Clearwater, FL (Vocus) August 22, 2010
As the “new” commercial real estate economy continues to trudge forward on its hopeful path to recovery, proof of a new way of doing business is evidenced by reports which show that the total workout activity (loan modification) for distressed commercial real estate loans during the first half of 2010 reached .2 billion. That is an increase of billion of restructuring activity over the .2 billion for the first half 2009.
Ira J. Friedman, Chief Operating Officer for Guardian Solutions, a commercial loan modification firm based in Florida, said “What we are seeing on the part of lenders and special servicers is an increased openness to address the restructuring of CMBS loans when presented with professionally crafted proposals. Due to the ongoing deterioration of the market, and because of our regular dealings with lenders and special servicers, we are now more able to quickly move through the process of commercial loan restructuring.”
The continued stabilization of the real estate market has become increasingly dependent on the re-pricing and deleveraging of property positions, the Real Estate Research Corporation (RERC) reported recently.
Broader issues such as limited gross domestic product growth, continued high unemployment rates, and the likelihood of new federal regulations will force the market to further evaluate the long-standing formulas and assumptions they have traditionally used to price commercial real estate. The special servicers, who handle (CMBS) commercial properties in or facing default, have similarly, had to reevaluate their usual way of transacting with distressed properties that come into their hands.
Major challenges lay ahead for commercial real estate, including the uncertainty related to the use of valuations such as cap rates and comps; the manner in which these metrics are employed, directly affect the outcome of proposed commercial loan restructures and subsequently will influence a market recovery.
“The types of mortgage restructuring we are seeing get approved include both term extensions and mortgage discounted buyouts, added Friedman…while we obviously take into account the needs of the property owner, we clearly address the concerns of the special servicers in order to get these deals completed—it has to be a win-win result..”
Because of the changing landscape of commercial real estate and other factors that have evolved in the capital markets over the past several years, the approach to analyzing, investing, managing and restructuring loans for commercial properties will also need to evolve beyond the status quo of previous years.
For commercial loans from 2006-2008, the lax underwriting standards of that time period, lack of amortization, low capitalization rates, the disastrous domino effect of the weakened economy and reduced market liquidity will all probably to lead to higher loss severities.
The commercial loan modification process is very selective, with some banks, lenders and special servicers electing to take back properties, sell them at a loss and take them off their balance sheets. But other properties which meet the new criteria for loan restructuring, and are represented with the submission of compelling workout proposals, will be modified and kept on the books.
“Property owners are increasingly experiencing the fallout of this damaged economy and are faced with two options: holding onto a non-performing asset or foreclosure. Guardian Solutions is able help commercial property owners restructure their loans by first properly evaluating an owner’s asset performance and market potential. Based on that information and other analytical data we compile, and our first-hand experience getting these modifications completed, we create a comprehensive restructuring proposal,” concluded Friedman.
About Guardian Solutions
Guardian Solutions is the one of nation’s largest commercial loan restructuring companies and is committed to helping commercial property owners save their properties. The company’s knowledgeable mitigators are experienced in a variety of disciplines to provide customized restructuring solutions. For more information, visit www.GuardianSolutions.org
Contact:
Jamie Sene
Vice President, Marketing
Guardian Solutions
727-442-8833
jvs(at)guardiansolutions(dot)org
www.GuardianSolutions.org
###
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The New Commercial Real Estate Economy is Here
September 30th, 2010 by Bank Loan | No Comments | Filed in LoansClearwater, FL (Vocus) August 22, 2010
As the “new” commercial real estate economy continues to trudge forward on its hopeful path to recovery, proof of a new way of doing business is evidenced by reports which show that the total workout activity (loan modification) for distressed commercial real estate loans during the first half of 2010 reached .2 billion. That is an increase of billion of restructuring activity over the .2 billion for the first half 2009.
Ira J. Friedman, Chief Operating Officer for Guardian Solutions, a commercial loan modification firm based in Florida, said “What we are seeing on the part of lenders and special servicers is an increased openness to address the restructuring of CMBS loans when presented with professionally crafted proposals. Due to the ongoing deterioration of the market, and because of our regular dealings with lenders and special servicers, we are now more able to quickly move through the process of commercial loan restructuring.”
The continued stabilization of the real estate market has become increasingly dependent on the re-pricing and deleveraging of property positions, the Real Estate Research Corporation (RERC) reported recently.
Broader issues such as limited gross domestic product growth, continued high unemployment rates, and the likelihood of new federal regulations will force the market to further evaluate the long-standing formulas and assumptions they have traditionally used to price commercial real estate. The special servicers, who handle (CMBS) commercial properties in or facing default, have similarly, had to reevaluate their usual way of transacting with distressed properties that come into their hands.
Major challenges lay ahead for commercial real estate, including the uncertainty related to the use of valuations such as cap rates and comps; the manner in which these metrics are employed, directly affect the outcome of proposed commercial loan restructures and subsequently will influence a market recovery.
“The types of mortgage restructuring we are seeing get approved include both term extensions and mortgage discounted buyouts, added Friedman…while we obviously take into account the needs of the property owner, we clearly address the concerns of the special servicers in order to get these deals completed—it has to be a win-win result..”
Because of the changing landscape of commercial real estate and other factors that have evolved in the capital markets over the past several years, the approach to analyzing, investing, managing and restructuring loans for commercial properties will also need to evolve beyond the status quo of previous years.
For commercial loans from 2006-2008, the lax underwriting standards of that time period, lack of amortization, low capitalization rates, the disastrous domino effect of the weakened economy and reduced market liquidity will all probably to lead to higher loss severities.
The commercial loan modification process is very selective, with some banks, lenders and special servicers electing to take back properties, sell them at a loss and take them off their balance sheets. But other properties which meet the new criteria for loan restructuring, and are represented with the submission of compelling workout proposals, will be modified and kept on the books.
“Property owners are increasingly experiencing the fallout of this damaged economy and are faced with two options: holding onto a non-performing asset or foreclosure. Guardian Solutions is able help commercial property owners restructure their loans by first properly evaluating an owner’s asset performance and market potential. Based on that information and other analytical data we compile, and our first-hand experience getting these modifications completed, we create a comprehensive restructuring proposal,” concluded Friedman.
About Guardian Solutions
Guardian Solutions is the one of nation’s largest commercial loan restructuring companies and is committed to helping commercial property owners save their properties. The company’s knowledgeable mitigators are experienced in a variety of disciplines to provide customized restructuring solutions. For more information, visit www.GuardianSolutions.org
Contact:
Jamie Sene
Vice President, Marketing
Guardian Solutions
727-442-8833
jvs(at)guardiansolutions(dot)org
www.GuardianSolutions.org
###
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