The work out crowd including receivers, appraisers, and any other service provider who is suddenly focused on this space will have a banner year. A court appointed receiver in this recent LA Times article said “The level of defaults will come as a shock to the general public..I don’t think we have seen anywhere near yet how dramatic that is going to be. The tunnel is still dark.”
Sadly we can report this is true as our own team has dealt with three active transactions in the past 60 days who faced (in two cases) a building headed into foreclosure and in one case a building trading “deed in lieu” of foreclosure. Getting a call from the new owners after a property is sold on the court house steps is a gut check experience, but I’m afraid it will continue for some time.
Tenants need to take active and aggressive measures to protect themselves in this environment. There exist a whole suite of legal tools as well as good old fashioned common sense that can be put in place. Watch future post for some of these to be addressed in detail. In the meantime, let us know if you have a “situation.” In our role of tenant advisor we are well equipped to sort through the legal issues of struggling landlords.