Taking advantage of opportunities
in broken projects and debt
in 2012 means a strategy
for winning rather than
playing defense
philosophy of the past. While some lenders continue to modify loans rather than
accept a discounted payoff, those days are
gradually concluding as banks’ balance
sheets firm up.
Although the notion that a rolling
loan gathers no loss has been refuted, the
can still gets kicked in a different way,
says Norman Radow, CEO of the Radco
Cos., an Atlanta-based national real estate
development firm that has managed and
repositioned more than $4 billion of distressed real estate. As the lenders have
brought in receivers or taken charge of
properties directly, without the experience or the internal support to maximize
value for the lender, the can gets kicked
“There are limits to how long a lender
will hold real estate assets on their books
or loans that remain in limbo,” Radow
says, “whether the incentive is regulatory
scrutiny, improved market conditions
with certain asset types, or simply the
time and staff required of lenders to con-
tinue putting out fires and working in
areas outside of their core competency of
lending money.”
Katz says special servicers have been
part of the problem and need to be part
of the solution. With billions of dollars of
assets under the control of special ser-
vicers, he sees the need to rethink how
business is getting done—and get more
proactive in moving assets. Some special
servicers are limited by legal boundaries
while others are limited by valuation
boundaries. Still others are looking for
opportunistic situations within their port-
folios. But Katz says a new paradigm is a
must.
