A rise in nonperforming loan sales will be a net positive for commercial real estate, according to Standard and Poor's in a note released this morning.
This would, they said, be a signal for some recovery in prices. It would also assist in clearing bank balance sheets, analysts from S&P stated.
They said that nonperforming loan volume in the market will go up given that banks are going away from extending loans into sales.
The Federal Desposit Insurance Corp. is also continuing to sell loans from distressed financial institutions, S&P cited a report from Ernst & Young (E&Y) report. S&P analysts mentioned that E&Y projected $800 billion to $1.2 trillion in commercial real estate maturities in the next five years, with up to a third of these that would experience difficulties refinancing.