Is South Florida Commercial Real Estate Making a Comeback?

ATLANTA, GA, March 26, 2012 — February 2012 marked the fewest commercial real estate foreclosures over $250,000 since November, further pulling down the average number on a monthly basis, according to an exclusive report by Off-Market RADAR, the only source for direct contact information to decision-makers on commercial real estate transactions.

Miami-Dade and Broward counties combined for 35 foreclosures in February after posting 67 in January, near a seven-month record. There have been an average of 45 foreclosure filings each month on commercial properties over $250,000 over the past seven months and this average has been drawn up by two significant spikes in August and January. Every other month has been below the average for the time period, some significantly lower.

Off-Market RADAR tracks foreclosures, loan sales, mortgages, deeds, CMBS loans and other transactions in Miami, Fort Lauderdale, Orlando, Jacksonville and Tampa Bay. The Atlanta-based firm utilizes information from public records as well as its own, independent research.

Miami-Dade County

Brian McCarthy, (top right photo) Vice President of Off-Market RADAR says, “It seems like there was an onslaught of filings in Miami-Dade County in January which really disrupted a significant downward trend in South Florida.” Prior to January, the most filings in Miami-Dade County were 45 last August. As expected, Miami-Dade has a higher number of filings on average at 27 than Broward County.

McCarthy adds, “The larger difference is that when you look at those 55 commercial foreclosure filings in Miami-Dade in January, only four were over $2 million. Our clients are primarily looking for deals over $2 million and in months like this, it can take a lot of time spent just digging through the data to uncover the four or five deals worth chasing.”

Broward County

Broward County is much more consistent in filing volume, with an average of 18 filings per month over the past seven months.  Nevertheless, with January and November having very low filing counts of 12 and 13 respectively, the trend is towards fewer commercial foreclosures.

Larger Deals

“Most of the filings for properties under $1 million are for owner-occupied properties in non-investment-grade assets which are very hard for all but the most management-intensive investors to tackle,” McCarthy continues. November was clearly the slowest month from September to January, with only two foreclosures over $2 million, but September and October were very active with a dozen in each month.

Most Active Banks

Bayview Loan Servicing was the most active foreclosing lender since August of last year. Bayview went after 22 commercial properties over $250,000, almost double the next most-active filer.

 Bayview primarily buys small-balance commercial loans from banks and other lenders, then attempts to work out those loans with borrowers. US Bank and Wells Fargo, both in second place with 14 filings, have Commercial Mortgage-Backed Securities (CMBS) Trustee divisions, which may account for a larger portion of their filings.

 

Tied for third place are Florida Community Bank, SunTrust Bank, and US Century Bank, all with 11 filings over the same time period.

Looking Forward

“There are a lot of maturities on the horizon,” says McCarthy. “We really see lots of investors chomping at the bit to scoop up deals this year before they hit the auction block in 2013 or beyond. Filings will likely start towards the middle or end of this year as borrowers find they are unable to refinance or sell above the debt levels, and opportunistic investors are looking to buy notes or judgments instead of waiting for the foreclosure to play out.

“Now that banks are generally better capitalized, the losses they’ve been ignoring over the past couple years are going to start hitting the books and at that point, there’s not a huge reason for them to wait for the drawn-out foreclosure process to play out,” adds McCarthy.

www.OffMarketRADAR.com

 The goal of Off-Market RADAR is to relentlessly pursue transparency of commercial real estate information to drastically increase the efficiency of the market, drive down transaction costs, and increase transaction probability.

For more information, contact Brian McCarthy at 404.939.7256 or brian@offmkt.com.