Distress reared its head in Texas last year, and foreclosures are skyrocketing.
In March, commercial foreclosures in the state increased by 129 percent year-over-year and 31 percent from the previous month, Bisnow reported, citing property data company Attom Data Solutions. California, New York and Florida were the only states with more foreclosures last month.
Commercial foreclosures in Texas totaled 55 last month, following 42 in February and 56 in January. Nationwide, there were 625 in March, up 117 percent year-over-year and 6 percent month-over-month.
There’s been a gradual uptick in commercial foreclosures since spring 2020, when pandemic-related moratoriums and financial aid safeguarded property owners. But with these measures now largely unavailable, landlords are facing a harsh reality.
Foreclosures and other signs of distress have been especially apparent in the office sector, which continues to get hammered by the remote-work movement that’s driving up vacancies and available sublease space to historic highs. Foreclosures are on the rise across all asset classes, though.
“This uptick signifies not just a return to pre-pandemic activity levels but also underscores the ongoing adjustments within the commercial real estate sector as it navigates through a landscape transformed by evolving business practices and consumer behaviors,” Attom CEO Rob Barber said.
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Office vacancies in Texas’ major metros were among the highest in the nation to start the year, according to the report. Notable foreclosure cases this year involve the iconic Oil & Gas Building in downtown Fort Worth, the Scanlan Building in downtown Houston and the office building at 211 North Ervay Street in downtown Dallas.
Multifamily foreclosures have been most evident in Houston and San Antonio markets, with syndicators Applesway Investment Group and GVA being on the wrong side of numerous cases.
—Quinn Donoghue