 | | Castles, gold mines, decommissioned missile silos and entire brands like Polaroid and Tommy Bahama’s. Hilco Real Estate Senior Vice President Steve Madura, whose firm specializes in distressed assets, has sold it all, but soon he expects an onslaught of a much more common type of property: CRE. “The process is the process, and it works for any asset class,” Madura said. And increasingly, he sees this process put to work for commercial real estate. The next couple of years, when roughly $500B in commercial mortgage loans will require repayment or refinance, per the Mortgage Bankers Association, will “dwarf the 2008 financial collapse,” Madura said. Refinancing with rising rates will lead to “a reckoning,” with borrowers in a “world of hurt,” and whereas the financial mess of 2008-2009 was caused by bad decisions around the financing of needed assets like single-family homes, the question about the long-term utilization of certain commercial real estate assets may lead to more trouble. Experts in distressed assets see this moment as an inflection point, and one likely to lead to high demand for their services throughout 2023. The combination of rising interest rates and a basically frozen capital market, coming after a period of low interest rates, has created what Madura calls a “distress bubble” that will impact CMBS, private lenders, private equity and eventually main street. “Distress is becoming apparent much sooner in the process,” he said. Andy Graiser, co-president of A&G Real Estate Partners, a real estate specialist that, among other things helps renegotiate or terminate leases, or find subtenants, has tracked the same market slowdown. Obtaining financing and closing deals has become much harder, he said. “Lenders are being a lot more aggressive with their… Read Full Story |
