1 Presented by: James D. Zupancic, Esq., CRE with special thanks to: Brian A. Glanville, CRE, FRICS, MAI Integra Realty Resources No Market No Financing/Difficult Financing Seriously Depressed Values 2 Negotiate with Lender Extend & Pretend Chapter 11 Stall Bank Borrower Partnerships 3 4 Warning Signs 5 FORCELOCATION Phoenix Las Vegas Florida San Diego Bend 6 Percent Job Losses and Number of Months after Peak Housing prices spiked between 2000 and 2007. Warning Signs 9 MULTI-FAMILY CondosApartmentsInventory First Time Homebuyer Exodus (Incentives) Consolidation of Households Concessions Cap Rates LAND Underdeveloped or Unsold Lots Huge Discounts 10 Commercial properties have also been profoundly impacted by the recession, as shown by Moodys REAL Commercial Property Index and NCREIFs Property Index. 17 WARNING SIGNS Business Closures + Job Losses = Less Space Free Rent/Concessions Vacancy Rates Values Debt Maturities Approaching Watch for Property Tax Appeal Opportunities 18 19 3 Kinds Of People: Watch Things Happen Make Things Happen Say What Happened? 20 Investors: Know Your Market (Broker) Extreme Due Diligence (Legal/Accounting) Latent Defects Structural Title/Liens Litigation/Bankruptcy 21 Lenders: Title/Liens Advertisement & Sale vs Judicial Foreclosure Evictions Become Developers State Registration? 22 Lenders: Greater Regulatory Oversight Lower LTVs Real Cash-In/Equity Underwriting Scrutiny 23 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? 24 Borrowers/Tenants: Some Leverage What Do They Bring? Banks/Owners Do Not Want Property Act Professionally/Act Promptly Deals Can Be Made 25 26
