Insurance & Environmental Risks

Knowing when to cut your losses and walk a deal is a difficult skill to master.  In the construction loan context it is particularly difficult because a half completed building lacks the intended value anticipated on the loan.  On the other hand, cutting off disbursements causes a whole other set of risks including mechanic and

Last month, the Office of the Comptroller of the Currency published the Commercial Real Estate Lending handbook (August 2013).  The 128 page handbook gives guidance to bank examiners and bankers on risks inherent in commercial real estate (“CRE”) lending.  It replaces a 95 page version published in 1995 (and revised in 1998). For this

In many cities, urban growth now fills the farmland that once surrounded Navy and Air Force airfields.  Real estate development and finance near Navy and Air Force runways, however, requires special attention to a special set of restrictions called “AICUZ.”  These Department of Defense regulations severely restrict land located near military runways.  It

A recent and well-publicized lawsuit against a lender shows our appetite for headlines even extends to insurance issues.  Yes, insurance. My comment here is NOT about the merits of the lawsuit.  (I’m not evening giving you a link to it.) Instead, I marvel at the headline, and our ability to not focus on another very

This seems to be insurance week for me. Later this week, I’ll jump into a recent court case that recently hit the headlines. Today, however, I received an e-mail warning of the POSSIBLE unauthorized issuance of property insurance polices by “an unathorized third party purporting to represent the insurers listed below and not to

Latent (and even flaming) environmental risks play an important role in the monitoring of problem commercial real estate loans, in the decision to foreclosure and in the sale of foreclosed properties.

For many servicers and lenders, these risks are not fully understood – perhaps simply because in the "good economy" (prior to 2008), lenders relied

Effective February 23, 2011 (next month), the new 2011 ALTA Survey Standards become effective (download a copy).  (Link to ALTA website and current 2005 requirements.)

What could this mean for you?  How is this relevant for distressed commercial real estate?

  • REO purchasers could require a survey prepared according to these standards (in part, because

If you collateral is a green building, then a litany of unique issues and approaches come into play.

Recently I discussed this topic with Bill Weinberg – my green building expert.

Here are a few "high level" issues offered up by Bill to get our attention (prior blog) –

  • What is nature of

We’re investigating green buildings, from the perspective that some portion of the huge amount of distressed commercial real estate will include some green buildings.

Earlier this week, Bill Weinberg focused us on these preliminary topics:

  • is the collateral raw land or does it include improvements (buildings or other structures)?
  • operational and maintenance issues, including

Enough of MERS and technology – but, how about technology but from a different angle?

The amount of commercial real estate debt in distress is huge:

  • delinquent unpaid balances on CMBS loans exceeding $62 billion (October 2010), and heading toward $70-$80 billion by year end ’10 (per Realpoint)
  • delinquency ratio of 8.04% (September, 2010) (per