As Landlords, Banks Need Help
Consider the consequences of the overbuilding of office and retail space in many parts of the country during the boom of the 1980s.
Commercial mortgage loans more than doubled between 1982 and 1985, from $11 billion to $27 billion, fueling the current oversupply of metropolitan and suburban office and retail space.
Between 1985 and 1989, insurance companies supplied $20 billion annually to finance commercial projects. Many of these loans, for terms of five to seven years, are now due - at a time when new mortgage money is not readily available.
Since 1987, retail sales per square foot have been dropping while the construction of new retail space has continued.
Apartment buildings are also suffering. Rental increases have failed to keep pace with rising costs - of operation, capital replacements for aging properties, environmental issues such as asbestos removal, and government …