Zombie Buildings

[David Morris]

http://www.huffingtonpost.com/2009/11/20/zombie-buildings-are-they_n_365400.html

While the overall U.S. financial system is showing signs of stability,
a rapidly rising tide of troubled loans for commercial real estate
threatens the survival of hundreds of the nation's small and
medium-sized banks.

Financial reports this month from federal regulators and industry
analysts detail a new cycle of uncertainty that they fear could
cripple the economic recovery. Billions of dollars in commercial debt
will have to be paid back or refinanced at a time when property values
have plummeted. About $500 billion will come due in 2010 alone and an
equal amount every year through at least 2012, according to the
Federal Reserve.

Many banks that cater to regional and community developments were
largely unscathed by the residential mortgage meltdown. But now they
are facing huge numbers of possible defaults by builders who erected
thousands of office towers, condominiums and shopping centers with the
easy credit available five years ago. With few tenants, those
developments are turning into what industry insiders call zombie
buildings.