Market Monitor LI Newsletter
November 2010 Vol. 2 Issue 3

Real Estate Mortgage in Default - Next Steps
By Roy S. Ryniker, Reorganization Alternatives Group, Ltd.

Notice arrives; your mortgage is in default. A not uncommon development as more than $600 billion of commercial mortgages will mature annually over the next several years with limited liquidity available in the real estate capital markets. What next?

To prepare for a negotiation with the mortgage holder, there are specific action steps a borrower should take to significantly increase the likelihood of a successful outcome:

1. Prepare an Asset Management Plan - develop a three year financial projection of the property which should include assumptions on: a profile of the property, leasing terms, occupancy rates, and operating expenses. The projection should make allowances for the cash requirements of tenant build outs, leasing commissions and capital expenditures. Include a summary of lease specifics for existing tenants. Plan expenditures to maintain the current quality of the property.

2. Documentation Requirements - in addition to the financial projection, the borrower should have prepared updated financial statements on the entity that owns the property, and if loan has any personal guarantees, prepare an updated Personal Financial Statement for each guarantor.

3. Develop the Negotiation Strategy - the borrower should first determine what they are seeking to achieve in the negotiation they are about to engage in with the lender. The lender has concerns too, which you may leverage to your advantage. The lender's options are: (1) proceed with a foreclosure proceeding; (2) accept a less than full repayment (short sale) on the loan; (3) accept a deed in lieu of foreclosure (accept borrower's offer to give up ownership interest in the property); (4) restructure the terms and conditions of the mortgage; (5) do nothing, just wait out the situation and see what develops.

But what is optimal for the borrower?.....
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Choosing a Real Estate Agent

By David G. Hunt

How do you choose a real estate agent?

Probably the very best way to answer this question is to tell you how we choose a real estate agent when an assignment takes us off Long Island. In that case, we may need the expertise of a local agent to assist me with properties, zoning, economic development opportunities and the like.

First, we will only work with one agent exclusively. The primary reason is that we want that agent to legally represent our client's interests. In New York State, a real estate agent has a fiduciary responsibility to protect the seller or landlord's interests, unless there is a written document to the contrary. So we make sure that we have a contract. And because we are working with.....
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Companies on the Move
Becker Electronics is moving to 50 Alexander Court, Ronkonkoma...  McAndrew Conboy & Prisco is moving to 1860 Walt Whitman Road, Melville... Omnitek Partners  is moving to 85-03 Air Park Drive, Ronkonkoma... Quinlan Financial Group is moving to 400 Broadhollow Road, Melville... Inter-County Bakers is moving to 350 Carleton Avenue, Central Islip... Goldway Us Inc is moving to 105 Remington Boulevard, Ronkonkoma... Bradley & Parker  is moving to 320 South Service Road, Melville...

What's New at Hunt
Financing File
Current Market Rates and Programs for the Long Island Commercial Marketplace

The SBA 504 loan program offers long term (10 or 20 years) fixed rate subordinate mortgage financing for the purchase and renovations of existing buildings or new buildings and equipment. Loans are up to 40% of the project cost, maximum of $5,000,000 for manufacturers and $1,500,000 for all other businesses.... (MORE)

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Syosset, NY 11791
516-937-1000
www.huntcorp.com
COMPARABLE SALES IN THE LAST 12 MONTHS
 
City            
Address                          
Property Type  
Size SF  
Office SF
 Acres Total Sold Price/SF 
 Sold Date 
Commack
66-70 Austin Boulevard
Industrial
40,000
6,000
2.66
$80.0010/27/2010
Westbury
120 New York Avenue
Industrial
25,000
3,000
.75
$84.2010/19/2010
Ronkonkoma
105 Remington Boulevard
Industrial
13,860
2,356
.92
$81.8910/12/2010
Amityville
38 Williams Street
Industrial
19,000
6,000
.59$48.6810/12/2010
Bohemia
44 Davinci Drive
Industrial
21,000
1,500
1.20
$76.19
10/12/2010
Amityville
5300 New Horizons Boulevard
Industrial
35,000
5,050
2.3
$85.7110/12/2010
MORE

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