CMBS Workouts are “Negotiations,” Just Not in the Normal Sense!
Clients often retain us, thinking we are going to “negotiate” a resolution to their workout scenario, just like we were negotiating with a bank, or with a car salesman; we make an offer, then the Special Servicer (Lender) makes a counter-offer. In rare instances, it can happen that way. But it is very rare indeed.
Most of the time, the Special Servicer enters the situation holding all the cards, and knowing that they do! It is up to us to work with our clients to find a solution that fits their needs and that we, collectively, believe stands a greater than zero chance of being approved by the Special Servicer’s loan committee.
If the initial offer we make to the Special Servicer is not accepted (it RARELY is), the Special Servicer will typically respond with a one sentence email “This offer is declined (rejected).” That is where our expertise comes into play, we have conversations with the Special Servicer trying to glean why the offer was rejected; was the number not high enough? Is the Special Servicer not approving that particular strategy in general? Is there some tweaking that can be done to the offer to make it acceptable?
The “negotiations” are fairly one-sided, we make an offer, dissect the response and adapt accordingly. That is why it is critical that you go into your workout situation with an experienced advocate at your side. We understand how the Special Servicers work and think, and we “level the playing field.” If you want to improve your odds of achieving a successful resolution for your loan, give us a call 817.756.7227.