That's the question industry leaders seem to be consistently debating. In all truth, the answer is who knows. The reason isn't so much that we're not sure what financial position we're in as that is very clear. The reason for the confusion is that the outcome really depends on our chosen reaction to the soon to be crisis. It is a fact that over 50% of commercial mortgages in New York will be up within the next 5 years. Given current market conditions especially with respect to the job market and GDP, we know that of those 50% of mortgages a good number of landlords will not be able to pay up. The questions to follow are:
Are the banks going to foreclose and flood the market with property no one can finance?
Are the banks going to extend terms?
Is the government going to structure another bailout plan specific to commercial real estate?
And the answer once again is who knows. Everything is up in the air as for now being that no concrete decisions have been made. My feeling is that taking back property is the last thing banks should do as they'll flood the market with distressed real estate that they won't even let landlords finance. Hopefully, it'll all shake out within the next six months (in terms of decision making). All there is to do now is wait.