10A — November 13 - 26, 2015 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest By David Goldfisher, The Henley Group Mid-Atlantic coastal warehouse owner wins property from servicer
A Lesson in CMBS Persistence – An Owner recently re-
stabilize the asset. The Owner’s property was sent to Special Servicing in early 2011 without much of a lifeline. The property went from 100% occupied to 100% vacant when a well-known, single tenant user unexpect- edly vacated the complex. The Borrower was saddled with a property that needed tenants and additional capital for TI allowances but had negative cash flow. All the Right Moves: 1. The Borrower was trans- parent about the limited per- sonal funds she had to pledge
towards the deal but was willing to contribute capital through the sale of a different asset. The show of good faith and personal commitment to the property, no doubt opened the door to negotiations with the Servicer. 2. The Borrower worked tirelessly in 2012, 2013 and 2014 to creatively tenant and slowly re-establish the value of the warehouse complex. Often taking discounted rents from tenants in exchange for the tenants doing their own TI work. 3.The Borrower turned over
cash flow as available and stayed connected to the Ser- vicer over the four-year span. 4. The Borrower hired a tenacious mortgage banker who pursued 25 + financing sources to refinance the Bor- rower’s debt but was denied adequate financing to pay-off the Servicer. 5. When negotiations with the Servicer came to a stand still and with no take-out financing in place, the Mort- gage Banker introduced the Borrower to a seasoned CMBS Workout Team to reinvigorate Loan Payoff discussions with
the Servicer. 6. Together with the Owner and Mortgage Banker, the CMBS Workout Team created a financial model substan- tiating the Property’s value at par, despite the Servicer’s belief that the property may yield a higher value through a note sale. 7. The CMBS Workout team eliminated significant de- fault interest, late fees and penalties that had accrued in prior years when the Prop- erty struggled. The mortgage banker was then able to secure adequate financing. 8. While the Loan pay-off proposal was on the lower end of the Servicer’s value range, the Lender accepted the Owner’s bid due to the deal momentum and strong traction the team had gained with the asset manager. 9. The Servicer was paid off in September of 2015. The Owner is managing the prop- erty to a cash flow positive, comfortably servicing the new loan and is now able to capital- ize on further upside potential. David Goldfisher is a well-respected Servicer Negotiator working on behalf of Borrowers. He is a principal of The Henley Group, Inc., a boutique consultancy that provides workout advi sory for CMBS loans. n Onyx Equities’ Schultz joins CREFC’s Board of Governors WOODBRIDGE, NJ — Onyx Equities, LLC an- nounced that co-founder and managing principal Jona- than Schultz has been named co-chair of the High Yield Distressed Realty Assets Sub- Forum for Commercial Real Estate Finance Council (CREFC) through June 2016. With this appointment, Schul- tz also joins CREFC’s Board of Governors. The CREFC is a global trade association for the commercial real estate finance industry; members include lenders, investors and servicers. The council acts as a legislative and regulatory advocate for the industry, plays a vital role in setting market stan- dards and provides education for market participants in this key sector of the global economy. n
tained her 3 7 0 , 0 0 0 square foot war ehous e distribution complex af- ter being in default for f our year s with the Spe-
David Goldfisher
cial Servicer. The Borrower made a few critical decisions that kept the Servicer from quickly foreclosing and al- lowed the Borrower time to
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