NEW YORK, Aug. 18 (UPI) -- A skid in the U.S. commercial real estate market could be accelerating as the recession begins to retreat, an IHS Global Insight market analyst said.
"We seem to be nearing the end of the recession but the situation in the commercial real estate market is getting worse," analyst Patrick Newport told USA Today Tuesday.
On Monday, the Federal Reserve extended a program six months to buy $200 billion of securities backed by commercial property, a program that has to date only lent investors $29.6 billion
Real Estate Econometrics President Sam Chandan said commercial mortgage defaults could reach 4.1 percent by the end of the year, up from 2.25 percent in the first quarter.
Real Capital Analytics estimates commercial property loans worth $83 billion have been involved in default, foreclosure or bankruptcy in 2009.
Lenders however, are becoming more reluctant to push a commercial property into foreclosure, which would force them to resell the properties at lower prices, New York real estate attorney Edward Mermelstein said.