Archive for July, 2010
Restructurings Remain Active
Jul 27th
As the market continues to evolve, it appears the only remaining business activity is restructurings. Some things are starting to thaw in the leasing and occupancy rates across the country. Rental rates in multifamily retail are starting to creep up while office rates are stabilizing in different markets nationwide. More >
Bridging the Bid Ask spread in Difficult Times
Jul 21st
A common scenario in today’s real estate landscape is the following situation:
- A property has lost a significant part of its value due to market conditions.
- The borrower is in violation of their loan covenants and is in default
- The Lender has its own financial problems
- The Owner is out of money, ideas and alternatives
- The property is in receivership; forclosure is looming
- A sale at market value can’t produce enough proceeds to solve anyone’s problem
- Ownership is concerned over personal guarantees
- Negotiations between parties are futile and fustrating
Sound familiar? More >
CMBS Servicing Definitions
Jul 16th
With so much current interest in CMBS debt and dealing with servicers to workout or buy troubled loans and foreclosed properties, it is useful to understand the roles of the various servicers for these loans after they have been securitized. As you will see from the following descriptions, the Special Servicers and the Directing Certificateholders (or B-Piece Buyers) have the most immediate control over the foreclosure and subsequent sale processes. More >
Restructuring Process Slows as More Distressed Properties Enter Special Servicing
Jul 8th
Lenders and servicers continue to be inundated with properties entering special servicing, expanding from multi-family housing to office, retail and other commercial assets. As we originally anticipated, 2012 will be the major year for defaults in commercial properties, especially office properties throughout the United States. Momentum has slowed as servicers are bogged with the influx of properties.
As a result, we’re witnessing slowdowns in the workout process. A negotiation that would take three to four months is now taking five to seven months to get the same response because of the backlog. We also find that borrowers are hiring more professional workout advisers like ourselves to handle these accounts for them because they realize that representing themselves in front of a lender puts them at a great disadvantage. They find that their attorneys can’t have the communications early on with their lender that typically need to take place, usually only speaking with the lender’s counsel which automatically turns the process toward litigation instead of a resolution. More >
Record Vacancy Rates Keep the Heat on Las Vegas Rental Rates
Jul 1st
In Las Vegas, the all-time high vacancy rate has been relentless in putting pressure on asking rents, which accelerated downward on an annualized basis for the fifth consecutive year. The question plaguing the Las Vegas Valley is: when is it our turn? Just as it has been doing for two years, Las Vegas’ commercial markets continue to let out slack, a phenomenon witnessed during the first quarter of 2010 as negative net absorption and price declines were reported throughout all sectors. The residential and commercial real estate sector for 2009 showed an increase in the volume of completed transactions but a reduction in the transaction amount. More >
