We would recommend Bill Fairchild to adapt option A to continue to fund deficit because despite the weak and oversupply market, the future cash flow of Busse Place after including the sale proceed is positive and profitable according to our pro forma, on the other hand, we also suggest Fairchild to renegotiate its CMBS loan service.
By implementing a rent cut strategy offering a $2 dollars cut to the Northwest Trust Company, and $1 dollar discount to Meineke & Bock and Riggs Executive Search Group, we are fully confident to absorb all three new leases given the grade A quality, competitive rent and green cost saving potential of Busses Place. Which would boost up the occupancy rate from 38.4% to 67.6% and reduce the deficit to $391 thousand dollars. Unlike Fairchild, we have the advantage of knowing the economics …show more content…
Fairchild should first demonstrate how the current 38.4% occupancy rate and the depressing market situation might lead to a possibility of a foreclosure to the loan servicer, then he should present his plan to attract new leases by lowering rent. After that he should insist how the current rate is impacting their break even coverage and request for a lower rate. We believe under the 2009 economics performance along with the risk of foreclosure, we have provided enough incentive for Midwest Asset Management to structure our loan.
Overall, the future prospect of Busse place have enough potential for Collin’s property to continue to fund the current deficit, meanwhile, rent have to be adjusted in order to attract new leases. On the other hand, Collin’s property should utilize the market downside to lower their interest
By implementing a rent cut strategy offering a $2 dollars cut to the Northwest Trust Company, and $1 dollar discount to Meineke & Bock and Riggs Executive Search Group, we are fully confident to absorb all three new leases given the grade A quality, competitive rent and green cost saving potential of Busses Place. Which would boost up the occupancy rate from 38.4% to 67.6% and reduce the deficit to $391 thousand dollars. Unlike Fairchild, we have the advantage of knowing the economics …show more content…
Fairchild should first demonstrate how the current 38.4% occupancy rate and the depressing market situation might lead to a possibility of a foreclosure to the loan servicer, then he should present his plan to attract new leases by lowering rent. After that he should insist how the current rate is impacting their break even coverage and request for a lower rate. We believe under the 2009 economics performance along with the risk of foreclosure, we have provided enough incentive for Midwest Asset Management to structure our loan.
Overall, the future prospect of Busse place have enough potential for Collin’s property to continue to fund the current deficit, meanwhile, rent have to be adjusted in order to attract new leases. On the other hand, Collin’s property should utilize the market downside to lower their interest