Madison Title Agency | Madison Exchange | LeaseProbe | Real Diligence | Madison SPECS

Press Releases

Media Contact:
Christine Ziomek
chris@caryl.com
(201) 796-7788
May 24, 2010

Commercial Real Estate: The Story Behind The Numbers

Statistics Point to a Struggling Market, but That is Only Part of the Story, Say Executives of Madison Commercial Real Estate

LAKEWOOD, N.J., May 24, 2010 – That the commercial real estate market has struggled is "old news." The ongoing flow of national and regional market data from various sources provides the indicators, but what's the story behind those numbers? How are real estate people and their properties really being impacted, and what's the outlook? The expertise of the professionals at Madison Commercial Real Estate Services (MCRES) provides on-the-ground insight into what's happening now and what the market can expect going forward.

The Outlook…from a Cost Segregation Perspective
The reaction to the economy differs from market to market, and even from property to property, and hurdles remain with the economy still in a precarious position. "On a national level, from talking to people face-to-face, we are seeing what people are doing differently in terms of doing cost segregation studies," said Eli S. Loebenberg, CEO of MCRES affiliate Madison SPECS, LLC, founded in 2006.

"From the feedback we are getting, it is more challenging to sell in the marketplace," Loebenberg said. "For some, the tax benefits of cost segregation can be great, but there are many factors including fluctuating tax rates that can impact property values. To determine the best way to utilize cost segregation studies and fixed asset reviews to one's advantage, it’s important for CPAs and cost segregation experts to work together to identify the right solution.”

Loan Workouts…a Constantly Evolving Landscape
The landscape has been called a "minefield" of changing situations, interest rates, and other factors. "We are using our due diligence talents to help both borrowers and lenders navigate the minefield," said David I. Tesler, founder and CEO of MCRES affiliates LeaseProbe LLC and Real Diligence LLC. "One cannot engage in a loan workout until a very clear picture of the current and projected state of an asset is determined, to serve as the basis of negotiation. That negotiation can be a roller coaster ride—sometimes the banks act rationally and sometimes they don't. The expertise of a due diligence expert can shed light on the process.”

Asset Acquisition…Back to the Basics

In addition, the lending environment has changed dramatically in the past 18 months as the criteria for lending has tightened substantially. As a result, it takes a different approach and experienced professionals to be able to work with financing entities. Mr. Tesler recalls the "old days, when a borrower would put on their best suit, go to their banker and put together a package explaining why the bank should partner with them in buying a property. The methodology subsequently changed for a period of time, but now it’s time to go back to the basics for that borrower and put that suit back on, do their homework, and show that the numbers work."

Madison Commercial Real Estate Services, with more than $75 billion in transactions insured, is an umbrella organization that offers an array of specialty services for the commercial real estate market nationwide. These include:

  • Madison Title Agency, a nationwide title agency that handles searches, writes policies, manages transactions and provides closing and escrow services in all 50 states, as well as offering REO Solutions and Bulk Transaction Management Services;
  • Madison SPECS, offering expert cost segregation studies;
  • Madison Exchange, one of the nation’s leading Qualified Intermediaries handling §1031 exchanges;
  • LeaseProbe, producing commercial lease abstracts and handling Lease Administration and CAM Audits; and
  • Real Diligence, offering accurate and reliable financial due diligence for commercial real estate acquisitions as well as loan workout services and distressed asset acquisition support. 

###

About Madison Commercial Real Estate Services, LLC