Levin Re-Establishes Commercial REO Service in NJ.(Managing REO)

Byline: Jennifer Harmon

North Plainfield, NJ-The retail real estate industry in today's downcycle is facing the difficult reality of property defaults, foreclosures and bankruptcy proceedings. As a result, many lenders, financial institutions and bankruptcy trustees are taking back assets that often are in need of rapid financial and operational analysis, and immediate stabilization.

Levin Management Corp. here, currently responsible for a portfolio of some 80 properties totaling 12.5 million square feet, has managed properties for REO clients during market downturns throughout its near 60-year history. This year, the firm again has established its service to address the needs of the current environment, according to Matthew Harding, president and chief operating officer.

"Very few firms have the specific expertise and the practical experience with distressed properties to immediately be able to analyze a shopping center and keep it from losing tenants or otherwise going downhill," Mr. Harding said.

"Perhaps the loss of a major tenant devastated a property's rent roll or a buyer borrowed more than a center's current return can support. The short-term financing came due in a market where underwriting criteria have changed or an owner simply hit challenging times," he added. "Almost always, the fallout impacts the center - financially, physically or in the form of tenant relations - before it comes back into the lender's hands."

This can range from incomplete documentation and uncollected rent, to deferred maintenance, to unhappy tenants and a negative image in the community. Putting things in order can be a complex task, according to Mr. Harding.

"Many lenders possess a deep understanding of retail real estate, but lack the time and staff to address the many details involved in retail property management and leasing efficiently and in-house," he said.