Closing an $18M Property Sale with Full Senior Lender Debt Payoff

This case study highlights Resolute’s role as Receiver for a residential healthcare facility located in north Phoenix, Arizona.

Situation

The 76,962 square-foot, 4-story commercial structure faced significant financial and operational challenges:

• Low Occupancy: The healthcare facility never reached full capacity, resulting in a significant revenue shortfall.
• Neglected Maintenance: Maintenance and upkeep of the facility were neglected over time, affecting the overall appeal and functionality of the property.
• Loan Default: Events of default occurred, and the borrower was unable to satisfy the $10M loan obligation.

Due to the challenges the business was facing, residents were evicted from the property and swift intervention was required.

Strategy

Resolute was appointed as Receiver by the court and began the engagement immediately. Primary tasks included:

• Property Securement: The property had been poorly maintained, events of break-ins had occurred, and items were reported stolen. Resolute acted swiftly and ensured that all property expenses were managed efficiently to keep the building running smoothly, while simultaneously addressing security concerns.
• Buyer Search: Resolute began efforts to find a suitable buyer for the facility. Through Resolute’s strategic marketing, multiple offers were received and given careful examination.
• Contract Negotiation: Initial negotiation led to property entering escrow, but the deal fell through when the prospective buyer failed to approve the purchase. Despite the setback, Resolute persisted in its
  search for buyers through strong outreach strategies.

Result

Resolute’s efforts yielded promising results:

• Successful Sale: Resolute identified a strong buyer willing to invest in the property. The property was sold for $18 million.
• Plaintiff Recovery: The lender, who had been facing the possibility of losing the loan amount, received a 100% recovery.  Resolute’s proactive approach to property management, persistent efforts to locate a buyer, and successful negotiation with buyer search led to favorable outcomes for all parties involved, ultimately maximizing recovery for the lender, and ensuring the property’s future.

About Resolute

Resolute is an independent business advisory firm focused on diagnosing and resolving the challenging financial and operational issues impacting middle market companies. Assessing the heartbeat of your company involves developing innovative, long-term recovery solutions when you need to secure, reorganize, and enhance financial assets and business operations. Courts, banks and bankruptcy attorneys trust the experts at Resolute to diagnose both short-term and long-term issues causing cash flow, operations, and management difficulties.

Contact Resolute at info@resolutecommercial.com or (480) 947-3321.