Posts tagged Distressed Real Estate
Over the past 60 days, NAI Global’s alliance partner for outcry auctions, Higgenbotham Auctioneers, has sold more than 90 properties at auction in Florida, Georgia, Louisiana, Texas, Delaware and throughout a number of Midwest states. In addition, they have scores of upcoming auctions scheduled before year end in Florida, Michigan, New Jersey, Illinois, Texas, South Carolina, and Georgia. More >
Online Auction Platforms such as AuctionPoint offer Agents and Sellers a Step Up from Traditional Brokerage
During the summer, NAI Global launched a program enabling NAI Agents to conduct their own online branded auctions with the help of a preferred vendor partner, AuctionPoint. More >
In just two weeks we’ve seen some major changes in the distressed asset marketplace. Not only is activity increasing as the year goes on, but where we once found the number of assets far outweighing the number of willing investors, we’re now finding more investors per property than ever before. More >
Open the Wednesday real estate section of The Wall Street Journal or an email communication from one of the major real estate business journals and you can’t miss seeing that dozens of commercial real estate auctions occurring weekly throughout the United States. More >
Loan sales represent a large volume of the distressed asset transactions that have been closing so far in 2010. Lenders and special servicers’ decisions to hold or sell specific loans are generally based on a net present value (NPV) analysis of each asset. This critical analysis accounts for the respective costs to the lender if the loan is held or acquired as REO; the capital required to then stabilize and manage the asset; and the time required to foreclose (in some states, this can be longer than a year). With certain markets and asset values of some property types continuing to deteriorate, the conclusion is often that a loan sale makes more sense to the lender than a hold. More >
NAI Global is very active in helping banks sell distressed assets. Most observers would agree in the last 20 years United States banks have become more complex. Lines of business have grown; transactions have become increasingly complex with multiple borrowers with divergent interests; multi-tiered loan structures became common and crafty lawyer inspired special provisions are sprinkled in here and there. During the same time period, however, commercial real estate transactions have also become far more complex. The complexity of transactions is a significant management problem in and of itself. Information overload often forces bright, hard working bank employees to make mistakes just because the time or experience is not available to fully understand the details of a transaction. More >
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 >
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 >
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 >
The number of hotels that are “underwater” financially is substantial and growing. The challenges of today’s economic and capital market conditions has brought even solid, experienced operators to their knees. So when looking at investing in a hotel deal today, should you recapitalize the current owner or acquire the property and start over?
For starters, it’s helpful to analyze the subject hotel in comparison to its competitors. If the property is maintaining its relative pre-down-cycle position with its competitive set, you might conclude that the problem is less likely due to the operator. By interviewing ownership and key employees, reviewing property records such as quality scores and operating statements and physically inspecting the property, an experienced investor can come to a reasonable conclusion about whether or not to consider recapitalizing a current owner. More >