| Posted by stuart on January 31, 2010 |
Looking to purchase $8 to $10 million of Performing but soon to be distressed CRE Notes
Commercial Note Brokers (CNB) has a buyer who is specifically looking for $8 to $10 million of currently performing commercial real estate backed notes. The exact specifications of the notes need to meet the following critieria:
Performing but distressed notes criteria
- One single note or multiple notes.
- Currently performing.
- Soon to be distressed due to inability to ‘roll over’ the loan.
- Preferably the seller is a bank.
The buyer in this case is a bank. The bank is looking at a range of discounts on the notes, but expects between 5% to 20%. The loans can have a variety of maturities and current appraisal problems/issues are expected. Commercial Note Brokers intends to act as a workout facilitator for the businesses and loans and to assist the distressed businesses in returning to full profitability and in securing new permanent financing for their loans.
This situation is ideal for a bank that has too much distressed debt classified as investment or who wants to prune certain borrowers or loans from their portfolio with a minimal impact to the banks capital. The purchasing bank is overcapitalized and can offer permanent workout financing to the distressed borrowers.
If your bank is in trouble with too much commercial real estate debt and is looking to assist the borrowers who may be unable to prevent going into default as their balloon loan matures, our bank buyer will purchase the notes and help your bank align its real estate loan classifications with what the FDIC is demanding.
| Posted by david on January 30, 2010 |
The Internet has changed many things in our day-to-day lives. You can order food, clothes, book airline tickets, trade stocks, work for your company, buy a car, and see what the weather is outside your home in your pajamas. Another industry that has been transformed is the real estate industry – both commercial and residential. You can get comps and market research on your home so if you’re looking to sell without a broker, you may. You can also check out investments in condos in Dubai from your home in Middle America. The commercial real estate industry is no different.
If you’re trying to market your commercial real estate property or trying to sell commercial notes, you can, through the Internet. However, you’ll need a website, search engine optimization, paid search campaigns, blogs, social media, landing pages, sophisticated e-mail marketing and a myriad of other services to market a project successfully. It does no good to market a real estate property if no one can find it online.
As you may have read, or heard, the commercial real estate industry is not doing too well. Yes, that is an understatement. If you haven’t seen many foreclosure signs or for rent signs in your local town, you most likely will. The office and retail sectors are getting slammed by the recession, high oil prices and yes, the Internet. Don’t believe me? Look at Amazon’s recent earnings – they surged in the fourth quarter…largely based on holiday sales (http://tinyurl.com/y8knbyh).
Banks should make note of this trend and start to think progressively. Banks should consider a site like Commercial Note Brokers to market their commercial notes that are delinquent or will soon become delinquent. This is not a trend that will end quickly. The banking industry is looming on utter disaster if banks don’t start selling commercial notes. Believe me when I say that there are plenty of investors looking to buy commercial notes.
| Posted by david on January 27, 2010 |
What do the following big companies have in common?
1. Ritz Camera (365)
2. Waldenbooks/Borders (110)
3. Blockbuster (300)
4. Zale Corp (218)
5. Jones Apparel Group (69)
6. Starbucks (566)
7. KB Toys (461)
If you’ve been reading my blogs, you’ll probably have guessed that these companies shut many branches/storefronts down in 2009. And you’d be right. The corresponding number next to each company indicates how many stores closed in 2009 or in the fiscal year of 2008-2009. The one that surprised me though, is Starbucks. Caffeine is pretty addictive! This was a story published on Yahoo from Forbes. (http://tinyurl.com/y9zwuhm)
This may be a bad time for shareholders of each of these companies but it’s also auspicious for savvy investors. This is a time when investors can start to buy commercial notes from banks at a nice discount. Thanks to the Internet and the recession that we’re currently in, these companies can no longer support operations with certain storefronts. If conditions do not improve banks will soon see more toxic commercial notes flood their desk.
Banks should be looking into the future of each industry they hold notes for…especially in the retail industry and see if the horizon looks bleak or beautiful. This may help in the decision making process for commercial lending opportunities. But, that’s in the future. Banks need to focus on the problem at hand and that is, many notes that may be performing now, may not be so hot in the future. Commercial Note Brokers will be able to help banks by connecting them with commercial note buyers and helping these financial institutions rid their books of their toxic assets.
| Posted by stuart on January 25, 2010 |
Act now before your bank gets a Cease and Desist order from the FDIC
If your bank is struggling with problem loans and has not considered selling the notes to potential note buyers then you are seriously hampering your banks capital position. Granted, most potential note buyers out
there are sharks and bottom feeders looking for ridiculous deals and offering to pay 20 – 25 cents on the dollar. No rational banker will accept those terms and the banks do not have the resources or capabilities to find the multitude of note buyers out there who are willing the bid the note prices closer to fair market value.
However, there are a large number of wealthy individuals, funds, other banks and workout investors that are willing and able to offer the bank a very reasonable price for the distressed debt, they just don’t know who to contact. That is why we are here at Commercial Note Brokers.
We have met with a few banks recently that have waited just a bit too long before contacting us regarding selling the notes and sadly they have received FDIC
Cease and Desist orders within days of our meeting and before they were able to authorize our help.
So please, is you are a special asset manager, bank president, commercial loan officer or other executive in charge of disposing of REO real estate or distressed or soon to be problem loans for your bank, contact us now so that we can at least offer you another avenue that you may not have previously considered.
| Posted by david on January 18, 2010 |
I read a blog today that gas prices would be up to $6 per gallon in some places by the end of 2010. This is, of course, speculation however I don’t think it’s that far off. Even if gas prices are over $5 per gallon, that is still very sobering. These higher gas prices are not only going to affect the sale of gas guzzler SUVs, but also the commercial real estate market – especially the retail sector and the office sector.
As gas prices climb, more and more people will start to see the benefit of using online retail as a substitute for going to the mall. I can see people start reasoning with themselves by thinking that “ok, if I go to the mall and buy a new pair of shoes, I will have to pay an additional $10 in gas. Instead, I can order online, save the $10 in gas and also do my laundry.” In a recession, like the one we’re in right now, that is very rational thinking. Retail companies are not going to want customers rationalizing this if they want to keep their storefront open. Not only will retail stores suffer but also banks. If people are not buying from the physical store, this store won’t be able to pay the mortgage and the commercial bank note will soon be under-performing or non-performing. See where I’m going with this? Banks should start teaming up with their retail clients and start figuring out ways to put a positive message out to the public about shopping at the physical store. It may seem a little corny but these banks and retail stores need to be proactive in order for the banks not to suffer and have these retail stores go in default. The last thing a bank wants to see nowadays is another retail store not performing on their commercial note.
A similar scenario is happening in the office sector. Employees are going to start figuring out ways not to come into work because they don’t want to spend money on the gas for commuting. Thanks to the Internet and mobile phones, working from home is quite possible. However, employers are not going to be too happy about this. Perhaps they can start offering to pay 10% of their employees’ gas each month. This is just a suggestion of course but a problem that employers may be facing in the not too distant future. Again, this poses a problem for the office sector in general. If people don’t need to be coming to the physical office space, why would employers want to be paying for that rent? Again, banks will start to get fearful as soon they will realize that there is going to be a huge glut it the office sector and again, banks will look to get these commercial notes off their books as soon as possible.