Disposing of distressed assets involves more than just offering notes or REO for sale-much more-as panelists pointed out recently at the Grubb & Ellis annual Deal-Making Summit, held in San Diego. The event brought together some 1,000 attendees for a host of lively panel discussions and other events.

The distressed assets panel (moderated by the author) focused on how service providers like Grubb & Ellis can best serve the interests of banks and other clients in disposing of distressed assets. Conrad Andersen, executive vice president and managing director of financial services asset management at Grubb, explained that those issues fall broadly into two categories: concerns regarding pre-foreclosure dispositions including note sales, and concerns regarding post-foreclosure REO sales.

One of the key decisions that banks and others holding distressed assets face is whether to dispose of an asset as-is or on an as-stabilized basis. Since stabilizing the property is likely to take some time, Andersen pointed out, service providers who recommend that approach need to be sure that it can be accomplished in a reasonable period of time and that the lender will receive an appropriate return.