COMMERCIAL MODIFICATION – HELPING DISTRESSED CRE BORROWERS

Since COVID-19 Hit in March of last year… Lodging, Retail, Hospitality and some other commercial property types have seen values decline due to lost cash flow and increased vacancy.

As a Result, banks are either not refinancing many maturing loans due to balances being greater than the current value and or employing tougher underwriting requirements to protect against further future losses.

With unemployment hovering around 6% nationwide and higher in some states, there is a legitimate fear to lend on some property types and projects considered to be “high risk asset classes” such as new development, hotels and retail.

Thousands of Mortgage Brokers Have Left the Industry and more will soon until the pandemic passes and unemployment steadily decreases over time. In short, it’s a mess out there but take heart.

There is A Silver Lining… The Debt Restructuring Side of The Equation is Alive and Well.

With 3.82 Trillion in Commercial Outstanding Debt and 10s of Billions Due to Mature in The Next 1 – 3 Years The commercial modification market will provide a 2 – 3 year window of cash flow helping CRE owners save their property, equity and jobs.

COMMERCIAL MODIFICATION

3.82 Trillion – Total CRE Debt Outstanding (Q4 / 2021)

Delinquency Will Continue to Rise Through 2023

39% (1.5 Trillion) Held by Local and Regional Banks

21% (798 Billion) Held by Agency/GSE

15% (577 Billion) Held by Life Companies

14% (529 Billion) Held by CMBS, CDO Issues

Hotel Delinquency = 21.5%

Retail Delinquency = 11.8%

Office Delinquency Exceeds 4%

Apartment Delinquency up 200 basis points

Millions Still Unemployed

Commercial Mortgage Modification Is the Only Logical Solution for Borrowers with Maturing, Distressed, Foreclosure or Receivership issues going on. If a borrower is in a CMBS (commercial mortgage-backed security) loan they are in a very different position today from where they were a year ago as relates to the ability to modify the terms of the loan. WE CAN HELP!