Taking its cue from the previous cycle of distress, Deloitte put together "a team with multiple capabilities and functionalities," Langford says. "You have borrowers who might be looking to restructure, extend or renegotiate their debt, lenders with large pools of assets that they either want to manage or evaluate other alternatives and investors who are interested in different types of distressed assets. We work across that spectrum, and with the various government agencies, as well. I look at it as a fairly broad suite of competencies that we can bring to different constituents in the market."
Based in New York City, Langford now leads a cross-disciplinary national practice that has grown to more than 60 partners, principals and directors over the last 12 months. They include several strategic external hires with competencies and experience in debt advisory, rating agencies, debt origination and underwriting, workout and restructuring, as well as capital markets and investment banking experience.
Because several members of the expanded Deloitte team were on the job in the days of the Resolution Trust Corp., "we have a lot of skill sets that are being leveraged in the current cycle," Langford says. He adds that many of those capabilities are being deployed into "government-related projects, or alternatively, a lot of work right now is with the lending community."
In the last cycle, Langford says, "we worked with the debtors, lenders and investors. There's a focus right now on providing different kinds of support to the lenders, as they start to evaluate what they have and what realistic actions they need to take." Specifically, Langford says that means that with lenders, "rather than just modifying or extending terms, we're working with them to understand on a case-by-case or asset-by-asset basis what their resolution strategy is going to be."
Up until now, would-be investors haven't seen many transactions, due largely to banks' tendency to extend loans rather than put assets on the market. "One of the challenges is judging when the timing and pricing will be right for bidders and sellers to realistically come to the table and start moving product," Langford says.
He says that individual institutions have to confront the question of "whether there's going to be an outright distress scenario or pockets of loans that are sold on a discrete or piecemeal basis. Understanding what types of situations there are in the market and where a particular investor can play most effectively are going to be important."
Langford comes to his current position at Deloitte from the company's US real estate M&A practice, which he has led since 2005, and from its Northeast real estate practice, which he has overseen since 2008. He joined Deloitte in 1989.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
