The combination of 4 speaking engagements and working on 4 new (or revived) lending products buried me during the last several months. Fortunately, I’ve navigated the course, and it is a new year. It is time to take a look back at 2012, and step out with some comments on 2013. New commercial real estate
We’re in that part of the cycle where many of us are focusing on guaranty agreements, which run the full spectrum from full payment and performance guaranties to “bad boy” indemnification agreements (my recent comment).
One issue being litigated is the bad boy or recourse event tied to a breach of these types…
(More on the Collection Plate collection, which focuses on the recovery side of our work – the bottom line, nitty-gritty, work of getting "back" the money.)
Game #6 of the World Series (my Rangers v the now World Champion St. Louis Cardinals) gives the Rangers some painful pointers on "where" to improve for 2012: find someone, anyone, who can get a third strike – for the last out in an inning, for a win of the game, for a World Series …
Through my years of legal practice, this is a topic that lawyers love to banter about: "we don’t know what we [the law firm] know."
This comment is directed at knowledge management between lawyers at law firms. The problem, of course, is that lawyers are horrible at sharing their knowledge with each other. Much has been written about this topic – and I’m not tackling that one here.
I bring this up because the elephant in the room (ok, so I’m stuck on the elephant thing lately) is NOT simply sharing knowledge between lawyers on legal topics.
The elephant is this basic point:
- transactional lawyers often fail to educate litigators and bankruptcy lawyers on the business of the client, which can make dealing with distressed debt even more difficult (and a tough time even tougher for the client)
Sure, one approach is to rely upon the informal "tell’em about the client and the file" when the transactional lawyer brings the litigator (or BK lawyer) into the workout or defaulted loan.
I suggest an additional approach: offer up a series of fast-paced courses addressing the life of a loan from the perspective of three different classes of lenders –
- Portfolio lenders (including life insurance companies, pension fund advisors, FannieFreddie and unregulated bridge lenders); and
- Commercial Mortgage-Backed Security lenders ("CMBS").
A glossary of important terms and resources should be provided at the start of each session to facilitate understanding of the topics to be addressed.
The purpose of each session will be to educate bankruptcy and litigation lawyers and paralegals on loan origination, loan servicing, available remedies in the event of a default, and common problems associated with each particular type of lender. The goal is to better equip litigation and bankruptcy lawyers and paralegals in understanding commercial real estate finance (income producing property with debt secured by a first-priority lien on real estate) for the above-listed types of lenders.
To state the goal yet another way, the sessions will help bankruptcy and litigation lawyers to better understand (i) who their clients are: (ii) what their clients do; (iii) what remedies are available to their clients once they become involved in litigation: and (iv) common problems and solutions
Here’s an early version of the syllabus . . .
So, where are we in the "stages" of the current commercial real estate cycle? Near the end? Midway?
One way to measure is to examine "what" we’re doing – during our work day. This is not a measure of the market (number of defaults, etc.), but a look at our work – and "how" we …
As noted in my lengthy postings summarizing the recent 2010 CMSA January Conference in DC [Day 1 link; Day 2 link], over 1,000 commercial real estate professionals attended the conference – roughly 2X more than expected.
Why this unexpected attendance? Answer: All of us are looking for answers amidst the continuing liquidity problems in …
(When we attend industry conferences, we bring you along by blogging on topics of interest to us, with our comments as a bonus. This is the second in a series of posting relating to, and from, the 2010 CMSA January Conference. [Link to Day 1] Our blogs on other conferences are found [i] under the …