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Part 4
By Adrian Evarkiou, Sierra Consulting Group, LLC

The best outcome for all is that the receiver creates more value for the asset. Acting as a neutral 3^rd party by keeping all stakeholders involved with minimum write downs. The debtor can continue on as the owner of the building because the asset’s value is back up to the loan amount and is able to generate the income needed to keep paying the bank. Other solutions can come in the form of finding a new use for the building, filling it with new tenants, utilizing the relationships of the receiver for the good of the building.

 In one recent case Sierra handled an empty 45,000sf retail building in Avondale. At the point we took over, six tenants had moved out over the last year. Sierra was able to bring in a church to purchase the building, bank financed the deal. Both parties were extremely happy and at the end of the day the church paid more than the value of an empty retail building, but they were able to fill a need without having to build a building. They now have an asset, and due to their stability, their people have increased and so have their donations. These are the stories that you rarely hear regarding receivers.

For more information on receiverships and the services that professionals at Sierra Consulting Group can provide, do not hesitate to contact us at 602-424-7001 and visit our blog for future postings.

Sierra Consulting Group has been a leader in the turnaround, receivership and consulting services industry since 1981. Sierra is comprised of a group of extremely talented and experienced turnaround, real estate, accounting and finance professionals. We advise lenders, debtors, attorneys, owners and investors in a wide variety of transactions.

Part 3
By Adrian Evarkiou, Sierra Consulting Group, LLC

Your number one goal as the receiver is to make the building look good – as the landlord, a receiver will  make sure it is well maintained and increase the aesthetics, but at a minimal cost.   In many cases, the project has already lost most of its value; we are not there to compound the problem, so you simply cannot spend money that just doesn’t exist.

 The toughest projects a receiver handles are the vacant buildings. They are at the most risk right now, with break-ins, copper thefts, and vandalism an everyday occurrence. Overnight a building can be gutted. This is mitigated by keeping a close eye on the asset. Receivers can hire security companies, automated security units (solar powered), cameras, and even hire existing tenants to watch the property.

For more information on receiverships and the services that professionals at Sierra Consulting Group can provide, do not hesitate to contact us at 602-424-7001 and visit our blog again for the final section (Part 4) on receiverships: Getting the Most Out of a Bad Situation.

Sierra Consulting Group has been a leader in the turnaround, receivership and consulting services industry since 1981. Sierra is comprised of a group of extremely talented and experienced turnaround, real estate, accounting and finance professionals. We advise lenders, debtors, attorneys, owners and investors in a wide variety of transactions.

Part 2
By Adrian Evarkiou, Sierra Consulting Group, LLC

Receivership cases can be incredibly complex, with each stakeholder hoping to walk away with as little damage as possible. This means as a receiver you have to be a legal expert, financial advisor, and property developer; however each and every case starts in the accounting department. A receiver will start by getting a good grip on the bank accounts in order to start creating value for the property and start collecting the rent. From there you make real estate decisions (like a developer) based on the information provided from the accountants. If there is no money, it impacts the decisions. We need to know where the business truly stands to make sound decisions based on reality.

We utilize our past experience to take a holistic look at the financials as well as the marketing of the property, and the future use opportunities. In some cases, we will step in and create the deals to get the building occupied. With the funds available in the receiver’s account, we can enhance the project’s value. The receiver takes over the debtor’s bank account, manages the money that is there, and utilizes it on the project for the good of the project and to bring in additional income.

Stay tuned for Part 3 – Asset Managers for our multi-part posting of Receiverships as Solution Providers.  If you have any questions or would like more information, do not hesitate to contact us at 602-424-7001.

Part I
By Adrian Evarkiou, Sierra Consulting Group, LLC

In our current market condition, many commercial real estate professionals have or will be dealing with a distressed asset. Dealing with distressed assets is not clean or pleasant and in the current market, almost all will end up in foreclosure. Many hear the word “receivership” and think it will be an ugly situation, but there are and can be positive sides of receivership if you are dealing with a professional who knows how to make the most out of the situation.

What is a Receiver?

As receivers, we always approach it as a neutral party; we are able get past the emotion of the situation and evaluate the situation from all angles. The main duty of the receiver is to protect the assets — to become the de-facto property manager—and recover as much value as possible for both the bank and the debtor. In some cases the receiver will just focus on rent collection, but in many cases they work to maintain or increase the value of the asset and to help the debtor to stop incurring more debt.

If you would like more information on the services a receiver provides and how we may be able to assist you, do not hesitate to call us at 602-424-7001. Stay tuned for our next installment on receiverships about untangling the complexity of these situations.