Experts: Troubled Asset Cycling May Speed Up

SAN FRANCISCO-Amid reminders from real estate researcher Foresight Analytics that billions of dollars in real estate may go back to lenders this year, panelists at an Urban Land Institute meeting in San Francisco shared glimpses of how the real estate is trickling out. Titled “Asset Advisory, Receivership and Workout Strategies Emerging in the Downturn,” the panel revealed to more than 150 attendees that relationships and experience are key to stepping into the deal-flow.

“First and foremost, owners of troubled assets are seeking operating partners, advisors and receivers who really know the real estate, and can move quickly,” said Jerry Hunt, managing partner of Quattro Realty Advisors. Panelists agreed that there are many qualified firms, and bankers are turning to people they feel they can trust.

And where are all the asset-sales that were predicted? “Banks don’t want to sell in bulk portfolios because of the tremendous discount, whereas individual note-sales attain higher values,” said Curtis Chinn, formerly of Central Pacific Bank and now SVP of special assets for East West Bank, who characterized his comments as industry-perspective and not that of a particular bank. He said that while sales are increasing, banks have commitments to their own shareholders and are maximizing their position, following an FDIC road-map in October that enables more patient loan workouts.