Although San Diego’s commercial housing market is booming, the latest foreclosure stats show that success isn’t always guaranteed. Even in this market there are over 70 commercial foreclosures listed throughout the county, and in areas that are doing very well.
The impact of COVID-19 continues to be felt with many companies maintaining work-from-home policies, while consumer habits are still in flux as the city deals with inflation and tech industry layoffs.
As always, diversification is a good way for lenders to protect themselves during these uncertain times, but an advocate like Total Lender Solutions (TLS) can be a critical resource if a commercial property enters foreclosure.
The TLS team always keeps an eye on the local market to stay ahead of the game. Here’s what you can expect to see in 2024.
San Diego Commercial Foreclosures By the Numbers
Entering February, San Diego County had 71 commercial properties in foreclosure, according to PropertyRadar.com.
The largest concentration of foreclosures was near Downtown San Diego and the surrounding neighborhoods, but there were also numerous foreclosures in the South Bay, East County, and even the more affluent cities in North County.
Downtown San Diego Commercial Foreclosures
Downtown San Diego has long been the economic hub of the city, with a high volume of retail businesses, offices, residences, and industrial buildings. However, there were about 30 commercial foreclosures near Downtown, which is proof that a strong economy cannot compensate for poor business management or changing industries.
Let’s take a look at a couple of these Downtown properties in foreclosure.
A mixed-use property built in 2019 is short $137 million on its loan, despite being located in a part of town that’s trendy and redeveloped. The building has retail space and residences, which should make it a prime location for businesses.
Total Lender Solutions founder and CEO Randy Newman says that commercial real estate can enter foreclosure even in areas that should have plenty of business potential.
“Problems like homelessness can make areas less desirable to homeowners, retail businesses, and companies looking for office space, even if the properties are brand-new and there are a large number of people living in the area.”
Other Commercial Foreclosures in San Diego
San Diego’s tourism revenue continues to grow, which is why the city has a rapidly-growing hotel industry. However, even the hotel industry can experience financial challenges.
Hotel Circle is a well-known strip of hotels that is popular with travelers due to its central location. Yet there’s multiple hotels here that have entered foreclosure.
One hotel, which was assessed at $47 million in 2003, has an outstanding loan balance of over $16 million. Another hotel, assessed at $29 million in 2000, is short $27 million on its loan.
“Hotels and lodgings are a hot commodity in San Diego’s bustling tourist market,” says Newman. “But it’s important to remember that the type of traveler visiting San Diego has changed.
“There are more vacation tourists, but not as many business travelers. Remote work has diminished business travel in some places, so properties that historically rely on business travelers may be more impacted.”
When to Start a San Diego Commercial Foreclosure
Want to begin the foreclosure process in San Diego or elsewhere in California? Total Lender Solutions is a trusted partner in California commercial foreclosures.
Commercial foreclosures are complicated, but our team can take charge of the process to earn you the best possible resolution, whether you’re an institutional or private lender. Contact us today to see how we can help.
