Bank/REO Case Studies
* UPDATE on our Sacramento County lender client. We successfully negotiated a 72% reduction on our client's commercial strip mall for a refund of over $30,000. The 2010/2011 Assessed Value of the property was originally $3.9MM and we successfully negotiated the 2010/2011 value to $1.1MM. Click here to see the letter from the Sacramento County Assessors Office.
The same Sacramento County lender received another notice from Sacramento County for another one its office properties.
--11/10/11: A lender client of ours engaged Pacific Union Property Advisors LLC to work on a portfolio of properties that it had foreclosed on in the Sacramento County in June 2010. These properties included retail, office and industrial in the $5MM to $40MM value range.
Foreclosures are a transfer of ownership; the County has to enroll a ‘market value’ for the property. This can prove more difficult when there is no purchase price and it is not an arms-length transaction. We worked with the County to enroll values that reflected the heavily depressed Sacramento market. One hurdle we faced with some properties was researching the actual rental amounts that were being paid compared to the lease rates.
Fortunately, Sacramento County understood the situation and was patient with our efforts in researching the history for each property. We discovered many of the leases on the properties and the rent rolls reflected 2005-2007 rents that were two to three times greater than the ‘market rate.’ Furthermore, the actual base rent and CAM charges collected were more than 50% of the values shown on the rent roll. We were able to save the bank roughly $30,000 annually on each property and greatly reduced the bank’s carrying costs while it worked on selling each property.
The same Sacramento County lender received another notice from Sacramento County for another one its office properties.
--11/10/11: A lender client of ours engaged Pacific Union Property Advisors LLC to work on a portfolio of properties that it had foreclosed on in the Sacramento County in June 2010. These properties included retail, office and industrial in the $5MM to $40MM value range.
Foreclosures are a transfer of ownership; the County has to enroll a ‘market value’ for the property. This can prove more difficult when there is no purchase price and it is not an arms-length transaction. We worked with the County to enroll values that reflected the heavily depressed Sacramento market. One hurdle we faced with some properties was researching the actual rental amounts that were being paid compared to the lease rates.
Fortunately, Sacramento County understood the situation and was patient with our efforts in researching the history for each property. We discovered many of the leases on the properties and the rent rolls reflected 2005-2007 rents that were two to three times greater than the ‘market rate.’ Furthermore, the actual base rent and CAM charges collected were more than 50% of the values shown on the rent roll. We were able to save the bank roughly $30,000 annually on each property and greatly reduced the bank’s carrying costs while it worked on selling each property.
