Distressed assets have been a hot topic in the commercial real estate industry for the past few months, especially in the office and retail spaces. Distressed assets in commercial real estate...
Distressed assets have been a hot topic in the commercial real
estate industry for the past few months, especially in the office
and retail spaces. Distressed assets in commercial real estate
refers to properties or other real estate investments that are
facing financial difficulties due to the property owner or investor
being unable to make mortgage payments, pay maintenance costs or
other related expenses. Selling a distressed asset or giving back
the keys are not the only options and may not be the best
options.
Selling a distressed asset may not generate enough proceeds to
pay down the balance of the loan on the asset. Letting the asset go
into special servicing is not the best option either. Giving the
keys back and walking away from the asset could potentially lead to
other liabilities for the asset owner, including personal recourse
and tax liability at the time of loan foreclosure. It is worth it
for asset owners to discuss other options with lenders.
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