Presented by: James D. Zupancic, Esq., CRE with special thanks to:
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HOW CAN CRE’S ADD VALUE? OPPORTUNITIES & PITFALLS WITH DISTRESSED ASSETS 2010 CRE MID-YEAR CONFERENCE SEATTLE, WA MAY 25, 2010 1 Presented by: James D. Zupancic, Esq., CRE with special thanks to: Brian A. Glanville, CRE, FRICS, MAI Integra Realty Resources
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How Can cre’S add value? Opportunities & Pitfalls With Distressed Assets 2010 CRE Mid-Year Conference Seattle, wa May 25, 2010. Presented by: James D. Zupancic, Esq., CRE with special thanks to: Brian A. Glanville, CRE, FRICS, MAI Integra Realty Resources. No Market - PowerPoint PPT Presentation
Transcript of Presented by: James D. Zupancic, Esq., CRE with special thanks to:
HOW CAN CRE’S ADD VALUE?OPPORTUNITIES & PITFALLS WITH
DISTRESSED ASSETS 2010
CRE MID-YEAR CONFERENCESEATTLE, WAMAY 25, 2010
1
Presented by:James D. Zupancic, Esq.,
CREwith special thanks to:Brian A. Glanville, CRE,
FRICS, MAIIntegra Realty Resources
BORROWER/OWNER ISSUES
No MarketNo Financing/Difficult Financing
Seriously Depressed Values
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BORROWER SOLUTIONS
Negotiate with Lender• Extend & Pretend
Chapter 11 StallBank Borrower Partnerships
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4
RESIDENTIAL TSUNAMI
Warning Signs
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FORCE LOCATIONPhoenixLas VegasFloridaSan DiegoBend
6
RECESSIONS SINCE WWII
Percent Job Losses and Number of Months after Peak
HOUSING PRICES SINCE WW II
Housing prices spiked between 2000 and 2007.
COMMERCIAL/INDUSTRIAL TSUNAMI
Warning Signs
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MULTI-FAMILY Condos Apartments Inventory First Time Homebuyer Exodus (Incentives) Consolidation of Households Concessions Cap Rates
LAND Underdeveloped or Unsold Lots Huge Discounts
10
REAL CAPITAL ANALYTICS
REAL CAPITAL ANALYTICS
REAL CAPITAL ANALYTICS
COMMERCIAL PROPERTIES IN THE RECESSION
Commercial properties have also been profoundly impacted by the recession, as shown by Moody’s REAL Commercial Property Index and NCREIF’s Property Index.
MOODY’S REAL PROPERTY INDEX
NCREIF PROPERTY INDEX
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WARNING SIGNSBusiness Closures + Job Losses = Less
SpaceFree Rent/ConcessionsVacancy Rates Values ≤ DebtMaturities ApproachingWatch for Property Tax Appeal
Opportunities
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3 Kinds Of People:Watch Things HappenMake Things HappenSay “What Happened?”
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Investors:Know Your Market (Broker)Extreme Due Diligence
(Legal/Accounting)
Latent DefectsStructuralTitle/LiensLitigation/Bankruptcy
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Lenders:Title/LiensAdvertisement & Sale
vsJudicial Foreclosure
EvictionsBecome Developers State
Registration?
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NEW WORLD OF FINANCING
Lenders:Greater Regulatory OversightLower LTV’sReal Cash-In/EquityUnderwriting Scrutiny
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THINK “AS IF” YOU ARE THE LENDER
REO Portfolios Swelling Foreclosures/Deeds-In-Lieu/Developers Regulators Classifying Assets/Impairs
Balance Sheet Federal Reserve Projects 500+ Bank Failures
in 2010 How to Stay Off the Front Page?
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Borrowers/Tenants:Some LeverageWhat Do They Bring?Banks/Owners Do Not Want
PropertyAct Professionally/Act PromptlyDeals Can Be Made
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TOMORROW….
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