The Real Deal Miami

Shoppes on the Green joins list of SF’s largest delinquent loans

More troubled loans loom
By Alexander Britell | February 10, 2012 09:45AM

The Shoppes on the Green

Weston’s Shoppes on the Green has joined the list of South Florida’s largest delinquent commercial property loans, according to data from analytics firm Trepp prepared for The Real Deal.

The retail property was current in December, but is now listed as 60 days delinquent on its $14.65 million loan. Trepp’s data looks at commercial properties that are 60 days or more delinquent on loans with balances of greater than $1 million.

The Walgreens-anchored property, which is located at 101-199 Weston Road, currently has six spaces totaling 21,000 square feet available for lease, according to LoopNet.

That represents the fifth-largest delinquent loan balance in Broward County.

The Ireland Companies, the owner of the Shoppes on the Green, could not be reached for comment.

Despite the new addition, South Florida’s delinquency rate, which was at 10.9 percent in January, has been flattening out, according to Manus Clancy, senior managing director for Trepp.

“It’s been kind of flattening out, if you will,” he said. “It peaked at about 13 percent six months ago, and now it’s at 10.9. It’s kind of trickling down – that comes at a time when the national average has also flattened out.”

There were a total of 89 properties in South Florida with delinquent loan balances of $1 million or more in January, according to the data. Of those, 30 were retail properties, 24 were office properties and seven were hotels.

West Palm Beach’s CityPlace, which is in foreclosure, retained the top spot on the list with a $150 million loan balance.

Miami Beach’s Shore Club hotel in Miami Beach, which is also in foreclosure with a $106.6 million loan balance, remained second on the list.

One major shift for the commercial loan market has been an acceleration at the speed of loan resolution, he said.

In 2010, South Florida had 27 loans that were resolved with a balance of $204 million. The losses on those loans were about half that, $101 million. In 2011, the numbers increased: 49 loans with a balance of $473 million were resolved, with a loss severity of $229 million, or about 48.3 percent of the balances.

But while that is something of a positive sign, it doesn’t tell the whole story, Clancy said.

“You see a real acceleration in 2011 in terms of the velocity with which the loans have been resolved, and that’s kind of true nationwide, he said. “While it sounds like a good story, that they’re letting go of it — and it is — a lot of it is because these loans are being resolved with losses, and that’s just removing the bad apples from the pool.”

Despite having fallen, South Florida’s commercial delinquency rate was 10.9 percent in January, up from 9.5 percent in December – a sign that more delinquencies could be coming.

“We’re expecting things to continue to tick up over the next six months, largely because of the loans that originated in 2007 starting to come on line, and they will have a tough time refinancing,” Clancy said.