“There’s no dramatic interest rate change that’s going to come that’s going to save everybody.”
– Michael Cohen, Brighton Capital Advisors
As one can imagine, the relationship between borrowers and lenders — and subsequently special servicers — can be fraught with stress and anxiety in a new era of rising defaults, devaluations, and landlords giving back the keys to major assets.
Michael Cohen (not to be confused with that Michael Cohen, or with Colliers’ Michael Cohen) launched Brighton Capital Advisors when he recognized the growing need for deal restructuring, workouts and recapitalization solutions. His firm helps borrowers navigate unfamiliar territory: distress.
Cohen, who is based in Charlotte, sat down with Commercial Observer at CO’s commercial real estate investment forum in Dallas on April 18, and talked about the importance in understanding the sometimes tedious intricacies of CMBS loan servicing workouts, including modifications, extensions, discounted payoffs, and how to release cash trapped by the servicer.
Commercial Observer: Tell us about yourself and about your team: What challenges are you dealing with as the market volatility continues?
Michael Cohen: Brighton Capital Advisors is comprised of people that just recently left the CMBS industry, from every facet of origination to loan closings and special servicing. We’ve all talked about the distress in the marketplace, and there are a lot of complications from the borrower’s point of view to go through it, because there are a number of parties that they’re not privy to speaking directly with. And there’s a lot of tax and other fee implications that go with modifying loans.
Can you give us some examples of the deals you’re seeing in the marketplace?
We’re seeing a range of requests. We started this business three years ago during the COVID-19 pandemic, and we started getting requests for extensions. One example was an owner had a property in Midland, Texas, that was coming due and he needed an extension.
By going to the servicer, explaining to them why he was the best person and operator to continue to shepherd the property through, to show them where his fresh equity was coming in, and show a business plan, we were able to effectuate the change…
