Office Buildings

200,000 sf Class A Phase I Office Building Development

Situation: This workout involved a construction loan to develop a four-phase office park. The principals filed for personal bankruptcy with only the first phase completed and three parcels of excess land left undeveloped.

Strategy: Our strategy included foreclosure, bankruptcy and disposition. We initiated foreclosure of the recently completed three-story, 20%-leased, phase I office building. We then negotiated a consensual foreclose with two Chapter 11 bankruptcy trustees. After we obtained title, we engaged separate firms for property management, marketing and leasing. We successfully leased the building over a two-year period. Additionally, we retained local counsel and development professionals to retain the development approvals for the remaining three phases.

Resolution: Rather than liquidate the project, the business plan included a complete lease-up of the building and sale at stabilization in order to maximize recovery.

Fifteen-Story 145,000 sf Class B Office Building

Situation: Due to increased property vacancy and a decline in rental rates this loan fell into default.

Strategy: We successfully managed this assignment by negotiating a consensual foreclosure with the developer after the court appointed a receiver to collect rent. Thereafter, we engaged a contractor to complete property improvements and hired a major leasing and management firm to increase occupancy. After partial lease-up the property was sold to an investor with financing provided.

Resolution: The sale prior to stabilization represented the best exit strategy for the successful resolution of this asset.


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