure Listing Services in Addison announced that the Four Seasons Resort in Los Colinas home of the PGA's Byron Nelson Classic is set for foreclosure on February 2nd.  The $175 million delinquent loan had been on the watchlist .  Four Seasons did a $60 million renovation over the past two years.

There are over 700 commercial property loans in the area that are cause for concern.  Here's a breakdown by property type:

• Industrial -          $218.3 M
• Hotel -                $568.2 M
• Multifamily -        $1.43 B
• Office -               $1.9 B
• Retail -                $2.1 B
• Other -                $600 M
• ALL TYPES       $6.81 B

Source: Trepp LLC

The largest loan on the watchlist is the $232 M loan for Galleria Towers.  In addition to the $1.45 billion in delinquent loans, $972.5 million worth have been transferred into special servicing (when the management of the loan is transferred from the master servicer to a special servicer.  This can occur when a borrower has defaulted or, in the reasonable judgement of the master servicer, is likely to default and be unable to fix the issue within a reasonable time).  In order to make any significant changes to a securitized loan, you have to be talking to a special servicer.

Interesting statistics as we begin to hear that the recession is healing.  Are we headed for a relapse?  Caution ahead!

Sources: Trepp LLC, Dallas Business Journal

Petition for change to Oncor tree-trimming 

In this month’s Far North Dallas Advocate, columnist Sandy Greyson sheds some light on Oncor’s tree trimming practices, and those “deep V” cutouts they typically leave behind, which infuriate some homeowners.

A group of fed up homeowners are now petitioning the Public Utility Commission in an effort to make Oncor change its ways. The group points to cities like Nashville and Oklahoma City, which have been able to improve tree-trimming standards.

Some of the proposed changes on that petition include cutting trees back 3 feet from power lines, instead of the current 10 feet; trimming trees every three years, instead of every 12 years; and notifying homeowners about trimmings six weeks in advance, instead of five days. They’d also like Oncor to tailor trimming practices based on the species of tree, and have a real person answer the phone when homeowners call in with questions or complaints, instead of the automated system currently in place.

You can see a complete list of what’s on that petition here. And if you’d like to download the petition and mail it into the Public Utility Commission, you can find it here. 

by Marlena Chavira Medford  Advocate Mag, Lakewood - E Dallas