An Inside Look into the Commercial Real Estate Mess
July 8, 2009
I recently read a interesting article by Joel Ross on Hotel/NewsNow.com entitled The Distressed Debt Conundrum. The article provides an “insider” look into the world of both syndicated and securitzed commercial loans and examines the reason why we have not seen more bankruptcies.
The major reason why we have not seen more bankruptcies is the fact that over the past 16 years loan agreements have incorporated a standard “carve out” provision whereby the borrower becomes personally liable (if he already isn’t) in the case the entity files for bankruptcy.
If the loan has been securitized, the special servicer often purchased the interest only strip (IO tranche) in order to get the servicing. The article points out the extreme conflict of interest between the special servicer who would be foreclosing on his own interest and the AAA bondholders who want a FAST foreclosure or workout in order to recover their value. Similar conflict issues arise in syndicated loans.
As the author points out that, “tranche warfare ensues” in most of these cases. Compounding the problem is the fact that many special servicers are understaffed or have workout personnel that are too inexperienced to work with the battling parties to find an acceptable solution.
Our company can provide both support to the special servicer or work with a distressed owner to workout an existing loan.
To read the entire article, go to The distressed debt conundrum
For more information please contact Scott R. Lodde at (239) 344-7799 X101 slodde@allianceREAMgroup.com
or John McCarthy at (239) 344-7799 X102 jmccarthy@allianceREAMgorup.com
Real Estate Professionals Scott R. Lodde and John M. McCarthy form real estate asset management company
July 7, 2009
Scott R. Lodde and John M. McCarthy announced today that have recently joined forces to form Alliance Real Estate Asset Management Group, LLC (Alliance Group). The company principals have over 60 years of combined experience and provide a wide spectrum of real estate consulting services.
What makes the Alliance Group unique is the experience of its two principals. Mr. Lodde has a background in real estate asset management, development, acquisition, financing, partnership structuring and loan workouts. His property experience includes hotel, multi-family, office, retail, and health care.
Mr. McCarthy experience covers the range of responsibilities in direct property management having spent over eighteen years overseeing the operations of a major resort in Southwest Florida.
The company’s clients are typically property owners and insurance companies. For our Asset Management and Distressed Asset Services we are engaged by real estate developers, lenders, and the investment and legal communities.
For more information please contact Scott R. Lodde at (239) 344-7799 X101 slodde@allianceREAMgroup.com
or John McCarthy at (239) 344-7799 X102 jmccarthy@allianceREAMgroup.com