Commercial Mortgage Consulting Services

Commercial real estate owners and lenders are facing a complex set of circumstances that are creating stress in even the most conservatively underwritten real estate investment. The current economic conditions are challenging all areas of commercial real estate property management and lending compared to the peak years of 2006-2007. These conditions include:

• declining rental rates
• increased tenant defaults
• increased rent concessions and credit losses
• reduced leasing activity
• reduced sales activity
• reduced property values
• reduced number of active lenders

The effects of these trends on commercial real estate include:

• Reduced property value
• Increased loan-to-value ratio
• Reduced ability to service the existing debt
• Reduced ability to secure new financing as existing loans mature
• These trends are occurring in all property types: multi-family, retail, office, industrial, and hospitality.

Asset Management and Disposition Plans

Asset Management and Disposition Plans enable clients to develop short-term and long-term strategies for assets under management.

Loan Workouts

Loan Workouts are short-term changes in loan terms to enable borrowers to recover from declines in property cash flow and maintain current loan payments

• Requires the borrower to provide a business/management plan to establish a timeline and to identify specific actions needed to achieve a successful resolution

Loan Modifications

Loan Modifications are long-term changes in loan terms to address changes in the collateral, guarantors, or both which may adversely impact the existing loan status

• The result of a loan modification is a new performing loan with possible changes of guarantors, loan amount, interest rate, loan term, etc.

Robert T. Gibney & Associates has assembled a team of seasoned professionals with the experience to review, analyze, and restructure commercial real estate loans:

The consulting report provides clients with accurate third-party data that is critical to making an informed investment decision.

Objectives/Benefits

• Foster cooperation between lender and property owner
• Preserve collateral value for lender
• Develop exit strategy to payoff the existing loan
• Preserve equity value for property owner
• Maintain continuity of ownership and property management when needed to maintain property value
• Develop an asset management plan to avoid property deterioration, maximize cash flow until the local market recovers
• Develop a disposition plan to sell the property or to refinance the existing loan

Strategy

• Meet and confer with all parties to determine their primary goals and objectives
• Obtain and analyze customized property management reports that are designed to show trends over time – occupancy, net rental income, operating expenses, capital expenses, net cash flow
• Legal review of all critical documents related to the existing loan (note, deed of trust, entity documents, and third party reports, etc)
• Prepare cash-flow underwriting analysis reports based on the historical data – at time of property acquisition, interim, and current
• Compare the performance of the subject property to similar properties in the sub-market based on historical data over the term of the loan
• Obtain analysis and advice from each applicable area of expertise
• Develop a comprehensive asset management and disposition plan that meets the needs of the lender, while protecting the owner’s equity position
• The consulting team will present its findings to the lender, borrower/guarantor, and investment partners in order to achieve the results that are mutually beneficial to all parties.

Experience

• 30 years of experience in the Arizona real estate market
• Licensed mortgage broker - $250,000,000 funded since January 2002
• Private capital lender
• Licensed real estate broker
• Director and past president of the Arizona Commercial Mortgage Lenders Association
• Resolution Trust Corporation asset manager