US - The sum of US real estate ‘in distress' has doubled since the start of the year and the equity of $1.3trn (€900bn) investing in US property is at risk, according to data providers Real Capital Analytics.
The report, ‘The Big Picture - trillions of property at risk', by RCA president Robert White, will make intriguing reading for investors looking to capitalise on distressed situations in US real estate.
White estimates that $2.2trn of real estate acquired or refinanced after early 2004 will have lost value since and will now face significant refinancing hurdles even if prices stabilise, given that they are typically leveraged 70-80%.
Some of the $1.3trn of equity invested in US real estate which White claims is "at risk" could already have been wiped out since properties acquired or refinanced in 2006-08 have seen price declines of 25% or more.
White's analysis includes only office, industrial, apartment and retail properties; hotels, land, other property types and smaller asset could add billions more to the total, he said.
A total of $93bn of real estate has fallen into default, foreclosure or bankruptcy since the downturn, the report found, representing a doubling of distress since the start of 2009.
Less than 10% of the distressed situations that have emerged have been resolved, the RCA study found, because lenders have been slow to foreclose on assets.