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CASE STUDY: Discounted Payoff - CMBS



Situation:

  • 25,000 square feet of unanchored retail in Dallas, TX

  • 32% occupied, good submarket, but visibility to center challenged

  • 2005 origination, 2015 maturity, Borrower went into default in early 2012

  • $4M loan

  • Hart Advisors Group was introduced through a local mortgage broker


Consideration & Solution:

  • The borrower engaged Hart Advisors Group to restructure the loan. The loan had already been transferred to special servicing and the Borrower was unsure if they wanted to keep the property given its challenges

  • Hart Advisors Group completed an independent assessment of the market, reviewed projections, and completed a proposal to the Special Servicer within 15 days of engagement

  • Hart Advisors Group worked with the Borrower to review lien situations, cures and cash flow remittance, a “must” in working with a loan restructure

  • On behalf of the Borrower, Hart Advisors Group submitted a proposal to achieve a discounted payoff of under $2M, a 52% discount from the current unpaid principal


RESULTS The Borrower was able to pay all cash and the loan closed in two week

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