Financial Distress is a term we hear a lot lately, especially about commercial real estate. What does that term mean, exactly? If the building your company leases is in financial distress, does that mean its suffering? In pain? Hurting? About to fail, financially? Perhaps any of the above are correct.
Corporate executives would be wise to be on alert for some of the signs that most often signal that a building, and its landlord, may be experiencing financial distress, and / or may be headed for bankruptcy, foreclosure, tax sale, or worse!
Some of those signs include:
• Has building management or maintenance staff been cut?
• Is the landlord less responsive?
• Are capital projects being delayed?
• Is construction languishing in an incomplete state for extended time periods?
• Are repairs taking too long to complete?
• Does the building look as good as it did?
• Are the interior and exterior common areas being well maintained?
• Is the landscaping being maintained, trash being removed and parking areas being plowed of snow promptly?
• Are vacancies growing?
• Are smaller, less desirable, and / or transient tenants moving into the building?
* Are vendors no longer willing to work in the building because the landlord is not paying them on time or in-full?
• Has the landlord tried unsuccessfully to sell or refinance the building?
If you recognize any of the above signs, it’s time to get proactive. Consult your company’s attorney and real estate advisor, to understand your company’s rights and alternatives. Then, meet with your landlord to assess the situation, review alternatives, and set a course of action to protect your company’s interests, minimize disruption, and assured continued productivity.
About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations. Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America. By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.
In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate. The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery. Visit www.RealStrat.com. Acquire new ideas about commercial real estate at RealStrat’s blog at www.CorporateAdvisor.wordpress.com. Follow RealStrat and Andrew Zezas at http://www.Twitter.com/RealStrat.
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