Neil Victor

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate Experts.

Sperry Van Ness Asset Recovery Team SVNART

OUR PURPOSE WHY HIRE SVNART?

Sperry Van Ness Asset Recovery Team www.svnart.com Offices independently owned and operated.

Since its founding in 1987, Sperry Van Ness (SVN) has redefined the commercial real estate brokerage industry, having sold billions of dollars of real estate for its clients from Main Street to Wall Street. Adjusting to every market and every real estate cycle the Advisors of Sperry Van Ness have guided their clients toward maximum results for their assets. SVN is well established in 160 different marketplaces across America with nearly 1,000 Advisors on the ground to serve any client's needs.

Today, with the complex and turbulent financial markets and the rapidly changing real estate marketplace there has never been a greater need for true "hands on" experience from time-tested professionals. Sperry Van Ness has responded to meet this need by assembling a team of seasoned veterans of the real estate industry who over the past 40 years have witnessed real estate at its very best and its very worst. Clients can depend on SVN Advisors to implement creative strategies and intelligent solutions for their real estate related assets.

The "Asset Recovery Team" at Sperry Van Ness (SVNART) has been created to provide any client a "single full service source" for the efficient and effective workout and disposition of any real estate related asset including loans, portfolios and individual properties of all asset types. In addition to delivering optimal returns to its clients, SVNART and its strategic partners provide expert guidance throughout all phases of the real estate market including Broker Opinion of Value, Appraisal, Marketing Proposals, Market research, Leasing Services Property Management, Asset Preservation, Accelerated Marketing/Auction, Sealed Bid, Investment Brokerage Services, Leasing Services and Loan Sales.

OUR SERVICES

Client Consultation - Market Research - Asset Evaluation - Broker Opinion of Value - Marketing Proposals

Portfolio Analysis and Pricing - Accelerated Marketing - Auction - Sealed Bid - Sealed Bid with Auction

Online Auctions - Accelerated Listing - Full Service Brokerage - Investment Sales - Equity Participation

Leasing - Asset Preservation - Property Management - Tenant Representation - Joint Venture

Asset Management - Loan Sales - Forbearance Negotiation - Modifications and Consolidations

Short Sales - Workout Resolutions - Deeds In Lieu of Foreclosure - Bankruptcy Trustee & Receivership

SVNART provides services to borrowers, lenders, individual owners and institutions. These services are intended to simplify, accelerate and maximize returns throughout the real estate continuum. The Sperry Van Ness Asset Recovery Team is ready, willing and able to meet your real estate requirements with its creative approach, collaborative platform, proven track record and its culture of cooperation - placing the client's needs above all else.

Neil Victor, CCIM and Ava Terry, ABR operate the Sperry Van Ness office in Huntsville, Alabama. As part of the SVN team we are able to service clients needs nationally. We specialize in Multi-family and sale-lease back investment properties.

The attached article appeared in today’s Ft. Myers News Press in the Real Estate Section

Neil Victor, CCIM and Mark Alexander, CCIM are Senior Advisors with Sperry Van Ness local Offices. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.

Johnny Paycheck sang the hit song “Take this job and shove it” back in my college days of 1977. The 2009 remix should be entitled, “Take this job and treasure it”. The US has been losing jobs for a while. According to a new report by REIS, the US averaged losing 670,000 jobs per month from November 2008 thru March 2009. This stomach churning pace has slowed a tad from April thru June 2009 to an average of just 436,000 jobs lost per month. This is our version of good news in 2009. It is kind of like running out of milk but you are thankful the refrigerator is still working.

The slowing pace of job losses is a sign of hope for the economy but it is not a sign of stabilization and recovery for the office market. We need positive job growth to achieve that.

Office building owners today are singing a different rendition of Paycheck’s song entitled, “Take this office building and buy it before I lose it to the bank”. When office space is occupied and then it goes vacant, we measure the amount of square feet and call it “negative absorption”. The US office market had negative absorption of 25 million square feet recorded in the first quarter of 2009 followed by another 20 million square feet in the second quarter of 2009. This is the sixth consecutive quarter of negative office absorption since January 2008. Office properties are suffering during this prolonged recession. There has never been a better “Tenant’s Market” to rent office space than right now. There has never been a better “Buyer’s Market” for office space than right now. REIS expects the pace of negative office absorption to continue slowing thru the end of 2009 at an average rate of negative 11 million square feet per quarter for the last half of this year. This should help us reach a stabilization in the office market but don’t expect a recovery until 2010 assuming the pace of negative absorption (and job losses) continue to dissipate at the same pace.

When tenants suddenly downsize or vacate before their lease expires, they look to sub-lease their space often at a discount of 10% to 30% off their contract rent today. But some tenants wise to the instability of other fellow tenants are refusing to enter into sub-lease agreements with other tenants. They fear departing tenants could default on their main lease which would then cause their sub-lease to be voided prematurely. So we are seeing many new tenants chose to only sign leases direct with owners which then forces the owners to settle separately with the defaulting/downsizing/vacating main tenant.

As office vacancy increases, asking rental rates are decreasing and tenant concessions to sign new leases (i.e. build-out allowance and free rent) are increasing. Office values are on their way down. How could they not be? REIS predicts 67 million square feet of negative office space absorption for all of 2009 and this does not include new buildings that have never been occupied before or the 50 million SF of new office product that is being delivered in 2009. If your office building does not have enough tenants to allow you to pay your mortgage, foreclosure may be nearing. This common situation today is causing many office owners to snap out of their dark cloud of denial as they finally accept the reality of today’s market and pricing is getting much more aggressive. Commercial office brokers are starting to go back to work and not a moment too soon.

Even office owners who have sufficient occupancy to cover their overhead have deep concerns as their mortgages come up for renewal over the next few years. Due to much stricter lending requirements today coupled with diminishing market rental rates and growing vacancy rates, many office owners cannot qualify for their refinancing without making large additional cash down payments…which is widely expected to cause many billions of office foreclosures over the next few years.

All this pain hitting the office market in addition to the pain banks have already endured from the residential market is causing appraisers (who mostly work for banks) to appraise office properties lower and lower. This in turn makes it even harder for the office owners to refinance …as our muddy office market snowball continues to roll down the bumpy hill towards the bottom.

Imagine being an appraiser trying to put a value on an office building today. There are not many recent closings to use yet you are required to come up with a value. And some of the recent closings were foreclosures where the bank took the building back for the size of their mortgage. Is this recorded price at the mortgage amount really fair market value? It only proves no one was willing to pay more than the mortgage amount so presumably the fair market value from an arm’s length buyer would be somewhere less. How do you reconcile that funky tomato and come up with a value that pleases everyone? This is what happens in a destabilized market. It all comes back to jobs in the end. Once we stop losing jobs, foreclosures will eventually stop and the office market will stabilize which leads to recovery when jobs start growing again. Lee County is supposed to reach small positive job growth in 2011. It is not going to be an easy road from now until then, but we have the mettle to get through this. I am reminded of a quote scribbled on the inside of a shipboard locker that I was made to paint as a freshman at the Massachusetts Maritime Academy in 1977. The author had been a senior cadet writing about his reflections on just having endured a tough two month summer sea training cruise with difficult people in southern waters with no air conditioning. As I painted that dingy smelly cabin, I listened to my radio blare the latest hit “Take this job and shove it”, and I stumbled upon this seaman’s quote: “Let no man put us asunder for we have done that which was deemed impossible by men of lesser stature. We have done it and we will do it again.”

Mark Alexander, CCIM

Senior Medical Office Advisor

Sperry Van Ness

5121 W. Hyde Park Court, Suite 204

Fort Myers, FL 33912

239-826-4174

marka@svn.com

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber.

This article was forwarded to Neil Victor, CCIM a Senior Advisor with the Sperry Van Ness Huntsville Office.

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage.

The following article is from an interview between Jerry Anderson and Angela Pruitt of Dow Jones. This article also ran on wsj.com and smartmoney.com.
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Investors Finding No Fire Sales In Commercial Property

By A.D. Pruitt, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Investors looking for blue-light specials on distressed commercial property are finding the pickings surprisingly slim as banks refrain from holding fire sales on troubled assets.

Despite rising loan delinquencies and foreclosures on hotels and on retail, apartment and office buildings, banks are reluctant to unload troubled assets at bargain-basement prices amid a lack of transparency and agreement on fair valuations. This deepens an impasse with distressed investors who have been aggressively setting up funds and other vehicles to acquire assets for a song.

"Quite frankly, I had predicted that the waterfall would have started by now. I thought there would be a tremendous amount of properties that were distressed from the lending world that a bank would have foreclosed on," said Jerry Anderson, executive managing director of the asset recovery team at Sperry Van Ness, a commercial real estate advisory firm. "That has not happened.

"We got folks calling us to let them know when the bank is willing to dump ( assets) for 20 cents on the loan value," he said. "There's nothing for them to buy yet at that type of a deep discount."

There are expectations the commercial real estate market is in the clutches of a free-fall similar or worse than the crisis in the early 1990s. Troubled commercial properties have more than doubled this year with the value of assets in default, foreclosure or bankruptcy topping $108 billion, according to a recent report by Real Capital Analytics.

Investors are getting prepared to pounce on distressed deals. For instance, over the last couple of months more than six real-estate investment trusts filed paperwork to launch initial public offerings, including Starwood Property Trust Inc., managed by an affiliate of Starwood Capital Group; and Colony Financial Inc., spawned by Colony Capital LLC, the owner of casinos, hotels and the late Michael Jackson's Neverland Ranch.

"There's still about a 20% to 30% differential between what the banks are willing to sell the assets (for) and what the market is willing to pay," said Edward Mermelstein, a real estate attorney in New York.

"If (banks) actually marked assets down to levels where the market is right now, most of these major lenders would have a very...serious problem," he said.

Even if investors are able to buy an office or retail property on the cheap, if occupancy rates remain low, they aren't likely to see a decent return on their investment in the short to medium term, experts say.

An influx of distressed commercial assets isn't expected to hit the market until after the first quarter of 2010 amid expectations that the Federal Deposit Insurance Corp. will have to shed portfolios of failed banks that it has taken over. So far, that total has reached 64 this year.

Jay Leupp, the portfolio manager for Grubb & Ellis AGA Realty Income Fund, said investors are looking for the same level of real estate asset sales executed by the Resolution Trust Corp. after the savings and loan crisis of the 1980s.

"It was essentially the sale of the century in terms of commercial real estate and a lot investors...made millions of dollars buying the properties very inexpensively," he said. "It will be a very long time before" those types of opportunities arise.

-By A.D. Pruitt, Dow Jones Newswires

(Lynn Cowan contributed to this report)

Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.

The Lipsey Company is a training and consulting firm specializing in the commercial real estate industry. Their training programs are designed to address the challenges facing the industry today.

Lease Blend and Extend
Tuesday, July 28th
12pm PST / 3pm EST

This is the first in the Real Estate Recovery Solutions Series. Tens of thousands of today's tenants are trying to find creative ways to reduce their cost of occupancy, while meeting their continued business obligations. Landlords are trying to find creative ways to grow their net operating income, reduce capital expenditures, and shore up their rent rolls. The Blend and Extend is the quantitative best practice that should be used, whether you're on the user side or the landlord side, to prove what is the right amount of blend. We will then discuss the numerous options on the extend. The exciting aspect of this topic is that the broker receives a consulting fee on the blend, and a commission on the extend. We will layout the innovative approach that should be used in this compensation combo approach. (The recommended calculator for this webinar is the HP10BII).

Presentations That Win
Tuesday, August 25th
12pm PST / 3pm EST

We have a proven recipe for making a winning presentation. In this session you and your team learn the five critical components of an effective presentation and understand what information should be included in each component. When you use this formula for presenting, we guarantee that you and your team will win more presentations in 2009. This session will help you change the game.

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.

Buying a Foreclosed Property

By Mark Alexander, CCIM

The sign on the wall in my high school football locker room read, “Failing to Prepare, is Preparing to Fail”. Never has this been truer if you are considering buying a foreclosed property today. There are many pitfalls that can befall the novice foreclosure property buyer. Failing to prepare in this case can cost you much heartache and many thousands of unanticipated dollars. It is not advisable to show up at the court house for the very first time on the day you expect to bid and hopefully buy that dream foreclosure. Do you think Tiger Woods shows up at the US Open at a course he has never played before and just walks up to the first Tee to start the competition cold? Nope. Tiger has a team and works hard to be successful. He has a trainer and golf coach to help him stay in shape and keep kinks out of his game and he practices incessantly. Prior to the tournament, he plays a series of practice rounds first to get a feel for the new course. His caddie walks the course just to take copious notes of every fairway, green, trap and hazard. Tiger does not fail to prepare and his results show it. You shouldn’t fail to prepare either. You have to know what you don’t know, so you don’t lose your shirt when trying to buy a foreclosed property. Visit the court house often to see how the process works first. A friend of mine told me a story about one of his employees who successfully bought a foreclosed home at the court house last year. This person spent a few weeks watching the process and noticed a small ring of veteran bidders each day. Eventually, a leader from this ring of regulars approached him and said they worked together so that they did not bid against each other to help insure that each got the lowest possible price for their winning bids. This ring leader offered to let him into their circle if he paid a fee of $5,000 cash to their group. I don’t recommend paying a bribe to any bidder at the court house to keep others from bidding against you. Just watch out for this activity and report it to authorities if you spot it. To cover all the bases adequately, you need a good team with the following members:

1. Broker

If you are not an expert who studies and works in the real estate market every day, then you need an experienced real estate broker to: perform a comparative market analysis for your target property, review land use & zoning to check for conformity and/or grandfather status, check neighborhood for long term viability (is it going up or going down) and review Homeowners Association or Condominium Association for past foreclosures which can cause higher fees going forward. Many Associations are assessing current and new owners for unpaid shortfalls caused by foreclosures. If the property is in a golf club community, he should consider the number of homes already built there which would have to share in the substantial cost of operating a golf club if the developer either fails or files for bankruptcy. She should check on availability and terms of insurance prior to you making a bid. Florida insurance underwriters are having withdrawal symptoms over any unoccupied building and it may become difficult or impossible to obtain an insurance binder to insure against fire, windstorm and vandalism. Having a tenant in place will help get better insurance rates. All these issues are a factor in considering how much to pay for a property and still be a “good deal”. Ideally this broker should have represented many sellers or buyers of properties similar to your target property. In our fast changing fluid market, a good broker will be invaluable to your team since he can add insight to similar properties that are listed and other properties presently under contract in addition to past comps that already closed. An appraiser will be less help than a broker in this case since the appraiser is limited to just previously closed sales. The more a market is less stable (i.e. more volatile) like we have now, the more past sales become less relevant to what a property is worth today. You need to acquire a feel for the current dynamics within your target market much like Tiger prepares to acquire a feel for the new course that he has not played before. If you are buying a commercial property, your broker should have the initials CCIM after his or her name. This insures you have a qualified professional broker who has diligently prepared himself to achieve the highest level of accreditation available for commercial real estate advisors today. When you get sick and see a doctor, do you make sure the doctor has an MD after her name? Of course you do, because when it really matters you want the most qualified person to help you. If it really matters to get the best deal on a commercial real estate transaction, you want a CCIM broker on your team. In addition to the usual buyer’s brokerage agreement based on a percentage of the sales price you buy, you can alternatively negotiate a hourly rate to get market reports prepared with specific advice on your target foreclosed property. Time is money. You can cover more ground quicker by having the experts who already have this knowledge…simply give it to you for a small fee.

2. Contractor/Inspector

If you are not a licensed contractor that has knowledge and experience with roofs, HVAC’s, plumbing, electrical, structural, landscaping and mold related issues….then you need such a person on your team. This is crucial and can save you tremendous amounts of money. A walk through a target property for a peek using untrained eyes and a quick “go/no-go” gut decision can cost you thousands of dollars later. Do not look for the cheapest inspector. Look for the contractor/inspector who is most thorough with years of experience. Ask for references from his clients over the past two years and ask for a sample report so you know what level of detail to expect. Skimping here to save a few hundred dollars can easily cost you thousands of dollars later. Defaulting mortgagors or vandals could have stripped the property of every appliance and fixture. Ignored routine maintenance for many months can lead to costly capital improvements. Leaks and mold can hide unseen inside walls. You need help to estimate Rehab costs to fix everything for your budget. Get the best inspector money can buy. He will save you lots of money, frustration and lost down time needed to bring the property back to a “no deferred maintenance” status so it can be occupied, rented or resold ASAP. Phase I environmental audits are recommended for commercial properties to insure no toxic site contamination exits. Your motto here is “No Surprises”.

3. Real Estate Attorney

If you are not a real estate attorney who is familiar with all the legal pitfalls that can occur when buying a foreclosed property, then you need a knowledgeable real estate attorney on your team. Fort Myers real estate attorney Jay Brett helped me prepare for this article by providing me with a list of things to do or to avoid doing when buying a foreclosed property. Jay’s firm is one of the oldest law firms in Ft. Myers and he is also a founding director of a local community bank. The following are a few bits and pieces from Jay’s very detailed list that your attorney should do for you.

Title Search

A thorough title search will uncover construction or tax liens, junior lien mortgages or other encumbrances such as a Lis Pendens where other parties may have claims against the property and be claimants who were not joined in the pending foreclosure action. How would you like to be the winning bidder at the court house and pay $50,000 for a home only to learn later that a $50,000 second mortgage and a $4,000 construction lien to an HVAC contractor still exist, regardless of the fact that the HVAC compressor has already been stripped out? You also need to know whether there are any back taxes or assessments owed, as these will not be wiped out by any foreclosure action.

Tenants

Tenants can be a blessing or a curse. You need to know which one you will inherit before you buy it. Check for tenants who may occupy the property and who may later claim possession rights under a written (or oral) lease that could include an option to buy the property which may still be enforceable. You cannot rely solely on public records or a review of the foreclosure case to determine whether a tenant is present. You or your broker should inspect property and look for signs of a tenant (or squatter). It is also important that your attorney check to see whether there exists “subordination”, “atttornment” and/or “non-disturbance” provisions built either into the mortgage being foreclosed or in any leases that may be in effect. For example, if a tenant is in place and there is a “non-disturbance” clause in either the foreclosed mortgage or the tenant’s lease which was approved by the foreclosing lender, a new owner may have no choice but to continue to honor that tenant’s lease, provided they are not in default. It is critical that your attorney carefully review not only the leases but the terms of the foreclosed mortgage as well. If you can get your hands on a survey of the property, he will check for encroachments and easements that may hinder the future value of the property.

Alternative Methods of Acquiring Ownership

There is a lot to consider when buying a foreclosure.

If you decide there is simply too much risk for your appetite in buying a foreclosure on the court house steps, you should consider working directly with banks and other lenders who already have an inventory of foreclosed properties called REO’s (i.e. Real Estate Owned). Some banks wish to unload these properties quickly to avoid payments of real estate commissions and other carrying costs. Some banks will also consider a short sale if it is reasonable and the mortgage foreclosure has not been yet commenced or is imcomplete. If you are going to “Low Ball” a bank, you may consider doing it shortly before the end of a calendar quarter before this non-performing asset will have to be reported to regulators.

Mark Alexander, CCIM

Senior Medical Office Advisor

Sperry Van Ness

5121 W. Hyde Park Court, Suite 204

Fort Myers, FL 33912

239-826-4174

marka@svn.com

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.