If recent announcements made by brokerage offices are a harbinger of things to come, we may soon see bankers and note holders begin to take over commercial real estate assets.
Brokers of all scale are restructuring to help lenders as well as government agencies disperse the distressed commercial property on their books. In 2008, Los Angeles-based CB Richard Ellis (CBRE) announced the launch of a restructuring services group; New York-based Cushman and Wakefield launched a resolution group; Irvine, Calif.-based Sperry Van Ness hired a distressed assets expert; and Adache Real Estate, a sales and marketing firm in Ft. Lauderdale, Fla., established a bulk sales division.
The timing of these announcements wasn’t a coincidence. “Some of the banks are very aggressive with foreclosing projects right now,” says Adam Adache, president of Adache Real Estate.
Many note holders—specifically those who bought from the originator—will want to quickly work through these assets, says Keith Misner, executive managing director of CBRE’s multifamily group. “If it is a special servicer, they have to follow a roadmap in the documents,” Misner says. “[Eventually] they have to hire a third-party person to sell it and value it. That’s where we come in.”
With traditional sales methods slowing, brokers consider the management of these assets a growth area. “CBRE has been in the restructuring space for years,” says Spencer Levy, managing director for the company.
Adache’s approach is a bit different—instead of going to note holders to help value and distribute assets, the firm is working with the flood of potential buyers moving into South Florida in search of bulk purchases ranging from five units to 7,500 units. Now, Adache says, “some of the bankers we’ve worked with along the way are also saying they have these projects that are in trouble.”