Madison Development Group Consulting Services
Madison Development Group is not limited to condominium conversions; it is also a multi-service real estate asset management and development company. The three principals of Madison have a combined 88 years of unique real estate experience, both in development as well as troubled asset management and asset recovery. The varied experience and education of the three principals include accounting, finance, legal, audit procedure, regulatory compliance, loan documentation, underwriting, governmental approvals, fraud detection, loan monitoring, loan modification and restructure, asset recovery, foreclosure, receiverships and expert testimony. These, together with traditional real estate expertise (such as construction, renovation, marketing/sales, leasing, property management and association management), have been applied to resolve a number of portfolio issues for both private and institutional clients. Past consulting clients have included insurance companies, banks, savings & loan associations, investment banking groups, REIT’s, and private investment groups. Madison’s goal in providing its services to clients is to maximize value in the shortest period of time with as little capital investment as possible. Madison is available, on a fee basis, to provide consulting services to entities, including both lenders and developers, with troubled real estate asset situations.
Fees
When Madison is assigned a portfolio of assets for resolution, they are reviewed by the principals and executive committee made up of assorted disciplines. A business plan is designed to achieve clients’ objectives, which includes personnel needed and projected time line for completion. These plans are approved for execution by clients and then implemented. Each asset is priced for disposition in the plan according to time to complete and personnel needed to complete. Fees applied are industry standard for real estate functions needed to meet objectives. These fees will be spent by client regardless of the approach they choose in asset management or disposition. The advantage to using Madison is the continuity of the effort in working the portfolio as a whole while coordinating all disciplines needed to successfully complete objectives.
Past Troubled Asset Consulting Assignments
The following is a list of actual responsibilities with respect to assets assigned to the Madison principals in the past by an assortment of clients for workout, recovery or restructure services.
- Underwriting
- Restructured Workout
- Property Management
- Leasing
- Sales & Marketing
- Asset Recovery/Disposition
- Joint Venture Supervision
- Receivership
- Land Planning /Development
- Government Approval Procurement
- Debt Restructure
- Construction Supervision/Inspection
- Legal Documentation
- Portfolio Consulting
- Expert Witness
Functions Performed for Managed Assets
Construction/Rehab. – It maybe determined that an asset partially constructed will achieve a higher value if complete or renovated. Madison assembles a completion plan then applies personnel and complete project to prepare for disposition.
Property Management/Leasing – Properties may need to be stabilized from operating perspective and increase reserves to maximize disposition value.
Accounting/Reporting – Client receives uniform accounting and reports on each asset, quickly from date of assignment minimizing down time and allows for measuring progress quickly. Also allows client the opportunity to essentially get a mini audit of asset initially.
Asset Disposition/Sales/Marketing – In maximizing value on asset disposition, often you need to reach markets outside the immediate market. Madison explores all disposition avenues and aggressively pursues all opportunities for disposition.
Partnership Monitoring – On occasion it is appropriate to leave borrower in place to complete task. Madison reviews all completion plans with borrower and lender, then meets regularly with borrower and monitor on site work and efforts daily or weekly. As long as plan is making progress, work continues to disposition and loan payoff. If not, Madison steps in, recovers assets and completes the task, along with preparation of documents for extension.
Asset Recovery/Foreclosure – Madison with its legal assets together with the client works through all of the appropriate steps to gain adverse possession of collateral. Some borrowers do all they can to protract this process and sometimes damage the asset. Madison secures the collateral, secures cash flow and moves asset through process as quickly and efficiently as possible.
Debt Restructure/Renegotiation – Due to Madison’s experience in both banking and development, a restructure of debt can be imposed that takes into account the back concerns and the developer and allows a window to complete task and payoff loan. Madison proposes these restructures once they have met with borrower, reviewed the deal, and then would monitor process while completing, then documents the modification for completion.
Portfolio Consulting – In resolving problems that may exist in scale, Madison can propose a number of alternatives in terms of recovering assets or debt payoff. An entrepreneurial approach is imperative for maximizing value. This is time consuming and personnel intensive.
Why Madison?
Any lender runs the risk of having a loan turn into a non-performing asset. It can be caused by widespread market swings, poor underwriting, sporadic monitoring and field inspections or inadequate experience with product type of collateral. A loan can go bad for a number of reasons or a combination of reasons. However, Lenders are generally staffed and geared to loan money, not to own or recover an asset. In such a situation, a Lender can sometimes make rash judgments on how to resolve this issue without exploring all options, and may become focused solely on the bank’s issues, which will consequently limit the resolution options. When it comes to protecting real estate assets for your institution, choosing the right consultant is key, and time is of the essence. Often an assortment of outside vendors is assembled to solve short term issues in a hasty manner. By doing so, continuity is lost, the big picture or best resolution for a particular asset may be lost, and, often, the outside vendor is not sensitive to the Bank’s needs, due to its lack of background in those areas. A small problem can become a larger problem because the activity in a portfolio has not been focused on a single goal. Madison’s experience allows it to view the big picture and to assess an entire portfolio, and then determine the best options for each asset. Those options may be foreclosure, restructure, completion of development or a sell as-is; but, in all cases Madison considers, and is sensitive to, the parameters set by the Bank; and, most importantly, attempts to maximize value and minimize exposure, all while maintaining control of the process.
