Commercial Short Sales – Part 2

Jag Grewal

Jack McCabe, real estate commentator, was considered the purveyor of doom a few years ago.  After reading his comments in the Tribune Monday, June 28th article, he now seems to be on the cutting edge of Florida commercial real estate.  Let me just say that I thoroughly agree with his assessment of the market and have been saying exactly the same thing for some time.

The last time I blogged about short sales I talked about my client, Bob.  Bob owns a 2,500 square foot office condo built in 2006 that he was upside down on and he was forced to stop paying his mortgage as his business had slowed significantly. Bob asked me to do BPO to list the property for sale.  Once he took these proactive steps his bank was very receptive to talking with him about how to make the loan current.

Bob holds a $600,000 mortgage and the property is now worth considerably less.  The bank has been working with him and hopefully they will be modifying the loan. The bank’s other option is to look at a short sale. I believe that this scenario is going to become more the standard practice.  Short sales are going to be the way to go with trouble commercial real estate.

The process of a commercial short sales is much quicker than residential short sales in my experience and I believe this is due to the nature of commercial lending in general.  Commercial lending is a much more personal relationship.  usually the borrower has a good relationship with his banker from the onset. Things move much faster and decisions are made quickly.

To summarize, commercial short sales are going to be the future of commercial real estate business.  If you are underwater on your mortgage, call me and I will be more than happy to share my experience and knowledge of the process.

Jag Grewal has closed $7.96M of commercial property transactions during the first six months of 2010, and has over 25 years of commercial real estate experience.

How many people missed their “champagne moment”

An article in today’s Sarasota Herald Tribune provided me with an early morning chuckle to go with my java joe. The article (link appears below) tells the saga of a gentlemen who missed his “champagne moment” when he rejected an offer he couldn’t refuse, but did.

This report begs the question, how many people in our market missed similar opportunities because they believed there was no end in sight to the boom. The damage done to the financial well being of persons of this ilk is untold and begs the $64 million question, will values ever return to what were champagne levels and if so, when.

From my perspective there are some situations where the value of some real estate, in particular vacant land, will never return to previous levels until such time as a healthy demand can be demonstrated for the end product.

It will also be some time before financing is available for any development that has a hint of speculation to it. If there is a moral to this story, maybe it is that you should never refuse a glass of champagne, particularly when it is chilled to perfection.

http://www.heraldtribune.com/article/20100618/ARTICLE/6181042

Property owners face sad scenario

Jag Grewal

Recently, Jag Grewal, commercial Realtor with Ian Black Real Estate, hosted a seminar for commercial property owners to explore their options regarding declining rents, increased vacancies and loan defaults.

Click here to read the full story, as reported in the Sarasota Herald Tribune.

The panel included Jag Grewal, Jo Ann Koontz, PA, Christopher Boss,PA, and Brad Cox, Senior Vice President with Thomas D. Wood & Company.