Court-Appointed Caretakers For Commercial Real Estate

There's one part of the commercial real estate market that is hot — court-appointed caretakers.

They are seeing business boom.

In every problem, there's an opportunity.

The old saw is right.

The tough real estate market is causing more and more owners of commercial real estate to return their properties to the lender.

In that distress are opportunities.

Frequently, distressed landlords put off necessary repairs. Buildings that go into foreclosure are typically poorly-taken care of.

Even the best kept buildings are hard to unload today.

The Los Angeles Times says:

With receivers in position to influence the market (and get paid well for it — their fees are often hundreds of dollars an hour), there is a lot of interest in becoming a receiver right now. Robert Mosier of the California Receivers Forum, an industry trade group, said that enrollment in a recent course the forum sponsored on the occupation was double what it was the last time it was offered, four years ago.

"There is an influx of people in the trade, and most of them are busy," said Mosier, who is president of Mosier & Co. in Costa Mesa.

Receivers have firsthand knowledge of what the bottom of a real estate cycle looks like. Like bankruptcy attorneys, receivers are often part of the clean-up crew called in when the market tanks.

The process usually starts when a property owner fails to make mortgage payments. The lender may begin foreclosure proceedings and ask a judge to appoint a receiver to take control of the property.

The job of the receiver, who answers to the judge, is to protect and operate the property during the foreclosure process. Though commercial real estate owners in foreclosure are not known to commit the kind of vandalism and theft sometimes seen when homeowners lose their houses, they may still inflict or allow damage to a property's value, Newport Beach real estate broker Stan Mullin said.