Greystone’s Special Servicing Group is well positioned to pro-actively manage Sponsor/property exposure. Our team sources CMBS investment opportunities, manages and performs investment due diligence, provides portfolio surveillance and bond reconciliation, and serves as liaison as well as ongoing management of the portfolio and resolution of distressed assets.
Resolutions
Special Servicing Group has Resolved Over $59.6B of Defaulted Loans Since its Inception in 2002
Portfolio Composition
33 Loans, 33 Properties Totaling $969M Active in Special Servicing
(As of 12/31/23)
Experienced & Tenured Staff
Deep Knowledge of Policies and Procedures
Historical Resolutions by Property Type
| Property Type | % of Resolved Assets | % of OPB Resolved |
|---|---|---|
| Office | 35% | 35% |
| Retail | 35% | 34% |
| Multifamily | 14% | 14% |
| Lodging | 9% | 9% |
| Industrial | 5% | 5% |
| Mixed Use | 1% | 1% |
| Mobile Home | 1% | 1% |
| Self Storage | 0% | 1% |
| Healthcare | 0% | 0% |
| Other | 0% | 0% |
| TOTALS | 100% | 100% |
Special Servicing Case Studies
Situation
The Trust faced a complex challenge with a defaulted $74.8M loan secured by a single tenant office property in Connecticut. The loan was previously modified when the sole tenant vacated; however, the borrower continued to encounter significant issues, prompting the need for strategic restructuring to return the loan to performing.
Solution
Greystone provided a tailored workout structure that maximizes the recovery to the Trust, implementing a multifaceted loan modification strategy. This involved allowing the borrower to enter into a direct lease with the sub-tenant to ensure occupancy and allowing the borrower to use reserves to address cash flow shortfalls. Provisions for a swift foreclosure process were also included if needed.
Result
The strategic intervention led to the property achieving a 45% occupancy rate and successfully adhering to the revised loan terms. This solution allowed the loan to return to performing status and stabilize the collateral property despite the challenges posed by the tenant’s exit. The solution exemplifies the importance of adaptive loan restructuring in maintaining asset performance and safeguarding financial interests in unpredictable market conditions.
Situation
The Trust faced a challenge where an anchored lifestyle center in Florida was foreclosed when the borrower could not payoff at maturity. The largest tenant declared bankruptcy which further added to the complexity. The property had significant financial challenges and required strategic intervention to improve its value and marketability.
Solution
Greystone took decisive action by retaining two new anchor tenants for the property, significantly increasing occupancy to 97%. These strategic moves enhanced the property’s financial performance, making it more attractive to buyers.
Result
The anchored lifestyle center was sold for a price greater than the appraised value and higher than the total Trust exposure. This successful sale not only exceeded financial expectations but also demonstrated the effectiveness of strategic tenant acquisition in boosting value and marketability.
Situation
A limited-service hotel in Lincoln, Nebraska encountered significant operational and financial challenges due to COVID impacts, leading to the appointment of a receiver. The property’s franchise agreement was set to expire within 18 months and required a Property Improvement Plan (PIP) for renewal. The borrower consented to receivership as part of the strategy to address these challenges.
Solution
Greystone oversaw the process in which the Receiver and Borrower entered into an agreement to sell the property, subject to the approval of an assumption of the loan. The agreement provided a 24-month extension option on the loan’s maturity, secured a new franchise agreement, and ensured the required PIP was fully funded through a reserve deposit.
Result
The loan was successfully returned to its performing status with no financial loss incurred. Greystone’s strategic involvement facilitated the property’s sale by consenting to a loan assumption and extension, and provision for payment of the necessary PIP requirements through a fully funded reserve. The new franchise agreement was established as part of this process, allowing the property to continue operations in a challenging post-COVID environment.
Situation
A shopping center in Algonquin, Illinois faced a complex situation involving protracted litigation in which the borrower contested both the foreclosure action and the guarantor’s recourse obligations, which ultimately resulted in both a foreclosure judgement and a full recourse money judgement against the guarantor. The property required strategic intervention to effectively resolve the financial and legal challenges.
Solution
Upon finalization of the judgment, Greystone orchestrated a simultaneous transaction that included a deed in lieu of foreclosure, a settlement with the guarantor for the deficiency amount, and the sale of the property as an REO (Real Estate Owned) asset. This coordinated liquidation approach efficiently resolved the asset in a single, streamlined transaction once resolving the legal issues.
Result
The transaction resulted in a full recovery of the judgement amount, including all interest through the payment date as well as the default interest. Greystone’s strategic approach led to a successful resolution with complete financial recovery.
