"We are responding to a need from some of our clients and the marketplace in general," says Mark Caulton, Princeton Realty president and managing principal. "We anticipate demand for our services to grow over the next three years as we begin to see a significant increase in loan maturities from banks, insurance companies and the CMBS market."

Caulton notes that there is no clear exit strategy for property owners whose loans are on their way to maturing, especially given ongoing contraction in the debt markets and property values declining by as much as 20% in the past two years. However, he says some lenders are willing to extend the loan term for a year or two depending on the property, sponsorship, loan structure and other factors.

"From the borrower's perspective, that can mean resizing the loan to make sure the loan-to-value requirement is satisfied and other loan covenants are being adhered to," Caulton says. "To resize the loan, the borrower will typically have to pay down a portion of the principal, unless some other structure can be negotiated to the satisfaction of the lender."

Caulton, who spent five years as senior vice president with Bank of America's commercial real estate division, says his familiarity with financial institutions and their processes gives his firm an edge over other advisory firms and brokerages. "I do believe our team brings a unique skill set to this platform for our clients," he says.