GRAPEVINE, TX-What happens if a real estate asset is destined for the distressed or foreclosure heap? The owner can throw up his or her hands and walk away from it. Or the owner can take some of the advice and information offered by experts on the “Asset Management” panel during the RealShare Distressed Assets conference on Oct. 5.

During the Real Estate Forum and GlobeSt.com-sponsored conference, much of the discussion focused on distress in the system. But during the 50-minute “Asset Management” segment, panelists from all real estate sectors offered advice that, in the words of panel moderator Andy Sundgaard, senior vice president of business development for NorthMarq “could take back to the office and use tomorrow.”

Almost everyone was in agreement that the majority of distress could be found in areas such as Nevada, Arizona and Florida. As such, it was probably no surprise that the panelists are active value creators in these areas.

Cary Calkin, managing director of real estate asset services for Voit Real Estate Services noted that education is important when it comes to value creation. Much of his effort, in fact, is spent on educating owners on the realities of the marketplace versus owner expectation. Furthermore, he noted, when it comes to capital expenditures to a distressed asset, it’s a good idea to have a specific end-user in mind.

Helios AMC LLC managing director John Maute agreed with Calkin’s assessment, adding that another important aspect needing to be settled before capital expenditures is how debt on the asset is to be settled, whether through foreclosure, refinance or requesting any kind of modification. Putting cap-ex on real estate product with uncertain debt is “throwing good money after bad,” Maute commented.

John Hamilton, senior vice president of business development with Pyramid Hotel Group offered a different perspective. As his group manages and oversees hotels and hospitality, he suggested that the brand is hugely important when it comes to adding value to anything distressed. Just as important is paying attention to the people, and communicating with them throughout the process.

In underlining this point, Hamilton used the example of a distressed major brand hotel that was being taken over by other ownership. During the six-month process, communication with the hotel’s staff was frequent, as were stay bonuses. Given the people nature of hospitality, the last thing needed is employees bolting from an asset in fear because they don’t know what’s going on, Hamilton said.

Tanya Little, CEO with Hart Advisors Group LLC shared another story, that of an asset that had a 30-year tenant, which was about ready to go into distress because of maturing debt the owner was unable to refinance. The tenant was also ready to pick up and leave, meaning bye-bye cash flow.

Little said she and the owner approached the lender with a plan: The owner would convert the asset into a multi-use asset for a variety of tenants, rather than a single-use property. The lender was willing to work with the owner and, upon recreation of the asset into a multi-tenant one, the owner never looked back. “The asset is 100% occupied,” Little said. She added that, while her company offers more customized solutions, the example is a good one for out-of-the-box thinking when it comes to adding value.

Much of what the panelists predicted for the industry echoed much of RealShare’s other panelists. But the takeaways offered during “Asset Management” – educating ownership, solidifying the debt structure, thinking out of the box – can offer some tools to help add value to assets that are otherwise in distress.