RCA: Q1 Adds $23B to Distressed Asset Total

NEW YORK CITY-The first quarter of 2009 saw at least $23 billion of distressed assets added to the tally being measured by Real Capital Analytics, the locally based research and consulting firm says in a new report. The New York City metro area, with $9.2 billion from 189 known troubled assets, represents more than 10% of the US total of $86.8 billion.

However, sheer dollar volume does not tell the whole story, and RCA says the biggest concentrations of distressed assets are in “the expected places,” including Las Vegas and South Florida as well as tertiary markets around the US. “There is no question that because New York City metro has the most expensive properties, it was going to represent a significant percentage of distress in the US on a dollar value basis,” Dan Fasulo, managing director at RCA, tells GlobeSt.com. “That’s why it’s also important to put the distress into context with overall market size.” A chart in the New York metro overview, one of eight such local “Troubled Assets Radar” market reports now available from RCA, places the region’s submarkets well down the list in terms of distressed property as a percentage of the market total.

Fasulo observes that the velocity of properties going into distress has accelerated “as more owners decide to capitulate and hand property back to bank or agree to a fire sale. We are in the first phase of the distress cycle now and should be well into it by the second half of this year.”