ATLANTA, GA (May 22, 2012) – Be prepared and be realistic.
That’s the essence of the advice offered to borrowers and lenders dealing with troubled loans in the latest episode of “America’s Commercial Real Estate Show.”
In the episode, show host Michael Bull (top right photo) and his guests take a detailed look at loan workout strategies and the various issues surrounding non-performing loans.
“If you’re a lender, get on [the troubled loan] early,” said Bull, the founder and president of Bull Realty. “Bring in professionals. If you’re a borrower, develop a plan.”
Non-performing loans continue to plague the commercial real estate sector, noted Tom Fink (top left photo), senior vice president for Trepp LLC. Approximately 10 percent of CMBS loans are delinquent, and the total value of such loans is about $60 billion, he said. Furthermore, CMBS loans totaling $120 billion are set to mature over the next two years and roughly half of those are underwater, he added.
Shows guests offered a range of tips for borrowers and lenders saddled with troubled loans.
A lender should “be a Boy Scout: be prepared,” said Mindy Planer, a partner with the Arnall Golden Gregory law firm. “Know what your best recovery is and know what the borrower is going to want.”
Lenders should also be careful about launching lawsuits against troubled borrowers to maximize their recoveries and should instead move quickly to take hold of the non-performing asset, said John A. Christy (middle right photo), a managing partner of the Schreeder, Wheeler & Flint law firm.
“For some reason, [lenders] feel there’s some need to ignore the realities of the financial situation of the borrower … so what they do is defer getting their hands on the real estate and get mired in these counter-claims and endless litigation that puts off the inevitable,” he added.
“That’s a good point: with some of these borrowers, there’s so many people chasing them anyway, it’s like a worthless cause,” Bull added.
Guests said borrowers should take the time to understand the motivations and capabilities of their lenders. “Sometimes banks are under a consent decree or something that actually prevents them from doing certain actions,” said Joe Briner (middle left photo), a partner with GGG Partners, a corporate turnaround firm. “So being aware and building that into the process of negotiating is an important aspect of getting loans worked out successfully.”
Michael Bull will also speak on loan workout strategies at the Information Management Network’s upcoming Southeast Bank/Financial Institutions Forum on Special Assets and Real Estate Workouts on June 28-29 at the Hyatt Regency in Atlanta.
The next “Commercial Real Estate Show” will be available May 24 and will feature interviews from the International Council of Shopping Centers’ annual RECon trade show and convention in Las Vegas.
Public Relations Contact:
Tony Wilbert
Wilbert News Strategies
404-965-5022
Stephen Ursery
Wilbert News Strategies
E-mail: sursery@wnspr.com
Office: (404) 965-5026
Cell: (404) 405-2354
No comments:
Post a Comment