North Texas Foreclosed Bank Owned Apartments Rising

by Peter Vernon on States

The value of foreclosed bank owned apartments, offices, warehouses and shopping centers in North Texas could hit $1 billion by the end of 2009 as foreclosures on commercial properties keep rising.

As of date, nearly $460 million worth of apartment buildings and commercial buildings have become foreclosed bank owned properties, according to Texas real estate data.

Since January, a total of 546 foreclosed bank owned land assets and commercial buildings have already been sold at foreclosure auctions, and most of them were taken back by the mortgage lenders.

More than 1,200 commercial properties have been foreclosed during the first 7 months of 2009.

Out of all foreclosed bank owned properties auctioned off since January, 153 properties were land, more than 60 were apartment complexes, 37 were office buildings, 32 were shopping centers and 16 were warehouses. Most of these properties were built in the 1980s.

Although most of the foreclosures in the first months of 2009 were built in 2005, an increasing number of newer properties are entering foreclosure listings.

The average amount of loans that entered foreclosure was about $813,000, but several of the loans for bigger buildings were in millions. The developers of the Richardson Heights Shopping Center owed their lender $20 million while the owners of the Overton Centre Office Complex in Fort Worth owed their bank over $25 million.

At the foreclosure auctions, a warehouse in Carrollton was sold for $12.4 million, an office building in McKinney was auctioned off at $13.1 million and a portion of Southwester Center in Dallas was auctioned off at $10 million.

Dallas had the highest number of commercial properties sold at auctions, with 159 properties sold. Tarrant County was second, with a total of 147 properties sold.

Based on foreclosure records, the total tax assessments for the foreclosed properties were about 25 percent higher than the total of the loans owed.

Compared to the first months of last year, commercial foreclosures in the Dallas-Fort Worth metro area have increased by around 12 percent. But according to real estate analysts in North Texas, the level of commercial foreclosures in 2009 have not yet reached the staggering commercial foreclosure level in the early 1990s.

The growing pace of foreclosures in the commercial sector highlights the lingering effects of foreclosures in the residential sector. Both commercial and residential properties have now been getting into bank owned foreclosed inventories.