(Carl Cronan is editor of Real Estate Florida.)
BOCA RATON, FL-Locally based Portfolio Property Management Global LLC has established a new group that aims to serve banks and other lenders with distressed, foreclosed and real estate owned properties. The new initiative, dubbed PPM-REO, is especially geared to local and regional institutions with properties worth between $15 million to $20 million in smaller markets in the Southeast and Midwest, as well as California, Arizona and Nevada.
Marsha Bass, president of PPM Global, says the company will offer its usual slate of property due diligence and analysis services, along with handling deferred maintenance issues that can cause value and tenant rolls to slip. She believes the need for the added service will increase in 2009, with real estate value losses estimated to grow into the hundreds of billions of dollars.
"If we were able to manage a sliver of that, it would certainly keep us very busy," Bass tells GlobeSt.com. "The scope and the magnitude are so large that it is difficult to quantify."
Even before the keys to buildings are turned back over, Bass stresses that banks need to act quickly to address REO while values are still near par with loan values. This is especially important within suburban or secondary markets outside major metropolitan areas, where the anticipated federal bailout program isn't expected to trickle down, she says.
While much-larger commercial real estate organizations have already formed distressed assets divisions to help major financial institutions, Bass points out that smaller markets are overlooked as not being worth the effort. "We're at the front end of that game," she says.
Established in 2005, PPM Global manages 3.4 million square feet of commercial real estate valued at $4.3 billion in Florida and six other states. The firm conducts detailed analysis of the physical and financial condition of buildings to determine what is required to preserve or increase a property's value. "We look at everything from the roof and HVAC systems to ADA compliance and the striping in the parking lot," says John Guardiola, the firm's engineering director.
PPM Global has also hired David Oddo as executive vice president of business development. The 20-year real estate industry veteran and William & Mary College graduate has extensive experience in various commercial property and asset management regimens, including third-party and landlord representation. He is also a LEED-accredited administrator for the US Green Building Council.
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