Case Detail

Case Summary

Working at Workouts: Commercial Real Estate Debt in Distress

Case Number: 5-411-754, Year Published: 2012, Revision Date: October 16, 2012

HBS Number: KEL697

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Authors: Craig Furfine; Sam Schey

Key Concepts

Real Estate, Distressed Debt, Foreclosure, Workout

Abstract

In 2010 Drive Property Solutions, a special servicing firm in Chicago, had partnered with Spiner Capital to win an FDIC auction of distressed debt. Included in that auction was the defaulted mortgage note on Northwinds Community Crossing, a retail strip mall in suburban Savannah, Georgia, which had been in default since November 2009. Sam Schey, an asset manager at Drive, needed to decide how to maximize recoveries from the nonperforming loan.

Learning Objectives

After reading and analyzing the case, students should be able to:
• Evaluate and compare the various ways of resolving distressed debt
• Recognize how defaults on commercial real estate may present opportunities to investors

Number of Pages: 17

Extended Case Information

Teaching Areas: Finance, Real Estate

Teaching Note Available: Yes

Geographic: Savannah, Georgia, United States

Industry: Commercial Real Estate

Organization Name: Fictional

Decision Maker Position: Asset Manager

Decision Maker Gender: Male

Year of Case: 2010