Commercial Real Estate
by Ted Karsch
| September 24, 2009
The vast majority of companies that facilitate loan modifications in the United States are solely dedicated to helping residential homeowners. It can be difficult for the commercial property owner who needs a commercial loan modification to actually find a company that has experience and knowledge in processing successful commercial loan workouts.
The commercial property owner who is facing the prospect of foreclosure has a few different options when he or she is attempting to modify their loan. For an illustrative example I will use a real life situation of a client of mine in Tampa, Florida. We won’t use their real names for privacy purposes and we will use the fictional name of Blue Harbor Apartments for their property.
Commercial Loan Modification: a Hypothetical
They own a 250 unit apartment building that they purchased for 8.3 million dollars in 2006. In the last year they have seen occupancy drop to 65%. This increase in vacancies has severely hurt their net monthly income. Their monthly rental income is now $92,000.00. Their expenses, including the mortgage payments are $118,000.00 a month. They are currently coming out of pocket over $20,000.00 a month just to hold on to the property. The loan they have is held by a major international bank and is amortized over 25 years at an interest rate of 7.5%. They are in a tough situation because the value of their property on today’s market is approximately 6 million dollars. They are unable to refinance with another lender because they don’t have any equity in the property. The only choice they have is to try to modify the commercial loan.
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Foreclosures
by Ted Karsch
| September 16, 2009
Due to easy, high leverage financing and falling commercial real estate values many apartment building owners are now facing foreclosure. This leaves a lot of opportunity for those apartment building investors who are willing to invest the time and energy into finding a great apartment building investment at a rock bottom price. It can be difficult to find listings of apartment building foreclosures because in many cases they are handed over to commercial Realtors who may not even advertise the apartment building as a foreclosure.
Fortunately, the internet has a large number of websites which feature apartment building foreclosure listings, however, none of these websites is devoted solely to multifamily properties. Therefore it is necessary to visit a number of different websites and do some searching within the websites themselves. Below are some websites where you can begin your search.
Sources for Foreclosed Commercial Real Estate
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As the residential real estate market has seen a massive level of mortgage delinquencies and foreclosures over the past twelve months the commercial real estate market so far has not seen the same kind of fallout. However, this could soon change. In fact, 
Executive summaries are one of the most important aspects of commercial loan package submission, however, many new investors spend the least time and energy on this essential component. I recently had the opportunity to interview Lori McMahon of LJ Commercial Property Services. She creates and submits executive summaries as her profession and is considered to be an expert in the field. Below is a list of questions and answers exchanged by a new commercial real estate investor and Lori.
Joshua Dorkin
Charles Feldman
Ted Karsch.
Is Multifamily Immune from Commercial Real Estate Decline?
by Ted Karsch | July 1, 2009While the turmoil in the residential real estate markets continues to make headlines, some analysts and prognosticators are questioning whether we will see the same kind of meltdown and mass foreclosures in the commercial real estate side of the industry. And the general consensus of those quoted in various news services and website across [...]