November 2023

2A — November 2023 — M id A tlantic Real Estate Journal

M id A tlantic Real Estate Journal

M id A tlantic R eal E state J ournal Publisher, Conference Producer ..............Linda Christman VP, Conference Producer .............................Lea Christman Editor/Graphic Artist ......................................Karen Vachon Contributing Columnists ..Dwight Kay, Kay Properties and Investments Mid Atlantic R eal E state J ournal ~ Published Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 117 HMS Halsted Dr., Hingham, MA 02043 USPS #22-358 | Vol. 35, Issue 11 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900

Dwight Kay

Another Reason to Stay Debt Free in a 1031 DST Exchange

t seems like everyday there is another reason showcasing the reason why more and more investors are choosing to stay debt-free when investing in Delaware Statutory Trust (DST) proper- ties in a 1031 exchange. Headlines Show Dangers Surrounding Leveraged Real Estate Just look at any business or real estate-related publication, and you will see the headlines are full of examples of real es- tate firms that have been forced to relinquish assets because they succumbed to the lurking liabilities of leverage. In many cases, these firms were led by highly skilled executives with years of experience and files of successful transactions. How- ever, even these world-class real estate firms are creating a case for staying debt-free. Here are just a couple of ex- amples in the news to illustrate the point: • Recently, one large firm was forced to give a large of- I

fice campus in the Southwest back to lenders after the pri- vate investment firm stopped making the payments on its roughly $300 million loan on the office campus 1 . • One of the nation’s larg - est real estate investment firms located in the Midwest is struggling with the bitter taste of lender foreclosure after its bank filed a roughly $100 mil - lion foreclosure lawsuit against the real estate firm over a recent investment gone awry 2 . • After failing to repay its loan on a class B complex in the South, an international invest- ment firm was forced to turn the asset over to the lender 3 . • One global real estate firm recently handed back a

large East Coast building to its lender after the building’s anchor tenant left the building 4 . • Fannie Mae recently an - nounced it was prepping for possible losses in the multifam- ily housing sector as lenders anticipate loan losses from developers and private equity players who used heavy lever- age within the multifamily housing sector 5 . • In the hotel sector, a promi - nent New York City hotel devel- oper is facing foreclosure after failing to repay a mezzanine loan to a private equity group 6 . • An upstate New York lender recently announced it was going to move forward with foreclosure proceedings continued on page 26A

Firmly Rooted in the Law and in the Community We are well grounded in every facet of real estate law, from acquisition to construction. We are committed to serving the needs of our clients and our communities.

Contact: NEIL A. STEIN • 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2469 • Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart Attorneys at Law

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