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.
