There was a great article last Saturday in the San Francisco Chronicle about the necessary role of workout firms in helping distressed commercial property owners.  Breakwater Equity was featured as a workout firm that recently helped Peacock Gap, a well-known golf course client in the Bay Area.

Here is an interesting from the article by Ben Thypin, senior market analyst at research firm Real Capital Analytics:

“During boom times, commercial real estate owners and developers took out financing without realizing what they were getting into and what their rights or recourses were if things went bad,” Thypin said. “A commercial finance is very complex; there are often multiple loans, multiple stakeholders. To have someone who knows the market well and works on behalf of the owner puts them in a better position to negotiate a settlement that benefits them as much as possible.”

The article goes on to outline a case study of Peacock Gap, which Breakwater helped cram down from $12 million in loans to just $3.4 million, a 71 percent reduction.

Here is the link to the article. We would appreciate any comments you might have in the comments section below the article.  There are a number of uninformed readers commenting that don’t understand commercial real estate or the workout process and it would be great to add a more sophisticated dialogue to the mix.

Breakwater Equity just passed the $1 Billion dollar mark in workout project engagements. We thought it would be beneficial to our readers to look at some of the lessons learned while working through the myriad issues contained in over a billion dollars worth of commercial loans. Here are some of our favorites that come to mind.

Share all information about the deal early in the process, and keep sharing: Our ability to successfully negotiate with the various players in a workout is hugely influenced by the quantity and quality of the information we have about the situation. Many times clients unknowingly withhold vital information thinking that some pieces of information just simply weren’t relevant. Everything counts, so let us know. In addition, time is usually of the essence, so getting all of the pertinent documentation between the various parties is vital to us beginning the engagement.

Continue reading “Lessons Learned From $1 Billion in Loan Workout Engagements” »

Peacock Gap Golf Course

We recently had the chance to sit down and interview George Lee, the General Manager for several golf courses that were devastated by the recent economic downturn. George has a unique perspective on Breakwater’s successful commercial loan workout strategies having seen firsthand other groups try to achieve the same result but unable to navigate through the various workout minefields. Here are some excerpts from that interview.

What was your challenge at the time, and how did you end up hiring Breakwater Equity?
The owner I worked for had golf courses in Arizona and I had recommended we hire Breakwater Equity Partners to help perform a commercial loan workout on those properties. But based on advice from our attorneys at the time, the owner decided that we should attempt the workouts on our own with the help of our attorneys, and that experience did not go well.

Continue reading “Unique Insights From A Commercial Loan Workout Client-Interview with George Lee” »