WASHINGTON, DC-Four Washington area firms are partnering to form a distressed asset consultancy called Distressed Asset Recovery Team. The four companies are Beers and Cutler, Delta Associates, Fore Consulting, and BlackwellAdvisors. The companies will still maintain their separate operations; DART will be a stand alone endeavor that leverages the principals’ skills and client contacts, Kevin Smith, founder and president of Blackwell Advisors, tells GlobeSt.com. DART will offer debt restructuring services, investment advisory services, valuation services, litigation and dispute resolution services and disposition services.

Principals from the four firms decided to embark on this offering because they realized they have complimentary skills–as well as a large number of borrower and lender clients that either have or will have distressed CRE assets, Greg Leisch, CEO of Delta Associates, tells GlobeSt.com.

He declines to discuss client specifics, such as contracts in the pipeline, other than to say the concept has been well received by each company’s respective client base. DART will be national in scope, although more than likely it will have a large number of DC area-based clients, given that the principals are based here. But not all clients will be local, Leisch says. “I was just on the phone with a New York bank that has an asset outside of Washington and that is not atypical of what we are doing.”

DC has survived relatively unscathed from the credit crunch and recession thus far–and will likely recover sooner than most markets, Leisch says. But there are definitely rocky times in store for the market: Leisch estimates that the DC area will see $1 billion in commercial real estate defaults by the end of Q1, primarily by developers that were unable to refinance. Currently a miniscule $350 million of assets have defaulted. By the end of the year, that number could reach $4 billion. Leisch bases his estimates on proprietary Delta Associates research.

Condos, multifamily and grocery-anchored retail will be the first to recover, Leisch says. Office and hotels will be the last, he predicts, some time in 2013.

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