Industrial Warehouse


Leveraging Our Elite CMBS Network

Challenge

Following the aggressive valuations of commercial property from 2000 through 2006, the rebalancing of loan to values post 2007 saw virtually all property types decline in appraised value. Our client’s 153,853 square foot multi-faceted warehouse facility lost no tenants, but the property was simply overleveraged at the time of financing and what had been a 75% LTV became a 90%+ LTV.

THG’s challenge was two-pronged:

  • Convince the Lender to accept a discounted pay off and write down the asset immediately on a cash flow positive loan
  • Convince the Borrower that THG was accurate about the Lender’s motivation and to represent them in negotiations with the Lender
Goals

The Henley Group identified loan pools and individual loans that had not been securitized and were being held on the Lender’s balance sheet. We calculated that:

  • The Lender would be willing to take an immediate loss on the loan based upon the value deterioration of their collateral
  • The Lender’s highest NPV was approximately a 40% to 45% discount
Execution

THG was able, during this particular case, to leverage its wide peer network. We had an established alliance forged with a well-known Special Servicer and good relationships with former colleagues at the Servicing shop. We leveraged these relationships and our reputation to negotiate for a discounted payoff.

Outcome

The Henley Group and its team spearheaded a 44% discount with the Servicer and a re-financing of the facility at a substantially reduced basis with a local bank.

Whether your loan is currently in Special Servicing or may be heading down that path in the next 24 months, we can help. Contact us.

*References are available—just ask us.