Key Trends in Dealing in Distressed Assets

MIAMI—Distressed assets may be dwindling in the Southeast, but there are still deals to be done and there may be another wave just ahead. Indeed, much of the commercial real estate industry is bracing for the CBMS maturities coming due in 2015 through 2017. Nelwyn Inman, a shareholder at Baker Donelson in Chattanooga, isn’t reassured by the decline in delinquencies in 2014 because she’s also witnessing many challenged borrowers.

“We continue to see many borrowers who are faced with the inability to reposition aging assets in the face of growing demands of new and renewal tenants in multifamily, office and retail properties,” Inman says. “With maturity defaults increasing as we head into 2015, we expect this issue to hamper what might otherwise be simple transitions into replacement financing on older properties at a time when the demand for updated space crosses paths with competitive pricing pressures in most secondary and tertiary markets in the Southeast.”