The Wall Street Journals Jonathan Karp provides a fascinating expose’, entitled HARD MONEY: Real-Estate Financier’s Death Hints At Trouble for Lenders, detailing a griping personal tale of Scott Coles and his company Mortgages, Ltd., that outlines a bizarre set of facts even greater than what fiction could believably spin.  

Unfortunately this story is true, and arguably representative of not only the past and present realities of the market, but telling of what the future of commercial real estate finance holds for us, moving forward in the days ahead. This is much more than one mans rise and fall …

The Financial Facts: So far, the commercial-property market has been spared the devastating losses felt in the housing market because there wasn’t flagrant overbuilding. Over the past several months, this Blog has documented this phenomena, extensively.

But declining property values and a weakening U.S. economy are starting to bite: Mortgages Ltd. of Phoenix, Arizona and other lenders are reporting a significant jump in loan defaults. That’s placing enormous new pressure on the lenders, which have bet billions of dollars on new construction of commercial properties. Here’s what happens when those bets, fail …

The Real Life Tragic Result: Flamboyant real-estate financier Scott Coles penned a farewell letter, put on a tuxedo and climbed into bed, where he was later found dead in what police believe was a suicide.  

The tragedy last month involving Scott Coles is drawing attention to the condition of the nation’s commercial real-estate market, which is beginning to show mounting signs of distress.

Tags: commercial real estate, Hard Money Lenders

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