Experts: Lenders more inclined to work out commercial loans

Distressed commercial loans — whether for office, industrial, retail or even multifamily housing — have a better chance of getting a mortgage modification than underwater homeowners, local real estate experts say, because those lenders have more at stake. Commercial property owners often have a greater ability to turn around a distressed financial situation than individual borrowers. They can bring in new tenants, they have more access to capital and credit, and they can find investors and business partners, said Craig Hannay, president of Phoenix-based Hannay Investment Properties. Lenders are taking a more flexible and active approach when it comes to troubled commercial mortgages, said Bob Young, first vice president of investment properties for CB Richard Ellis in Phoenix. Like their residential brethren, an increasing number of Phoenix commercial real estate loans are underwater because of the market and economic slides, he said. Banks have been criticized for not modifying distressed home loans.

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