These factors coming together, he says, has made it somewhat easier to get a discounted payoff for a restructured loan. He specializes in negotiating these discounts, and finding ways to restructure the deal through debt and equity. Berlinghof says now that everyone has figured out the process for these deals, the worst enemy, today, is time.

“Everything has to come together right,” he says. “You can negotiate a payoff with a lender, but these discussions change from day to day. Until you actually come to the table, you don’t really know what you have.”

Tanya Little, CEO of the borrower advocate firm Hart Advisors Group, tells DAI that she also believes time is the biggest management-intensive problem faced by those seeking a restructure. From the first notification of the need for a restructure--to a successful deal--can take almost a year and a half, she says.

First, she says, it will take up to six months to get the loan transferred and started with a special servicer who can engage in restructuring negotiations--that’s just to start negotiations. Even if everyone involved then gets busy on the deal, the property’s dynamics are constantly changing. The market may be improving, tenants may vacate, or the borrower may run out of money to keep up the site, for example. “You’re constantly picking it up and looking at the property performance, is it better or worse,” Little says. “Both sides are doing this, and you’re facing constantly altering negotiations.”

The time can be extended, she says, because special servicers have been busy, pretty much living at their offices for the past couple of years. “Time can be a real problem,” Little says. “If the loan is already in trouble, time doesn’t usually make it better.”

Ann Hambly, co-CEO and founder of Grapevine, TX-based 1st Service Solutions, says it’s true that a borrower has to be proactive and notify their master servicer as soon as possible. The appraisal alone can take 90 days. “We tell every borrower that it’s at least a six- to 12-month process,” she says.

The other management-intensive issue in restructuring today, Hambly says, is the value question. However, she agrees that both sides seem to be more apt to come together today. “Three years ago when loans first started defaulting, the gap was just huge, everyone just extended and pretended,” she says. “Over time, we see that chasm getting smaller.”

She says borrowers have become better at knowing what they’re good at, and what they’re not, and are seeking help from advocates such as her firm to get the full menu of options. “If they come in prepared and know their options, and understand the requirements of the servicer, we can get a 95% successful outcome,” Hambly says. “That doesn’t mean it’s the best deal in the world, it’s going to be painful, that servicer is obligated to do whatever will result in the least amount of losses to bondholders. It has to be better offer than a foreclosure or sale.”

With the increase expected of CMBS maturities, Little from the Dallas-based Hart firm says she doesn’t see the timing or the value gap problems easing anytime soon. “Restructuring will continue to be management-intensive through at least 2017, surely for the flow of loans that are out there. I see these deals lasting for quite some time.”