02.12.2010 Weathering the Storm: Tenant Considerations in the Face of Pending Landlord Bankruptcies and Foreclosures
02.12.2010Over the next two years, billions of dollars in commercial real estate loans are expected to mature — loans that many property owners and landlords will not be able to pay off or refinance. As a result, a number of landlords that have purchased, built, renovated and/or refinanced their properties with short-term debt during the previous five years will find themselves in a precarious position. Market forces, combined with the tightening of credit markets, leave landlords holding over-leveraged property, unable to refinance their shortterm debt because of a lack of equity. In addition, these same landlords are finding it difficult to sell their properties for prices that would allow them to pay off their existing loans. Faced with the dilemma of not being able to refinance or sell, landlord bankruptcies and property foreclosures will be prevalent in the next few years. Tenants need to take certain precautions to protect themselves and be aware of their rights when landlords file for bankruptcy or lenders foreclose.
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