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Chicago Distressed
Real Estate Trends
Prepared for:
GreenPearl Distressed Real
Estate SummitMay 13, 2010
Presented by:
Matthew Anderson
Commercial Real Estate Values Moody’s/REAL CPPI vs. NAREIT Price Index
0
25
50
75
100
125
150
2006 2007 2008 2009 2010
Moody's/REAL NAREIT
Sources: MIT CRE, NAREIT, Foresight Analytics
Index, 12/2005 = 100
Peak to Current:
-42% (CPPI)
-38% (NAREIT)
Commercial Mortgage MaturitiesLoans Maturing By Year
0
50
100
150
200
250
300
350
1990 1995 2000 2005 2010 2015
Commercial Multifamily
Source: Foresight Analytics
$ Billions
Underwater Mortgagesby Maturity Year
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014
LTV > 100% LTV < 100%
Source: Foresight Analytics
$ Billions
Commercial Real Estate Loan Maturities
In Chicago, $ Billions
Next 3
Years
(2010-2012)
Next 5
Years
(2010-2014)
Commercial Mortgages
Banks $17.1 $30.6
CMBS $5.1 $7.6
Commercial Mtg Total $22.2 $38.2
Construction Loans $10.4 $12.0
CRE Total $32.6 $50.3
Sources: Trepp Loan, Foresight Analytics
Commercial Real Estate Delinquencies Percent of Amount Outstanding
0%
5%
10%
15%
20%
1990 1995 2000 1Q02 2Q03 3Q04 4Q05 1Q07 2Q08 3Q09
Construction Commercial Multifamily
Sources: FDIC, FFIEC, Foresight Analytics
Chicago Commercial Mortgage Delinquency Rates
CMBS, by Property Type
0%
5%
10%
15%
20%
25%
4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10
Office Retail Lodging Industrial Multifamily
Source: Trepp, LLC
30+ Days Past Due
CRE Distress SummaryDelinquent CRE Loans in Chicago, $ Billions
Source/Type 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
Banks
Construction & Land 2.1 2.7 3.0 3.2 3.0 2.6
Commercial Mtg 0.9 1.2 1.6 1.6 1.5 1.7
Multifamily Mtg 0.3 0.4 0.5 0.5 0.6 0.7
CMBS
Total 0.4 0.5 0.7 1.0 1.0 1.5
Retail 0.1 0.1 0.2 0.3 0.4 0.5
Office 0.1 0.2 0.3 0.3 0.2 0.4
Lodging 0.1 0.1 0.1 0.2 0.2 0.4
Industrial 0.0 0.0 0.0 0.0 0.0 0.1
Multifamily 0.1 0.1 0.1 0.1 0.1 0.1
Sources: Trepp Loan, Foresight Analytics
Recent Foreclosure ActivityChicago Metro Area
Property Name Property Type City
Loan
Amount,
$ Mill.
Origination
Year
Northern Lights Crossing Retail Gurnee $5.4 2004
4055 West Peterson Avenue Industrial Chicago $3.0 2007
Bank One Ground Lease
Retail (Ground
Lease) Orland Park $1.5 2005
Sheraton Four Points - O'Hare
Airport Lodging Schiller Park $22.5 2006
South Suburban Industrial Portfolio Industrial Various $10.2 2006
Embassy Suites - Chicago Lodging Deerfield $13.9 2000
Rolling Meadows Plaza Retail Rolling Meadows $6.9 1999
Carolina & Hawthorne Buildings Industrial West Chicago $1.3 2001
Lakeview Square Shopping Center Retail Naperville $4.6 2004
Hotel Burnham Lodging Chicago $36.0 2007
Source: Trepp Loan
Bank Distress
FDIC Problem Institutions vs. Foresight Watch List
Source: FDIC, Foresight Analytics
15 13 11 14 13 12 12 19 21 20 30 49
466512
590645
371
276
77141109
0
100
200
300
400
500
600
700
800
1Q
05
2Q
05
3Q
05
4Q
05
1Q
06
2Q
06
3Q
06
4Q
06
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10e
Foresight FDIC
Bank Distress
Closure Hot Spots—Watch List Institution Count by State
Source: FDIC, Foresight Analytics
State 1Q09 2Q09 3Q09 4Q09 1Q10*
Closures –
Current Cycle
Georgia 55 64 63 74 77 38
Florida 55 70 83 85 73 25
Illinois 42 49 51 61 60 31
California 20 29 35 31 27 26
Minnesota 18 25 27 29 26 11
Washington 18 23 27 30 24 9
Michigan 14 21 22 25 21 7
Colorado 4 4 8 13 17 3
Missouri 11 13 17 15 16 8
Kansas 11 12 13 14 14 4
Wisconsin 7 8 16 15 13 1
North
Carolina 2 2 3 11 13 2
South
Carolina 3 8 7 14 12 1* Partial Quarter
Bank Distress
Bank Failures—Current Cycle and Near-term Forecast
Number of Closed Institutions
* Through 04/30/10
Source: FDIC, Foresight Analytics
0
10
20
30
40
50
60
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q102Q10*3Q10 4Q10 1Q11
Actual Projected