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Foreclosure Warning Cites Office Market

LOS ANGELES, CA-Vacancy rates above 14% in L.A. and other major office markets increase the risk of delinquencies on office building mortgages, a report says. Economic factors driving population and employment growth for major U.S. office markets are expected to remain sluggish.

By Bob Howard | Updated on October 28, 2002

LOS ANGELES, CA-The Los Angeles region was one of a number of U.S. office markets with vacancy rates above the 14% national average at the end of the second quarter 2002 that could produce higher delinquencies in office building mortgages, according to a new report by Standard & Poor’s Real Estate Finance group.

The report, titled “Sluggish Economy Could Increase U.S. Office Mortgage Delinquencies Over the Long Term,” says that there were no reported office loan delinquencies in the Los Angeles region as of July 15. However, the report uses the example of the Los Angeles combined metropolitan statistical area (CMSA) to exemplify that economic factors driving population and employment growth for major U.S. office markets are expected to remain sluggish, resulting in increasing mortgage delinquencies throughout the nation. The Los Angeles CMSA comprises Los Angeles and Orange counties and the Inland Empire, which includes Riverside and San Bernardino counties. At the end of the second quarter of 2002, the Los Angeles CMSA had an average vacancy rate (15.6%), the report says.

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