Southern Nevada’s homes market isn’t the only real estate sector seeing falling loan delinquencies.
An improving economy means fewer commercial borrowers are in danger of default, too.
New numbers from Trepp, a New York-based commercial real estate and banking research firm, show a substantial drop recently in late commercial loans. The Las Vegas Valley in December had 53 properties with real estate loan payments that were more than 90 days late, for a 10.7 percent delinquency rate. That was down from 14.9 percent in December 2013.
It was also less than half of the rate in mid-2011, when 24 percent of local commercial properties were behind on their real estate loans, said Sean Barrie, a Trepp research analyst.
Nearly 150 local properties were delinquent in mid-2012.
Delinquencies are an important economic indicator because they reflect whether commercial landlords can make their payments. That’s driven in turn by economic expansion and business formation.
Delinquencies are falling as more borrowers and banks look for loan-workout strategies, Barrie said.
Those alternatives to default are available because the local market has stabilized, said Bob Ybarra, an analyst with commercial brokerage CBRE Las Vegas.
“You’re seeing a lot more absorption (leasing of space) in industrial, office and retail properties,” Ybarra said. “The overall fundamentals are better: You have a strong economy, businesses are rebounding, there’s more job creation, and there’s more wealth. We’re not breaking records, but some of these centers are starting to fill up with tenants again. And when they fill up, the landlords can service their debt.”
Written by Jennifer Robison
Read the full article at the Las Vegas Review Journal.
Las Vegas Review Journal Article