Bethesda, MD, May 19th, 2017 – Phillips Realty Capital CEO Steve Shaw recently weighed in with Washington Business Journal on CMBS debt approaching maturity:
The troubled properties are mostly suburban, suffer from high vacancy rates, aren’t close to a Metro station, need substantial and costly renovations or are in parts of the region where demand for office space has significantly diminished.
“Most of that stuff is stuff that couldn’t get refinanced before, so yes, there will be some issues,” said Stephen Shaw Jr., president and CEO of Phillips Realty Capital. “I think the majority of what you’re going to see is suburban office. That’s been the problem child, and they were the most prolific receivers of CMBS.”
The higher-quality assets have already been resolved, Shaw said, diminishing what many predicted was going to be a heavy flow of distressed real estate. Even companies such as Artemis Real Estate Partners and NVCommercial that set up funds a couple of years ago to take advantage of CMBS defaults have opted not to pursue what’s left.