Search
 

Is Extend-and-Pretend Your Friend?

As handy phrases go, extend-and-pretend is hard to beat. It's a shorthand that is easy to understand and summarizes, whether fairly or not, the approach…

By Bob Howard is the West Coast correspondent for GlobeSt.com | Updated on May 01, 2011

As handy phrases go, extend-and-pretend is hard to beat. It’s a shorthand that is easy to understand and summarizes, whether fairly or not, the approach that lenders have taken to coping with the huge volume of distressed assets produced by the recession and falling real estate values. Whether the phrase is fair or not is subject to debate, says Mark Grinis, partner and global real estate fund leader at Ernst & Young, and a member of the DAI editorial advisory board. When I asked Grinis if extend-and-pretend has helped or hurt the recovery, he pointed out that the approach is not an orthodox, formal policy of lenders but a phrase coined to both describe, and to some extent deride, the practice of extending and modifying loans.

“It’s really a policy of extend-and-wait- until-the-dust-settles,” Grinis says. “This industry is vulnerable to very dramatic cyclical swings, and anyone who has been in the business for the past couple of cycles recognizes that selling at the absolute bottom of the market, when there is no liquidity, oft en maximizes write-off s and minimizes recovery.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.