Loans of concern

September 3, 2009

“Loans of concern” has the same ominous ring as the phrase “persons of interest” when uttered by law enforcement officials investigating a murder.

The corpse in this instance is the commercial real estate market, and Fitch Ratings has the latest indication of its morbid condition.

Fitch reports that it has added 432 commerical real estate loans totaling $5.2 billion to its designation of “Loans of Concern.” The 7 percent increase from June through August, means that $80.7 billion of U.S. commercial real estate loans have either deteriorated or defaulted — that is 17 percent of the total U.S. CMBS portfolio rated by Fitch.

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