Arcturus has significant experience helping clients with distressed assets – whether they be non-performing or impaired debt positions, compromised equity investments, or situations where some conflict, underperformance, litigation or other dynamic is occurring.
Our senior team has unique experience developed through extensive involvement in workouts and restructurings during previous down cycles. We understand that resolving operating issues, addressing challenging ownership relationships, restructuring or recapitalizing impaired investments, or working through contractual or other disputes, requires a unique combination of real estate expertise, thoughtful analysis, negotiating expertise, and a clear understanding of the objectives, incentives, motivations and personalities of the parties involved. Success often takes creativity, flexibility and persistence.
How We Help Our Clients:
Arcturus helps clients with equity positions turn around underperforming properties, restructure first mortgage and subordinated debt, recapitalize wholly-owned or joint ventured investments, and work through defaults on ground leases, development agreements or other contractual obligations. For clients with debt positions in distressed assets/situations, we help identify and assess strategic options, including formulating and executing workout, recapitalization, foreclosure, or other capital recovery strategies.
Debt Restructuring of Full-Service Hotel:
Arcturus provided restructuring advisory services for a lender to a distressed, 500+ key hotel located in a U.S. gateway city. The client held a junior debt position and was evaluating its alternatives, including whether to initiate a UCC foreclosure or accept a heavily discounted payoff from the borrower. Arcturus leveraged its unique combination of operating expertise and extensive restructuring experience to perform a detailed underwriting of the real estate and situation, providing the client with the confidence needed to pursue a more aggressive posture with the borrower. The effort resulted in the lender being repaid at par prior to the completion of the UCC foreclosure.
High-rise Condominium Evaluation:
Arcturus provided restructuring advisory services to a lender with exposure to a distressed, luxury condominium development project located in a U.S. gateway city. The client held a subordinated debt position in the project and was seeking a better understanding of the real estate as well as their strategic options. Arcturus’ residential development professionals assessed the borrower’s sales and marketing plan, monitored unit sales, and developed a capital recovery strategy that resulted in a negotiated payoff which exceeded the lender’s internal projections.