The MacKenzie Companies and InspiRE CRE are addressing the market for distressed assets with a new strategic alliance, Asset Adversity Group, that combines InspiRE’s receivership experience with MacKenzie’s full spectrum of commercial real estate services.

The alliance is designed to support financial institutions, investors and other entities by helping stakeholders optimize asset value on underperforming commercial real estate assets in their portfolios. AAG allows lenders and investors to access a range of services relating to that market under one umbrella.

Lutherville-based MacKenzie, which is comprised of more than 200 real estate professionals, is a multi-disciplined and vertically integrated company offering brokerage, asset and property management, debt and equity placement, and construction management services; Marc Fischer, president and founder of InspiRE CRE, helps lenders navigate the financial, operational and legal challenges posed by distressed properties. When necessary, he also serves as a court-appointed receiver or owner’s representative.

“In 2020, when the pandemic triggered unprecedented disruption in the world, we started to have the conversation to position ourselves for the potential of servicing distressed assets and we began to discuss an alignment with InspiRE,” said Brendan Gill, president and COO of MacKenzie. “We were obviously pleased that, through significant government intervention, that scenario did not come to fruition at the time.

“However,” said Gill, “the industry is now encountering stiff headwinds and is expected to enter a radically different environment based on a confluence of factors, including the space reduction trend caused by hybrid and remote work, the dramatic rise of interest rates, steeper construction costs and the widely predicted tsunami of property refinancing that will occur at significantly higher rates.”

“Attorneys are often chosen to serve as court-appointed receivers,” said Fischer. “But commercial real estate experts are better equipped with the knowledge, skills and experience to optimize asset value for the lender and investor. A commercial real estate receivership requires the careful coordination of several disciplines, including receivership services, asset and property management, leasing and marketing, construction management and, eventually, disposition.

“Choosing Asset Adversity Group to oversee the entire asset recovery process,” he said, “also removes any inherent conflict of interest issues that may arise in situations where the receiver and the service provider are the same entity.”

Fischer predicted that the emerging distressed property story will peak during the next 12 to 18 months. “The prevailing wisdom indicated that the scenario should already be in full swing,” he said, “but certain building refinancings were pushed back, which served to delay financial stress. Locally owned and smaller private banks have the ability to keep distressed loans on their balance sheets much longer, and some of these properties have not yet come to light.”