Lenders have already begun taking some property owners and developers who are late on their payments to court. In hopes of minimizing their financial losses, and protecting their investors many are seeking foreclosures on their interests in these properties. Many of these properties are hotels and retail spaces which have been severely hit by the pandemic. As this economic turmoil unfolds many real estate experts and attorneys predict increased foreclosure proceedings across commercial real estate in Manhattan.
According to Moody’s, the delinquency rate on commercial loans is just below 5.78 percent, which has doubled in just one month. Compared to the 2008 crisis when the rate hit 10% over the course of 4 years. This has investors worried. Hedge funds and private equity firms have provided billions of dollars in mezzanine financing could be facing major losses.
It’s critically important to have proper guidance during these times. Contact GE Grace for help negotiating your lease.