• Idaho Commercial Real Estate Company

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  • Boise, Idaho   208.515.2068
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As Idaho commercial real estate broker, Jackson Cooper, Inc. provides state-of-the-art technology, innovative marketing tools, and in-depth research methods to effectively assist clients In Idaho and nationwide through all phases of commercial real estate.
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    An integral part of our success is our unique business model, which creates a competitive bidding environment aimed at producing the highest returns for sellers.
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    For two decades, Sperry Van Ness has differentiated itself by pursuing every opportunity to deliver better results to our clients.
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    35 Years of Commercial Real Estate Experience

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Case Resolution:
  • The Lender accepted the Borrowers Discounted Payoff of 60% of the loan amount which was accepted by the Borrower.
  • The Lender retained all escrows that were held by the Master Servicer which enhanced their recovery to the Trust.
  • The transaction closed within 60 days of approval with minimal costs to the Trust.
  • R.W. Kline Capital and/or assigns funded the discounted payoff and R.W. Kline is currently servicing for the borrower.

Benefits to the Lender:
  • The Lender benefitted from the experience and track record that the current Management Company had with the property and the cooperation from the Borrower to not pursue Bankruptcy options to resolve the loan and with a recovery that provided the highest net present value for the trust.
  • The resolution avoided a maturity default.
  • The resolution eliminated the Lenders cost to fund operations and to reposition the property.

Case Study - Discounted payoff of a distressed loan secured by a retail property - CMBS work out

  • Situation:
    • The Property is a 350,000 Regional Mall that was constructed in 1990.
    • The Borrower purchased the property in 2006 as part of a 1031 exchange and retained an experienced owner / manager of comparable properties to manage the property on its behalf.
    • Lender originated the loan in January of 2006 based on a conservative 60% of value at the time. The loan matures in November of 2011. At the time the Property was 90% occupied. The Property was anchored by three national tenants that occupied 60% of the Properties space.
    • In late 2008, one of the anchors filed for bankruptcy and closed its operations. Due to depressed sales a second anchor demanded and obtained a significant rent reduction in late 2009.
    • The vacancy of the Mall’s non-anchor space had risen to 20% by the middle of 2009.
    • During the time period from 2006 – 2008 a new 200,000 square foot Power Center as well as, a 150,000 square foot Upscale outdoor shopping center opened within 5 miles of the Mall.
    • While the demographic patterns and prospects for economic recovery in the area were promising the Mall’s age and configuration would require significant capital and time to reposition the Property.
    • Common area expenses of $15.00 per square foot were not being reimbursed for 40% of the Mall. As a result, the Net Operating Income at the property had decreased by 50% and the Borrower was funding operating losses and Debt Service.
    • The Borrower engaged R.W. Kline Companies in December of 2009 to assist them in working with the Lender to seek a resolution to the situation. On behalf of the Borrower, R.W. Kline Companies submitted a Letter of Imminent default to the Lender in January requesting that the loan be transferred to the Special Servicer for Modification.
    • After funding significant Debt Service and Operating Shortfalls for 15 months the loan went into default in February of 2010 and the loan was transferred to the Special Servicer in March 2010.

  • Resolution Considerations:
    • During the time of default with the guidance provided by R.W. Kline the Borrower, remitted to the lender excess cash flow and maintained a good relationship with the Special Servicer.
    • R.W. Kline completed an independent assessment of the market, obtained valuations and reviewed the Borrower’s projections of net income.
    • While the potential for a recovery and repositioning of the property were promising, the maturity of the loan in March 2011 and the current conservative nature of the debt markets would not provide sufficient basis to justify a full repayment of the loan at maturity let alone justify the cost of carrying the operations of the Property.
    • On behalf of the Borrower, R.W. Kline requested that the lender consider a Discounted Payoff of the loan at an amount equal to 60% of the loan balance. R.W. Kline also arranged for the current Management Company to acquire the property under terms acceptable to the Borrower and to fund the costs of the Discounted Payoff.

  • Lenders Considerations:
    • Within 60 days after transfer, the Special Servicer obtained a new appraisal that indicated that today’s value of the Mall was 55% of the current loan balance. In addition the lender obtained brokers opinions of value that indicated a value of 75% of the loan amount was appropriate. All of the broker opinions of value were based on what was considered appropriate levels of revenue but failed to accurately estimate the costs to reposition the Property.
    • The upcoming maturity of the loan in November of 2011 did not coincide with the 3 to 5 years that would be required for the property to generate sufficient value to repay the full amount of the loan.
    • The lender was comfortable with the integrity of the Borrower and the plan and financial projections of the Management Company.
    • The Property was located in a Judicial Foreclosure state that would have provided the appointment of a receiver and a 180 day Foreclosure period should the lender elect to foreclose.
    • The Lender estimated that the marketing and legal costs of a foreclosure process would cost at least 20% of the ultimate sales price and from prior experience knew that the sale of a foreclosed property taints a property’s value.

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Commercial Real Estate Idaho Office. 208.515.2068

Jackson Cooper Inc., 950 W Bannock Ste. 1100 Boise, Idaho 83702 info@jacksoncooper.com