Real Estate Receivers: Which Flavor Should You Choose?

Many types of professionals work on real estate receiverships: brokers, auctioneers, property managers, attorneys, contractors, developers, and specialized firms that blend all of these disciplines. The projects vary just as widely, from a small single-tenant property or block of undeveloped land to complex, partially finished developments with limited or no cash flow. To get the best results for the stakeholders, it is critical to match the real estate receiver to the project.

Start by Assessing the Project

The first step is to assess the project and identify the various roles the receiver may have to perform. A few questions frame the work:

• Does the project have cash flow to protect and enhance, or is the receiver expected to generate cash flow by securing new tenants and/or selling the property?
• Are the property management issues complex? Is the project in good shape, in need of repair, or stopped in mid-development? Does construction need to be completed?
• How critical are tenant relations?
• What type of management and financial reporting is required?
• Will there be a need to conduct discovery and other historical analysis of the project?
• Are the legal issues substantial and complex?
• Will a detailed strategic plan for the property be required?

How to Evaluate Your Receiver Options

Once you understand the duties and their relative importance, evaluate the receiver options against a clear set of guidelines. These are the standards we hold up when we take on receivership assignments:

Impartiality and independence are requirements. The primary role and background of your receiver may tell you a lot about their focus and how difficult it may be to change directions if you don't like the results. Make sure the receiver has no conflicts, not just with the various parties, but also in terms of owning, managing, or brokering for competing projects.

Cost-consciousness and focus are crucial. There is always some activity that can be done, but does it make sense given the nature, complexity, and expected tenure of the project?

Strategic focus is a must. Each project deserves an operational plan, but is the plan appropriate for the project and the stakeholders' interests? Does the receiver have experience with the property class?

Operational flexibility is important. Is the firm highly integrated or decentralized? Can the receiver embrace a flexible approach, doing only what is appropriate for the situation regardless of the focus of the receiver's own firm?

Why the Right Match Matters

Our team at Inglewood includes professionals with extensive and direct experience in all phases of real estate. We have analyzed, bought, sold, developed, and managed a wide variety of real estate projects, and we have directed and managed both large and small restructurings. We operate on a decentralized, low-overhead model that ensures our clients receive the best result at a favorable cost.