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Home > Business, Company News, Factory-Built Homes, Manufactured Homes, Modular, News Item > Real Estate Losses in Western North Dakota Start to Mount

Real Estate Losses in Western North Dakota Start to Mount

January 5th, 2016

mod mancamp williston nd  associated press creditAs oil drilling in North Dakota scales back due to the worldwide drop in oil prices, Morningstar Credit Ratings tells nationalmortgagenews nearly $125 million in securitized loans backed by real estate may be in jeopardy. The debt represents over a third of nearly $340 million of commercial mortgage-backed securities connected to the Bakken Shale oil fields.

As MHProNews reported numerous times, including Sept. 13, 2013 and as recently as Sept. 4, 2014, the housing shortage led to a build-up of manufactured and modular housing in the western North Dakota area around Williston, which prompted some of the highest apartment rental prices in the country.

Investment in new buildings to accommodate the oil patch workers began in earnest in 2006; but with the rapid drop in oil prices recently, thousands of oil workers have been cut, reducing the demand for housing in the Williston area.

Three of the four largest loans represent combined losses of $16.5 million if they have to be liquidated. They include the Strata Estates Suites in Williston and Watford City, the Value Place Williston hotel and Roosevelt East Apartments in Williston. An appraisal in November on the Strata Estates loan revealed it was 65 percent below the value of the initial loan in 2013.

The fourth loan is tied to hotels in Minot, ND which is expected to retain its value. ##

(Photo credit: Associated Press-modular mancamp in Williston, North Dakota)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

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