This sale highlights all the reasons why commercial real estate lenders are prepared to make deals.
Woodland Hills, California (PRWEB) November 21, 2011
Strategic Asset Solutions/Peak Asset Solutions (http://www.strategicworkouts.com) was recently successful in negotiating a short sale of an office building in North Hollywood, California. According to Executive Vice President, Kevin Levine, "This sale highlights all the reasons why commercial real estate lenders are prepared to make deals." He continued, "We worked on this transaction for about eighteen months. The borrower's business was declining and it was unable to make its loan payments; and real estate market conditions in the area were deteriorating as well. The lender was faced with having to repossess the building and sell it at a price significantly less than its loan balance."
Strategic Asset Solutions/Peak Asset Solutions had first attempted to negotiate a loan modification, reducing the borrower's monthly payments. But the borrower's worsening financial situation precluded it from performing effectively even under the modified loan terms. "If the lender doesn't perceive that the loan modification will enable the borrower to meet its debt service obligations," said Levine, "it will be better off foreclosing and gaining control of the property. Lenders don't enter into loan modifications out of habit or solely to accommodate borrowers in the short run. A lender must be convinced that a proposed loan modification will produce an end result at least equal to what the lender will realize upon foreclosure. This can only be done by providing the lender with a quantified plan showing a concrete improvement in the overall status of the loan within a relatively short period of time."
"When we saw that a loan modification would not benefit either the borrower or the lender, we switched to the short sale alternative," explained Levine. "The lender was willing to consider a short sale once we had provided a thorough property analysis convincing them of the property's low value. Ultimately, the lender accepted a sale price that realized approximately fifty percent of its loan balance."
Levine commented that if there had been a strong guarantor, the lender would have been much less willing to approve a short sale resulting in a fify percent loss. However, the guarantor of this loan was insolvent so the lender could not look to the guaranty as a source of recovery, Levine added. Once the lender accurately perceived its true circumstances, it responded very quickly to the short sale offer and the transaction closed in just two weeks.
Strategic Asset Solutions/Peak Asset Solutions offers commercial loan modifications and short sale services in California and throughout the country. The company's personnel bring extensive commercial real estate expertise to each assignment, including market analysis, valuation, legal and negotiation experience. Each borrower's unique lending situation is fully-analyzed, and the borrower is assisted in preparing current operating reports and projections. Strategic Asset Solutions/Peak Asset Solutions then drafts and submits a loan modification proposal to the lender. That proposal may include a principal reduction, interest rate reduction, and waiver of penalty charges. In those instances where a loan modification will not work to the mutual benefit of the borrower and lender, Strategic Asset Solutions/Peak Asset Solutions will attempt to broker a short sale of the commercial real estate at a significant discount from the loan balance, or will seek to negotiate a sale of the note to a third party.
Strategic Asset Solutions/Peak Asset Solutions is one of the entities in the Peak Corporate Network headquartered in Woodland Hills, California. In addition to commercial loan modifications, the Peak Corporate Network entities offer mortgage lending, loan servicing, residential short sale services, 1031 exchange, trustee work, foreclosure services, real estate brokerage and escrow services. For more information, visit http://www.peakcorp.com
The Peak Corporate Network is not a business entity; the brand represents a group of related separate legal entities, each providing its unique set of real estate services.