Case Property Services has added a new service that helps borrowers and lenders resolve a commercial real estate workout.
The Casefile, which is the first step of the workout process, is the compilation of due diligence that reviews and analyzes every facet of a distressed commercial asset to determine a workout negotiation between all the various parties. CPS focuses on property value creation, addressing operations, redevelopment, ownership, as well as working with the various creditors associated with the property.
Casefile looks at the history, location, market, competitive products and different option’s including redevelopment possibilities, public financing and recapitalization opportunities for the distressed commercial property. When the review is finished, all of the information is compiled into a detailed report that tells all the parties, such as a special asset servicing group, borrower, noncontrolling investors and affected municipalities, where they stand in the workout process.
Casefile addresses important factors such as “dollar to lease,” which is the real cost of retenanting, “real comps” that identifies relevant comps and explains exceptions, a “missing from market” retail tenant analysis, rent roll risk assessment and zoning and political analysis. Other items that are looked at in the assessment include floor plans, entrances and exits and configuration challenges.
According to the New York-based real estate advisory firm, Casefile is not intended to replace an appraisal or asset manager that handles these responsibilities for a commercial property. The firm added that the service was created to help handle complex issues at distressed commercial properties that require a time consuming in-depth analysis that Casefile accomplishes.
“The CPS team can help mitigate lender conflicts, clarify the time/yield analysis, reduce legal expenditures, prevent ineffectual receivership and introduce equitable alternatives,” the advisory firm said.
Through Casefile, a plan is mapped out for all the parties involved in the workout from the beginning until the end of the process. Rodney Tucker, principal of Oasis Capital Management and a consultant with CPS, said he believes Casefile is a beneficial service that helps restructure a defaulted mortgage loan.
“I have been involved in multiple loan workouts where effective solutions were hamstrung, not merely by the complexity of an asset’s financial structure, but also by the ever changing ‘valuations,’” said Tucker. “Combined with onerous regulations, there is a palpable smokescreen in the face of lenders and bondholders, effectively preventing viable resolutions that an asset manager no longer needs to fear by using Casefile.”