I’m not going to sugar coat it. Whether you’re a bank with distressed commercial real estate assets on your balance sheet, or you’re a real estate investor/developer who purchased a foreclosed commercial property, creating a viable workout plan can be an uphill battle. Each passing month brings further physical deterioration of unmaintained assets.

 However, there are ways to stop the bleeding and minimize the costs of owning, maintaining and repositioning distressed and foreclosed commercial assets.

First, align yourself with a general commercial construction contractor familiar with completing distressed commercial properties. According to the fall 2009 issue of Development magazine, while hotels and retail properties are the most problematic in terms of default, foreclosure or bankruptcy, office distress is up 118 percent year-to-date in 2009 versus 2008. So make sure your commercial construction general contractor specializes in the asset class of your distressed holdings.

Next, make sure they can provide the following services, which are guaranteed to save you time and money during the workout process.

1. Expose discrepancies in actual work completed versus value of work paid to previous contractor and sub-contractors 
2. Provide cost estimates to complete the construction project 
3. Analyze damage to subject property due to elements and neglect and cost to repair damage
4. Develop subcontractor/vendor disbursement procedures with the title company
5. Intercede with appropriate jurisdictional authorities regarding sworn statements. Note that each town and state has a different set of jurisdictional authorities that a general contractor must work with.

Looking for more suggestions or information on how a general contractor can help an owner turn around a distressed property? Feel free to email us at info@Englewoodconstruction.com.