Commercial real estate brokers are going to court over the downturn in commercial real estate,but not for the reasons you might think.
Court-appointed receivers and banks, rather than real estate developers, likely are to be the biggest source of new business for brokers and property managers for the next few years.
But landing that business is proving to be a challenge as local brokers struggle to find an “in” to work with banks before an expected landslide of deals hits the market.
“This is the hot topic of the day,” said John Combs, founder of Santa Ana-based RiverRock Real Estate Group Inc., a commercial real estate management and leasing company. “There are a few sprinkles (of deals) now. But more properties (going back to the bank) are just around the corner.”
Combs’ company last year added a line of business that does consulting for distressed assets.
Combs is targeting banks, rather than individual distressed borrowers, he said.
“It’s not where the business is,” he said.
Lenders are expected to start taking back more distressed buildings from landlords, especially if prices continue to fall. That’s expected to happen as landlords have dropped rents on many commercial buildings to secure leases, while some others are holding partially vacant buildings.
For more on this story, read the Feb. 16 issue of the Business Journal.
