Throughout 2009, a new large opportunity fund seemed to close on a weekly basis, with investors salivating at the prospects of wholesale discounts. But the tsunami everyone anticipated has been more of a drizzle, mainly due to the willingness of lenders to modify loans.

Obviously, not every can deserves to be kicked down the road. So what kind of recovery rates are lenders realizing when they decide to liquidate defaulted loans? Two recent reports offer a snapshot of how lenders are faring when they sell the asset or distressed note.

Lenders recoup about 64 percent of the outstanding balance of a typical defaulted multifamily loan, according to a report by Real Capital Analytics. This rate is in the middle of pack in terms of commercial real estate asset classes—office has the lowest, at 53 percent, and retail has the highest rate, at 73 percent.

The multifamily industry is seeing the largest amount of recovery activity among all the asset classes, which speaks to the sector’s desirability. But the recovery rate varies wildly by type of loan, and loan-to-value (LTV) ratio. Development loans for new construction or repositionings are the toughest, with lenders recovering just 48 percent, compared to acquisition or refinancing loans (at 66 percent).

Additionally, the higher the LTV ratio at origination, the lower the recovery rate. Mortgages at 50 percent LTVs have a 75 percent recovery rate, while those at 100 percent or more LTVs are closer to the 50 percent recovery mark. And among lenders, regional and local banks are having the hardest time, due mainly to their previously healthy appetites for construction loans.

The report also notes that while the number of properties sold out of foreclosure is rising, relatively few troubled situations have been liquidated by the lender. “Lenders just don’t want these assets back for a variety of reasons. What is getting resolved right now is the easy stuff, the healthier assets,” says Dan Fasulo, managing director of New York City-based Real Capital Analytics. “A lot of distressed stuff is tied up right now and not trading because all of the stakeholders are trying to hold on and prevent a major loss.”

A separate report by Caldera Asset Management focuses on the construction loan sector. The report notes that most apartment construction loans have a three-year term with two one-year extensions built in. Those extensions are increasingly being exercised with each passing month.

But the main reason many construction loans haven’t yet defaulted is the incredibly shrinking LIBOR rate, the benchmark upon which construction loan interest rates are often set. Three years ago, LIBOR was at about 3 percent, but has since fallen to just 0.30 percent. The lower borrowing rate is allowing developers to offset falling NOIs.

This immunity can’t last forever. “If you look at the maturity schedules of construction loans, there’s only so much time that people can delay the inevitable,” says Mike Kelly, president of Greenwood, Colo.-based Caldera Asset Management.

Kelly points to the large amount of units that came online in some distressed markets this year as further proof that a wave of distress is coming. In Phoenix, for example, builders delivered about 5,000 units this year, adding about 2 percent to the existing stock. That doesn’t bode well for a market with a vacancy rate above 12 percent. “There’s not a rent roll increase in Phoenix or Orlando, for instance, that could ever bail out the existing deal,” Kelly says.

But many industry veterans just don’t see a large level of distressed assets hitting the streets next year. Just as lenders are extending loans based on sunny projections, many special servicers are now opting to manage their way through the downturn, trying to stabilize the asset or increase the NOI of an REO and waiting a couple of years before selling.

“I don’t think the wave is coming. I don’t believe that the maturity defaults are nearly as scary as we thought six months ago,” says David Rifkind, principal and managing director of Los Angeles-based George Smith Partners. “If the fundamentals and underwriting are there, we’re seeing extensions granted fairly easily. Those headlines we saw six months ago about the maturity tsunami, that’s all bullshit.”