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18C — September 30 - October 13, 2016 — Fall Preview — M id A tlantic
Real Estate Journal
CMBS L oans
By David Goldfisher, The Henley Group LNR extends lifeline to vacant suburban office in Mid Atlantic
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100% vacant. Given that the property’s highest and best use accommodated biomedi- cal users rather than general office users, attracting a sin- gle tenant in an already 60% vacant, industrial complex was an impossible feat. The value of the property had dropped precipitously since the loan was securi- tized and without lender cooperation, the only logical alternative was for the prop- erty to go back to the lender. Borrower’s Response: The borrower’s innate and comprehensive knowledge
of this particular suburban office marketplace including the canvassing of prospec- tive biomedical tenants de- termined that a single user was not on the horizon. A more likely lease up scenario would be to subdivide the space and lease it up over 36 months. The Borrower lever- aged their in-house construc- tion and engineering skills to reconfigure the building into four multi-user tenant spaces. The Borrower com- mitted to infuse capital to facilitate the tenant improve- ments necessary to attract
new tenants as well as pay down the Loan. Lender’s Response: After considering multiple options, the lender agreed with The Henley Group that the best operator for the property was the exist- ing borrower. The Borrower had a strong track record of re-positioning biomedical and industrial office assets in the surrounding markets and was engaged in several tenant negotiations for the subject asset. The lender agreed to forgo foreclosure and to extend the loan and
modify other loan terms al- lowing the borrower to take advantage of the recent leas- ing traction. The Henley Group liaised with both the borrower’s and lender’s counsel throughout the documentation process, neutralizing disruptive deal issues that threatened the closing. David Goldfisher is a principal of The Henley Group, a CMBS Borrower Advocate firm. n Protect your profit margins. . . you have all of the information necessary to make an informed decision. ● A company whose experts have comprehensive knowledge, experience and success in all of the many available energy effi- ciency measures out there. The efficiency gained across multiple electrical and mechanical load categories can amass to sig- nificant cost reduction and you never knowwhichmeasures will be best for your building until the analysis is done. ● A company with extensive experience in identifying and qualifying utility incentives and tax credits and deductions. There is a lot of free money out there and you don’t want to leave any on the table. This company should both adminis- ter the rebate process and ac- cept the incentives directly as partial payment for the project. ● A company that will per- form the installation of their solutions on a design/build, turnkey basis. Ensure the com- pany will handle everything fromA to Z including engineer- ing, equipment purchases, la- bor, waste removal, recycling, permits, etc. You want the project to include everything for one not-to-exceed price. ● A company with the abil- ity to offer multiple financ- ing solutions such as capital leases, traditional third-party financing, and more creative solutions such as utility bill funding options. Preserving your profit mar- gins will always be a struggle, but significantly reducing and controlling your second largest expense category goes a long way and can be made easier by choosing the right partner. Chuck Hurchalla is presi- dent of Evolution Energy Partners. n continued from page 9C
ackstory: The client’s 102,000 s/f suburban office
b u i l d i n g had no ten- ant and the client had no ability to re- finance his m a t u r i n g CMBS loan. The biomed- ical tenant
David Goldfisher
which occupied 100% of the building elected to consoli- date operations into an exist- ing facility and to not renew the lease leaving the property
Mid Atlantic CMBS Loan Serviced by C-III $10,000,000 Industrial Complex Discounted Pay-Off
New England CMBS Loan Serviced by CW Capital $25,500,000 Shopping Center A/B Note (A-Note reduced by 56%)
Mid Atlantic CMBS Loan Serviced by LNR $47,000,000
Mid Atlantic CMBS Loan Serviced by LNR $11,800,000 Retail Avoided Foreclosure and Mitigated Late Fees
Office
Lease Terms & Escrow Release Modification of Tenant’s
* 2016 Notable Engagements $100,000,000 Lifestyle Center in Mid Atlantic $90,000,000 Office & Industrial Portfolio in Mid Atlantic $24,500,000 Limited Service Hotel in Mid Atlantic $55,000,000 Full Service Hotel in Midwest $30,000,000 Anchored Retail Shopping Center in Upstate NY
O: 508-318-6520 | M: 617-320-0284 david@thehenleygroup.com www.thehenleygroup.com David Goldfisher The Henley Group Inc.
Workout Advisory for CMBS Loans
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