How to Fix a (Really) Troubled Asset via GlobeSt

As sure as the winter snow finally has finally arrived, it’s clear that the commercial real estate market will soon be hit again this year by a gale force of mortgage delinquencies--and the representatives for both sides will continue to learn more tricks to bringing property back from the dead.

The past couple of years have brought more workouts than expected, though these deals to keep a site afloat between borrower and lender are typically more for the better class A and B properties. It’s not going to get easier, however, as Trepp estimates there will be about $350 billion in bad loans maturing in the United States each year for the next three to five years. Worst hit will be the older, more troubled assets, which present much trickier challenges to work out.

Asset managers, including the down-and-dirty types who represent the borrower on each property and the managers who represent the lenders, agree that there are three mantras, the three “Be”s that both sides should remember when trying to fix an underwater asset: Be quick, be prepared and be smart.

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