Loan Restructuring – A Sign Of Hope In A Dismal Commercial Real Estate Industry Forecast

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The commercial real estate market faces a dismal forecast for the next several years. Nationally, 2010 looks like an unstoppable cataclysm of foreclosures and short sales for a great number of borrowers, investors, and lenders.

…unemployment could continue to rise before subsiding

Although the U.S. economy appears to be showing preliminary signs of recovery with the stabilization of some large financial institutions, the commercial real estate market continues to be negatively affected by the ongoing decline of home prices, the high rate of commercial loan defaults and an unmoving high unemployment rate. Treasury Secretary Timothy Geithner recently darkened this scenario by warning that “…unemployment could continue to rise before subsiding”.

Jeramie P. Concklin, CEO of Guardian Solutions, a commercial loan restructuring firm based in Florida had this to say, “The rate of growth of delinquencies in commercial mortgage-backed securities (CMBS) real estate loans did show some slight signs of moderating in July, but despite that, we are still seeing very high numbers of new distressed commercial mortgages in need of restructuring every week as evidenced by CMBS delinquencies surpassing 60 billion dollars, an increase of 3.11 billion from just the month prior.”

A bright spot in this gloomy scenario is surfacing due to the efforts of independent commercial loan restructuring firms such as Guardian Solutions. According to Trepp, a leading provider of CMBS and commercial mortgage data and analytics, a recent trend has emerged that is having a positive effect on CMBS loans due to the increase in loan modifications by lenders. Loan modifications through July of this year already have surpassed those for all of 2008 and 2009 combined. “Loan modifications (have) accelerated dramatically in 2010,” the Trepp report said. “This puts downward pressure on the delinquency number, as troubled loans get resolved and move from the delinquency category.

“Based on the successful commercial loan workout results we’ve been getting for our clients, I can see that the biggest mistake that property owners tend to make is to do delay addressing the issue at the first sign of trouble, or even worse, to try to deal with lenders or special servicers on their own. But that being said, commercial property owners should know that they can take steps to improve their situation by seeking professional help and guidance while the situation is still salvageable; the longer they wait to act, the more difficult their situation becomes,” added Concklin.

Commercial property owners who are trying to keep their properties viable are seeking help from firms like Guardian Solutions that specialize exclusively in commercial loan modification. Currently, there are only a handful of specialized firms that hire highly qualified employees, such as accountants, MBAs and real estate professionals to deal specifically with the complexities involved in a restructuring a securitized commercial property.

“Guardian Solutions helps commercial real estate owners in distress every day,” said Concklin. “We are saving all types of commercial properties facing default. But the sooner we get into negotiations, the more options we have available to help. A restructuring plan that’s put in place early on usually contains the most favorable terms and achieves the best results. With the dismal forecasts we have for the economy and for the commercial real estate market, it’s the wise property owners who are taking a look at their assets and preparing now for the eventual market declines.”

The technical and legal aspects involved with securing a commercial loan restructure prompts many property owners to ignore their position and grudgingly accept foreclosure rather than save their investment. This can result in more than just losing the property, it can severely damage the borrower’s credit and even lead to personal bankruptcy.

About Guardian Solutions
Guardian Solutions is the one of nation’s largest commercial loan restructuring companies and is committed to helping commercial property owners save their properties. The company’s knowledgeable mitigators are experienced in a variety of disciplines to provide customized restructuring solutions. For more information, visit

Jamie Sene
Vice President, Marketing
Guardian Solutions


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