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Receiverships","rss_summary":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"></span></p></div>","rss_body":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"><!--more--></span></p>\n<h2><strong>What Is a Receivership?</strong></h2>\n<p><span style=\"font-weight: bold;\">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style=\"font-weight: 400;\"> (a lender takes ownership of the project) </span></strong><span style=\"font-weight: bold;\">or a bankruptcy proceeding</span><strong><span style=\"font-weight: 400;\"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">Tenants <a href=\"/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know\" rel=\"noopener\">downsizing</a> or eliminating office spaces.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Rising interest rates.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Economic conditions, like recessions and <a href=\"/articles/cre-strategies-to-protect-against-inflation\" rel=\"noopener\">inflation</a>.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Poor <a href=\"/facility-management-services/facility-management\" rel=\"noopener\">building management</a>.</span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style=\"font-weight: 400;\"><br></span></strong><span style=\"font-weight: 400;\"></span></p>\n<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>\n<p><strong><span style=\"font-weight: 400;\">Upon entering a receivership, you may come across the following terms: </span></strong><span style=\"font-weight: bold;\">special servicer, master servicer, and receiver.</span></p>\n<p><strong><span style=\"font-weight: 400;\">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>\n<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>\n<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>\n<h3>1. Unclear Communication With Building Ownership</h3>\n<p>With the receiver in control of the building, <span style=\"font-weight: bold;\">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>\n<h3>2. Difficult Lease Negotiations</h3>\n<p>Because the receiver or servicer may not be aware of local <a href=\"/market-reports\" rel=\"noopener\">market trends</a>, <a href=\"/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations\" rel=\"noopener\" style=\"font-weight: bold;\">negotiating a new lease</a><span style=\"font-weight: bold;\"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>\n<h3>3. Lack of Capital For Improvement</h3>\n<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style=\"font-weight: bold;\">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href=\"/articles/the-common-area-provision-explained-why-it-matters-to-tenants\" rel=\"noopener\">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>\n<h2>Advice For Tenants Caught in Receiverships</h2>\n<p>As a tenant caught in a receivership, what can you do? <span style=\"font-weight: bold;\">Unfortunately, tenants cannot </span><a href=\"/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate\" rel=\"noopener\" style=\"font-weight: bold;\">end their leases</a><span style=\"font-weight: bold;\"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>\n<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>\n<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href=\"/contact\" rel=\"noopener\" style=\"font-weight: bold;\">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>\n<p style=\"text-align: center;\">{{cta('0dbda2c0-421b-40bd-88db-ad8a7325ff53')}}</p>\n<p style=\"text-align: center;\"><!--HubSpot Call-to-Action Code --> <span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\"> <span class=\"hs-cta-node hs-cta-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" id=\"7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" style=\"visibility: visible;\" data-hs-drop=\"true\"><a id=\"cta_button_6374170_6d9d8d74-010a-4704-b9fb-5cb12ce89039\" class=\"cta_button\" href=\"https://cta-service-cms2.hubspot.com/ctas/v2/public/cs/c/?cta_guid=6d9d8d74-010a-4704-b9fb-5cb12ce89039&signature=AAH58kFkSDfi5iVj1Y5V-Vw-H0_7QbyTLg&placement_guid=7da5fa7d-b366-4b54-b4b9-efd9c94acbea&canon=https%3A%2F%2Fwww.allegrorealty.com%2Funcategorized%2Flease-buyout-vs-sublease-analyzing-your-options%2F&portal_id=6374170&__hstc=218748358.75282537eba5618ddd18ee4c86545daa.1658941700937.1658941700937.1658941700937.1&__hssc=218748358.27.1658941700937&__hsfp=1561754925&hsutk=75282537eba5618ddd18ee4c86545daa\" target=\"_blank\" rel=\"noopener\" cta_dest_link=\"https://www.allegrorealty.com/subscribe/\"></a></span>\n<script charset=\"utf-8\" src=\"//js.hubspot.com/cta/current.js\"></script>\n<script type=\"text/javascript\">\n\t\thbspt.cta.load(6374170, '7da5fa7d-b366-4b54-b4b9-efd9c94acbea', {});\n\t\t</script>\n</span> <!-- end HubSpot Call-to-Action Code --></p>\n<!-- .entry-footer --></div>\n<!-- .entry-content -->","tag_ids":[77269686321,77269686339,77270935654,77270935659,77570820764],"topic_ids":[77269686321,77269686339,77270935654,77270935659,77570820764],"enable_google_amp_output_override":false,"generate_json_ld_enabled":true,"post_body":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"><!--more--></span></p>\n<h2><strong>What Is a Receivership?</strong></h2>\n<p><span style=\"font-weight: bold;\">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style=\"font-weight: 400;\"> (a lender takes ownership of the project) </span></strong><span style=\"font-weight: bold;\">or a bankruptcy proceeding</span><strong><span style=\"font-weight: 400;\"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">Tenants <a href=\"/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know\" rel=\"noopener\">downsizing</a> or eliminating office spaces.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Rising interest rates.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Economic conditions, like recessions and <a href=\"/articles/cre-strategies-to-protect-against-inflation\" rel=\"noopener\">inflation</a>.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Poor <a href=\"/facility-management-services/facility-management\" rel=\"noopener\">building management</a>.</span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style=\"font-weight: 400;\"><br></span></strong><span style=\"font-weight: 400;\"></span></p>\n<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>\n<p><strong><span style=\"font-weight: 400;\">Upon entering a receivership, you may come across the following terms: </span></strong><span style=\"font-weight: bold;\">special servicer, master servicer, and receiver.</span></p>\n<p><strong><span style=\"font-weight: 400;\">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>\n<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>\n<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>\n<h3>1. Unclear Communication With Building Ownership</h3>\n<p>With the receiver in control of the building, <span style=\"font-weight: bold;\">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>\n<h3>2. Difficult Lease Negotiations</h3>\n<p>Because the receiver or servicer may not be aware of local <a href=\"/market-reports\" rel=\"noopener\">market trends</a>, <a href=\"/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations\" rel=\"noopener\" style=\"font-weight: bold;\">negotiating a new lease</a><span style=\"font-weight: bold;\"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>\n<h3>3. Lack of Capital For Improvement</h3>\n<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style=\"font-weight: bold;\">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href=\"/articles/the-common-area-provision-explained-why-it-matters-to-tenants\" rel=\"noopener\">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>\n<h2>Advice For Tenants Caught in Receiverships</h2>\n<p>As a tenant caught in a receivership, what can you do? <span style=\"font-weight: bold;\">Unfortunately, tenants cannot </span><a href=\"/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate\" rel=\"noopener\" style=\"font-weight: bold;\">end their leases</a><span style=\"font-weight: bold;\"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>\n<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>\n<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href=\"/contact\" rel=\"noopener\" style=\"font-weight: bold;\">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>\n<p style=\"text-align: center;\">{{cta('0dbda2c0-421b-40bd-88db-ad8a7325ff53')}}</p>\n<p style=\"text-align: center;\"><!--HubSpot Call-to-Action Code --> <span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\"> <span class=\"hs-cta-node hs-cta-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" id=\"7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" style=\"visibility: visible;\" data-hs-drop=\"true\"><a id=\"cta_button_6374170_6d9d8d74-010a-4704-b9fb-5cb12ce89039\" class=\"cta_button\" href=\"https://cta-service-cms2.hubspot.com/ctas/v2/public/cs/c/?cta_guid=6d9d8d74-010a-4704-b9fb-5cb12ce89039&signature=AAH58kFkSDfi5iVj1Y5V-Vw-H0_7QbyTLg&placement_guid=7da5fa7d-b366-4b54-b4b9-efd9c94acbea&canon=https%3A%2F%2Fwww.allegrorealty.com%2Funcategorized%2Flease-buyout-vs-sublease-analyzing-your-options%2F&portal_id=6374170&__hstc=218748358.75282537eba5618ddd18ee4c86545daa.1658941700937.1658941700937.1658941700937.1&__hssc=218748358.27.1658941700937&__hsfp=1561754925&hsutk=75282537eba5618ddd18ee4c86545daa\" target=\"_blank\" rel=\"noopener\" cta_dest_link=\"https://www.allegrorealty.com/subscribe/\"></a></span>\n<script charset=\"utf-8\" src=\"//js.hubspot.com/cta/current.js\"></script>\n<script type=\"text/javascript\">\n\t\thbspt.cta.load(6374170, '7da5fa7d-b366-4b54-b4b9-efd9c94acbea', {});\n\t\t</script>\n</span> <!-- end HubSpot Call-to-Action Code --></p>\n<!-- .entry-footer --></div>\n<!-- .entry-content -->","post_summary":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"></span></p></div>","blog_post_schedule_task_uid":null,"blog_publish_to_social_media_task":"DONE_NOT_SENT","blog_publish_instant_email_task_uid":null,"blog_publish_instant_email_campaign_id":null,"blog_publish_instant_email_retry_count":0,"keywords":[],"composition_id":0,"header":null,"published_at":1680180840745,"password":null,"head_html":null,"footer_html":null,"attached_stylesheets":[],"enable_domain_stylesheets":null,"include_default_custom_css":null,"layout_sections":{},"past_mab_experiment_ids":[],"featured_image_alt_text":"commercial real estate buildings","enable_layout_stylesheets":null,"tweet":null,"tweet_at":null,"campaign_name":"Blog","campaign_utm":"Blog","meta_keywords":null,"meta_description":"Tenants caught in receiverships may face several challenges. Read on to discover what a receivership is and the most common obstacles associated with one.","tweet_immediately":false,"publish_immediately":false,"security_state":"NONE","scheduled_update_date":0,"placement_guids":[],"property_for_dynamic_page_title":null,"property_for_dynamic_page_slug":null,"property_for_dynamic_page_meta_description":null,"property_for_dynamic_page_featured_image":null,"property_for_dynamic_page_canonical_url":null,"preview_image_src":null,"legacy_blog_tabid":null,"legacy_post_guid":"","performable_variation_letter":null,"style_override_id":null,"has_user_changes":true,"css":{},"css_text":"","unpublished_at":0,"published_by_id":13028929,"allowed_slug_conflict":false,"link_rel_canonical_url":null,"page_redirected":false,"page_expiry_enabled":false,"page_expiry_date":null,"page_expiry_redirect_id":null,"page_expiry_redirect_url":null,"deleted_by":null,"state_when_deleted":null,"cloned_from":104823468545,"staged_from":null,"personas":[],"compose_body":null,"featured_image":"https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/Blog%20Images/receiverships%20featured%20image.jpg","featured_image_width":1000,"featured_image_height":667,"publish_timezone_offset":null,"theme_settings_values":null,"last_edit_session_id":null,"last_edit_update_id":null}, jsonBodyAsString={"public_access_rules_enabled":false,"public_access_rules":[],"use_featured_image":true,"html_title":"3 Challenges for Tenants Caught in Receiverships","rss_summary":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"></span></p></div>","rss_body":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"><!--more--></span></p>\n<h2><strong>What Is a Receivership?</strong></h2>\n<p><span style=\"font-weight: bold;\">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style=\"font-weight: 400;\"> (a lender takes ownership of the project) </span></strong><span style=\"font-weight: bold;\">or a bankruptcy proceeding</span><strong><span style=\"font-weight: 400;\"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">Tenants <a href=\"/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know\" rel=\"noopener\">downsizing</a> or eliminating office spaces.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Rising interest rates.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Economic conditions, like recessions and <a href=\"/articles/cre-strategies-to-protect-against-inflation\" rel=\"noopener\">inflation</a>.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Poor <a href=\"/facility-management-services/facility-management\" rel=\"noopener\">building management</a>.</span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style=\"font-weight: 400;\"><br></span></strong><span style=\"font-weight: 400;\"></span></p>\n<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>\n<p><strong><span style=\"font-weight: 400;\">Upon entering a receivership, you may come across the following terms: </span></strong><span style=\"font-weight: bold;\">special servicer, master servicer, and receiver.</span></p>\n<p><strong><span style=\"font-weight: 400;\">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>\n<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>\n<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>\n<h3>1. Unclear Communication With Building Ownership</h3>\n<p>With the receiver in control of the building, <span style=\"font-weight: bold;\">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>\n<h3>2. Difficult Lease Negotiations</h3>\n<p>Because the receiver or servicer may not be aware of local <a href=\"/market-reports\" rel=\"noopener\">market trends</a>, <a href=\"/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations\" rel=\"noopener\" style=\"font-weight: bold;\">negotiating a new lease</a><span style=\"font-weight: bold;\"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>\n<h3>3. Lack of Capital For Improvement</h3>\n<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style=\"font-weight: bold;\">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href=\"/articles/the-common-area-provision-explained-why-it-matters-to-tenants\" rel=\"noopener\">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>\n<h2>Advice For Tenants Caught in Receiverships</h2>\n<p>As a tenant caught in a receivership, what can you do? <span style=\"font-weight: bold;\">Unfortunately, tenants cannot </span><a href=\"/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate\" rel=\"noopener\" style=\"font-weight: bold;\">end their leases</a><span style=\"font-weight: bold;\"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>\n<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>\n<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href=\"/contact\" rel=\"noopener\" style=\"font-weight: bold;\">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>\n<p style=\"text-align: center;\">{{cta('0dbda2c0-421b-40bd-88db-ad8a7325ff53')}}</p>\n<p style=\"text-align: center;\"><!--HubSpot Call-to-Action Code --> <span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\"> <span class=\"hs-cta-node hs-cta-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" id=\"7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" style=\"visibility: visible;\" data-hs-drop=\"true\"><a id=\"cta_button_6374170_6d9d8d74-010a-4704-b9fb-5cb12ce89039\" class=\"cta_button\" href=\"https://cta-service-cms2.hubspot.com/ctas/v2/public/cs/c/?cta_guid=6d9d8d74-010a-4704-b9fb-5cb12ce89039&signature=AAH58kFkSDfi5iVj1Y5V-Vw-H0_7QbyTLg&placement_guid=7da5fa7d-b366-4b54-b4b9-efd9c94acbea&canon=https%3A%2F%2Fwww.allegrorealty.com%2Funcategorized%2Flease-buyout-vs-sublease-analyzing-your-options%2F&portal_id=6374170&__hstc=218748358.75282537eba5618ddd18ee4c86545daa.1658941700937.1658941700937.1658941700937.1&__hssc=218748358.27.1658941700937&__hsfp=1561754925&hsutk=75282537eba5618ddd18ee4c86545daa\" target=\"_blank\" rel=\"noopener\" cta_dest_link=\"https://www.allegrorealty.com/subscribe/\"></a></span>\n<script charset=\"utf-8\" src=\"//js.hubspot.com/cta/current.js\"></script>\n<script type=\"text/javascript\">\n\t\thbspt.cta.load(6374170, '7da5fa7d-b366-4b54-b4b9-efd9c94acbea', {});\n\t\t</script>\n</span> <!-- end HubSpot Call-to-Action Code --></p>\n<!-- .entry-footer --></div>\n<!-- .entry-content -->","tag_ids":[77269686321,77269686339,77270935654,77270935659,77570820764],"topic_ids":[77269686321,77269686339,77270935654,77270935659,77570820764],"enable_google_amp_output_override":false,"generate_json_ld_enabled":true,"post_body":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"><!--more--></span></p>\n<h2><strong>What Is a Receivership?</strong></h2>\n<p><span style=\"font-weight: bold;\">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style=\"font-weight: 400;\"> (a lender takes ownership of the project) </span></strong><span style=\"font-weight: bold;\">or a bankruptcy proceeding</span><strong><span style=\"font-weight: 400;\"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">Tenants <a href=\"/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know\" rel=\"noopener\">downsizing</a> or eliminating office spaces.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Rising interest rates.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Economic conditions, like recessions and <a href=\"/articles/cre-strategies-to-protect-against-inflation\" rel=\"noopener\">inflation</a>.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">Poor <a href=\"/facility-management-services/facility-management\" rel=\"noopener\">building management</a>.</span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style=\"font-weight: 400;\"><br></span></strong><span style=\"font-weight: 400;\"></span></p>\n<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>\n<p><strong><span style=\"font-weight: 400;\">Upon entering a receivership, you may come across the following terms: </span></strong><span style=\"font-weight: bold;\">special servicer, master servicer, and receiver.</span></p>\n<p><strong><span style=\"font-weight: 400;\">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>\n<ul>\n<li><strong><span style=\"font-weight: 400;\">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>\n<li><strong><span style=\"font-weight: 400;\">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>\n</ul>\n<p><strong><span style=\"font-weight: 400;\">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>\n<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>\n<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>\n<h3>1. Unclear Communication With Building Ownership</h3>\n<p>With the receiver in control of the building, <span style=\"font-weight: bold;\">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>\n<h3>2. Difficult Lease Negotiations</h3>\n<p>Because the receiver or servicer may not be aware of local <a href=\"/market-reports\" rel=\"noopener\">market trends</a>, <a href=\"/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations\" rel=\"noopener\" style=\"font-weight: bold;\">negotiating a new lease</a><span style=\"font-weight: bold;\"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>\n<h3>3. Lack of Capital For Improvement</h3>\n<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style=\"font-weight: bold;\">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href=\"/articles/the-common-area-provision-explained-why-it-matters-to-tenants\" rel=\"noopener\">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>\n<h2>Advice For Tenants Caught in Receiverships</h2>\n<p>As a tenant caught in a receivership, what can you do? <span style=\"font-weight: bold;\">Unfortunately, tenants cannot </span><a href=\"/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate\" rel=\"noopener\" style=\"font-weight: bold;\">end their leases</a><span style=\"font-weight: bold;\"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>\n<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>\n<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href=\"/contact\" rel=\"noopener\" style=\"font-weight: bold;\">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>\n<p style=\"text-align: center;\">{{cta('0dbda2c0-421b-40bd-88db-ad8a7325ff53')}}</p>\n<p style=\"text-align: center;\"><!--HubSpot Call-to-Action Code --> <span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\"> <span class=\"hs-cta-node hs-cta-7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" id=\"7da5fa7d-b366-4b54-b4b9-efd9c94acbea\" style=\"visibility: visible;\" data-hs-drop=\"true\"><a id=\"cta_button_6374170_6d9d8d74-010a-4704-b9fb-5cb12ce89039\" class=\"cta_button\" href=\"https://cta-service-cms2.hubspot.com/ctas/v2/public/cs/c/?cta_guid=6d9d8d74-010a-4704-b9fb-5cb12ce89039&signature=AAH58kFkSDfi5iVj1Y5V-Vw-H0_7QbyTLg&placement_guid=7da5fa7d-b366-4b54-b4b9-efd9c94acbea&canon=https%3A%2F%2Fwww.allegrorealty.com%2Funcategorized%2Flease-buyout-vs-sublease-analyzing-your-options%2F&portal_id=6374170&__hstc=218748358.75282537eba5618ddd18ee4c86545daa.1658941700937.1658941700937.1658941700937.1&__hssc=218748358.27.1658941700937&__hsfp=1561754925&hsutk=75282537eba5618ddd18ee4c86545daa\" target=\"_blank\" rel=\"noopener\" cta_dest_link=\"https://www.allegrorealty.com/subscribe/\"></a></span>\n<script charset=\"utf-8\" src=\"//js.hubspot.com/cta/current.js\"></script>\n<script type=\"text/javascript\">\n\t\thbspt.cta.load(6374170, '7da5fa7d-b366-4b54-b4b9-efd9c94acbea', {});\n\t\t</script>\n</span> <!-- end HubSpot Call-to-Action Code --></p>\n<!-- .entry-footer --></div>\n<!-- .entry-content -->","post_summary":"<div class=\"entry-header table\">\n<div class=\"cell\"><!--\n\t\t\t<div class=\"entry-meta\">\n\t\t\t\t<p>Posted on August 26, 2021 by Tim Anderson</p>\n\t\t\t</div>\n--></div>\n</div>\n<div class=\"entry-content\">\n<p><span style=\"font-weight: 400;\">As an office building tenant, you may not understand the concept of a <a href=\"/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project).\" rel=\"noopener\">receivership</a> until you’re caught in one. </span></p>\n<p><span style=\"font-weight: 400;\">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>\n<p><span style=\"font-weight: 400;\">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>\n<p><span style=\"font-weight: 400;\"></span></p></div>","blog_post_schedule_task_uid":null,"blog_publish_to_social_media_task":"DONE_NOT_SENT","blog_publish_instant_email_task_uid":null,"blog_publish_instant_email_campaign_id":null,"blog_publish_instant_email_retry_count":0,"keywords":[],"composition_id":0,"header":null,"published_at":1680180840745,"password":null,"head_html":null,"footer_html":null,"attached_stylesheets":[],"enable_domain_stylesheets":null,"include_default_custom_css":null,"layout_sections":{},"past_mab_experiment_ids":[],"featured_image_alt_text":"commercial real estate buildings","enable_layout_stylesheets":null,"tweet":null,"tweet_at":null,"campaign_name":"Blog","campaign_utm":"Blog","meta_keywords":null,"meta_description":"Tenants caught in receiverships may face several challenges. 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Read on to discover what a receivership is and the most common obstacles associated with one., metaKeywords=null, migratedLegacyPost=false, name=3 Challenges for Tenants Caught in Receiverships, nextPostFeaturedImage=null, nextPostFeaturedImageAltText=null, nextPostName=null, nextPostSlug=null, onlyIdSlug=false, pageExpiryDate=null, pageExpiryDateColumn=null, pageExpiryRedirectId=null, pageExpiryRedirectIdColumn=null, pageExpiryRedirectUrl=null, pageExpiryRedirectUrlColumn=null, pageRedirectedColumn=false, pageTitle=3 Challenges for Tenants Caught in Receiverships, parentBlog='Articles' blog (77566846315) of hub id 6374170, password=null, passwordColumn=null, pastMabExperimentIds=[], performableGuid=null, performableVariationLetter=null, permissionedObjectType=Optional[BLOG_POST], personas=[], placementGuids=[], portableKey=null, portalId=6374170, position=null, postBody=<div class="entry-header table">
<div class="cell"><!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
--></div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
<p><span style="font-weight: 400;"><!--more--></span></p>
<h2><strong>What Is a Receivership?</strong></h2>
<p><span style="font-weight: bold;">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style="font-weight: 400;"> (a lender takes ownership of the project) </span></strong><span style="font-weight: bold;">or a bankruptcy proceeding</span><strong><span style="font-weight: 400;"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">Tenants <a href="/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know" rel="noopener">downsizing</a> or eliminating office spaces.</span></strong></li>
<li><strong><span style="font-weight: 400;">Rising interest rates.</span></strong></li>
<li><strong><span style="font-weight: 400;">Economic conditions, like recessions and <a href="/articles/cre-strategies-to-protect-against-inflation" rel="noopener">inflation</a>.</span></strong></li>
<li><strong><span style="font-weight: 400;">Poor <a href="/facility-management-services/facility-management" rel="noopener">building management</a>.</span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style="font-weight: 400;"><br></span></strong><span style="font-weight: 400;"></span></p>
<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>
<p><strong><span style="font-weight: 400;">Upon entering a receivership, you may come across the following terms: </span></strong><span style="font-weight: bold;">special servicer, master servicer, and receiver.</span></p>
<p><strong><span style="font-weight: 400;">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>
<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>
<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>
<h3>1. Unclear Communication With Building Ownership</h3>
<p>With the receiver in control of the building, <span style="font-weight: bold;">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>
<h3>2. Difficult Lease Negotiations</h3>
<p>Because the receiver or servicer may not be aware of local <a href="/market-reports" rel="noopener">market trends</a>, <a href="/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations" rel="noopener" style="font-weight: bold;">negotiating a new lease</a><span style="font-weight: bold;"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>
<h3>3. Lack of Capital For Improvement</h3>
<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style="font-weight: bold;">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href="/articles/the-common-area-provision-explained-why-it-matters-to-tenants" rel="noopener">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>
<h2>Advice For Tenants Caught in Receiverships</h2>
<p>As a tenant caught in a receivership, what can you do? <span style="font-weight: bold;">Unfortunately, tenants cannot </span><a href="/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate" rel="noopener" style="font-weight: bold;">end their leases</a><span style="font-weight: bold;"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>
<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>
<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href="/contact" rel="noopener" style="font-weight: bold;">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>
<p style="text-align: center;">{{cta('0dbda2c0-421b-40bd-88db-ad8a7325ff53')}}</p>
<p style="text-align: center;"><!--HubSpot Call-to-Action Code --> <span class="hs-cta-wrapper" id="hs-cta-wrapper-7da5fa7d-b366-4b54-b4b9-efd9c94acbea"> <span class="hs-cta-node hs-cta-7da5fa7d-b366-4b54-b4b9-efd9c94acbea" id="7da5fa7d-b366-4b54-b4b9-efd9c94acbea" style="visibility: visible;" data-hs-drop="true"><a id="cta_button_6374170_6d9d8d74-010a-4704-b9fb-5cb12ce89039" class="cta_button" href="https://cta-service-cms2.hubspot.com/ctas/v2/public/cs/c/?cta_guid=6d9d8d74-010a-4704-b9fb-5cb12ce89039&signature=AAH58kFkSDfi5iVj1Y5V-Vw-H0_7QbyTLg&placement_guid=7da5fa7d-b366-4b54-b4b9-efd9c94acbea&canon=https%3A%2F%2Fwww.allegrorealty.com%2Funcategorized%2Flease-buyout-vs-sublease-analyzing-your-options%2F&portal_id=6374170&__hstc=218748358.75282537eba5618ddd18ee4c86545daa.1658941700937.1658941700937.1658941700937.1&__hssc=218748358.27.1658941700937&__hsfp=1561754925&hsutk=75282537eba5618ddd18ee4c86545daa" target="_blank" rel="noopener" cta_dest_link="https://www.allegrorealty.com/subscribe/"></a></span>
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<!-- .entry-content -->, postBodyRss=<div class="entry-header table">
<div class="cell"><!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
--></div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
<p><span style="font-weight: 400;"><!--more--></span></p>
<h2><strong>What Is a Receivership?</strong></h2>
<p><span style="font-weight: bold;">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style="font-weight: 400;"> (a lender takes ownership of the project) </span></strong><span style="font-weight: bold;">or a bankruptcy proceeding</span><strong><span style="font-weight: 400;"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">Tenants <a href="/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know" rel="noopener">downsizing</a> or eliminating office spaces.</span></strong></li>
<li><strong><span style="font-weight: 400;">Rising interest rates.</span></strong></li>
<li><strong><span style="font-weight: 400;">Economic conditions, like recessions and <a href="/articles/cre-strategies-to-protect-against-inflation" rel="noopener">inflation</a>.</span></strong></li>
<li><strong><span style="font-weight: 400;">Poor <a href="/facility-management-services/facility-management" rel="noopener">building management</a>.</span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style="font-weight: 400;"><br></span></strong><span style="font-weight: 400;"></span></p>
<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>
<p><strong><span style="font-weight: 400;">Upon entering a receivership, you may come across the following terms: </span></strong><span style="font-weight: bold;">special servicer, master servicer, and receiver.</span></p>
<p><strong><span style="font-weight: 400;">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>
<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>
<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>
<h3>1. Unclear Communication With Building Ownership</h3>
<p>With the receiver in control of the building, <span style="font-weight: bold;">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>
<h3>2. Difficult Lease Negotiations</h3>
<p>Because the receiver or servicer may not be aware of local <a href="/market-reports" rel="noopener">market trends</a>, <a href="/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations" rel="noopener" style="font-weight: bold;">negotiating a new lease</a><span style="font-weight: bold;"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>
<h3>3. Lack of Capital For Improvement</h3>
<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style="font-weight: bold;">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href="/articles/the-common-area-provision-explained-why-it-matters-to-tenants" rel="noopener">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>
<h2>Advice For Tenants Caught in Receiverships</h2>
<p>As a tenant caught in a receivership, what can you do? <span style="font-weight: bold;">Unfortunately, tenants cannot </span><a href="/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate" rel="noopener" style="font-weight: bold;">end their leases</a><span style="font-weight: bold;"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>
<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>
<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href="/contact" rel="noopener" style="font-weight: bold;">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>
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<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
</div>, postFeaturedImageIfEnabled=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/Blog%20Images/receiverships%20featured%20image.jpg, postListContent=<div class="entry-header table">
<div class="cell">
<!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
-->
</div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
</div>, postListSummaryFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/Blog%20Images/receiverships%20featured%20image.jpg, postRssContent=<div class="entry-header table">
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<!--
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<p>Posted on August 26, 2021 by Tim Anderson</p>
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</div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
</div>, postRssSummaryFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/Blog%20Images/receiverships%20featured%20image.jpg, postSummary=<div class="entry-header table">
<div class="cell"><!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
--></div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
<p><span style="font-weight: 400;"></span></p></div>, postSummaryRss=<div class="entry-header table">
<div class="cell">
<!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
-->
</div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
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<div class="cell"><!--
<div class="entry-meta">
<p>Posted on August 26, 2021 by Tim Anderson</p>
</div>
--></div>
</div>
<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
<p><span style="font-weight: 400;"><!--more--></span></p>
<h2><strong>What Is a Receivership?</strong></h2>
<p><span style="font-weight: bold;">A commercial real estate receivership is an affordable alternative to a foreclosure proceeding</span><strong><span style="font-weight: 400;"> (a lender takes ownership of the project) </span></strong><span style="font-weight: bold;">or a bankruptcy proceeding</span><strong><span style="font-weight: 400;"> (a trustee takes control of the project). Some common causes of receiverships include:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">Tenants <a href="/articles/what-is-disposition-in-commercial-real-estate-here-are-the-5-phases-you-should-know" rel="noopener">downsizing</a> or eliminating office spaces.</span></strong></li>
<li><strong><span style="font-weight: 400;">Rising interest rates.</span></strong></li>
<li><strong><span style="font-weight: 400;">Economic conditions, like recessions and <a href="/articles/cre-strategies-to-protect-against-inflation" rel="noopener">inflation</a>.</span></strong></li>
<li><strong><span style="font-weight: 400;">Poor <a href="/facility-management-services/facility-management" rel="noopener">building management</a>.</span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">The receiver is a neutral third party appointed by the state or federal court who controls either all of an entity’s assets or only specific assets. In general, a receiver may be appointed to sell assets, streamline operations, maintain a property, and/or find alternatives to bankruptcy.</span></strong><strong><span style="font-weight: 400;"><br></span></strong><span style="font-weight: 400;"></span></p>
<h2><strong>What’s the Difference Between a Special Servicer, Master Servicer, and Receiver?</strong></h2>
<p><strong><span style="font-weight: 400;">Upon entering a receivership, you may come across the following terms: </span></strong><span style="font-weight: bold;">special servicer, master servicer, and receiver.</span></p>
<p><strong><span style="font-weight: 400;">While the three may seem similar, they play different roles in commercial real estate receiverships. We detail them below:</span></strong></p>
<ul>
<li><strong><span style="font-weight: 400;">A <strong>special servicer</strong> manages assets when a commercial mortgage-backed security (CMBS) loan goes into default.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>master servicer</strong> services the loan unless the borrower defaults.</span></strong></li>
<li><strong><span style="font-weight: 400;">A <strong>receiver</strong> oversees assets when a building owner defaults on a traditional loan or forecloses. </span></strong></li>
</ul>
<p><strong><span style="font-weight: 400;">Overall, these factors will determine which type of third party you’ll be working with. <br></span></strong></p>
<h2><strong>Challenges For Tenants Caught in Receiverships</strong></h2>
<p>There’s no doubt that receiverships can cause challenges for all involved parties—especially tenants. Below, we detail some of the top hurdles you may face if your building goes into receivership. </p>
<h3>1. Unclear Communication With Building Ownership</h3>
<p>With the receiver in control of the building, <span style="font-weight: bold;">it may be difficult to contact building ownership</span>. This is because tenants will have to go through additional parties, including the receiver or servicer, to ultimately reach building ownership.</p>
<h3>2. Difficult Lease Negotiations</h3>
<p>Because the receiver or servicer may not be aware of local <a href="/market-reports" rel="noopener">market trends</a>, <a href="/articles/tips-for-leveraging-commercial-real-estate-lease-negotiations" rel="noopener" style="font-weight: bold;">negotiating a new lease</a><span style="font-weight: bold;"> can also pose a challenge. </span>For example, a receiver from Chicago might not realize the average cost of a lease in a Class A building in a smaller city, like Tulsa.</p>
<h3>3. Lack of Capital For Improvement</h3>
<p>Because the owners of the building in receivership are dealing with bankruptcy or foreclosure, <span style="font-weight: bold;">there’s usually not enough—or any—capital to invest in the building.</span> This can delay or completely cancel plans to upgrade building <a href="/articles/the-common-area-provision-explained-why-it-matters-to-tenants" rel="noopener">common areas</a> or provide tenant improvement allowances, complicating or ruining the tenant.</p>
<h2>Advice For Tenants Caught in Receiverships</h2>
<p>As a tenant caught in a receivership, what can you do? <span style="font-weight: bold;">Unfortunately, tenants cannot </span><a href="/articles/everything-you-need-to-know-about-early-lease-terminations-in-commercial-real-estate" rel="noopener" style="font-weight: bold;">end their leases</a><span style="font-weight: bold;"> prematurely (without consequences) or easily renegotiate their terms after their building goes into receivership.</span> If asked to sign an *estoppel, however, it’s important to speak with legal professionals before taking action.<br><br>This further enforces the importance of signing a lease with a building owner that’s reputable and financially stable.<br><br><em>*An estoppel is a statement signed by a tenant confirming that a lease agreement exists, facts stated within the agreement are valid, that no defaults exist, and that they agree to pay rent to the landlord on a specified date.</em></p>
<h2><strong>Are You a Tenant Caught in a Receivership? We Can Help. </strong></h2>
<p>At Allegro, we’ve successfully worked through a myriad of receivership transactions, which means we understand the challenges you may experience if you find yourself in one. <a href="/contact" rel="noopener" style="font-weight: bold;">Contact our team of experts today</a> and we can help you navigate this challenging situation.</p>
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<p>Posted on August 26, 2021 by Tim Anderson</p>
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<div class="entry-content">
<p><span style="font-weight: 400;">As an office building tenant, you may not understand the concept of a <a href="/articles/navigating-a-receiver-sale#:~:text=A%20commercial%20real%20estate%20receivership%20is%20an%20affordable%20alternative%20to%20a%20foreclosure%20proceeding%20(a%20lender%20takes%20ownership%20of%20the%20project)%20or%20a%20bankruptcy%20proceeding%20(a%20trustee%20takes%20control%20of%20the%20project)." rel="noopener">receivership</a> until you’re caught in one. </span></p>
<p><span style="font-weight: 400;">At that point, you’d likely have a myriad of questions about what this means for your lease and the building overall.</span></p>
<p><span style="font-weight: 400;">To help you better understand, we share details about what a receivership is, some of the top challenges for tenants, and tips on how to navigate and avoid one.<br></span></p>
<p><span style="font-weight: 400;"></span></p></div>, rssSummaryFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/Blog%20Images/receiverships%20featured%20image.jpg, safeFeaturedImageAltText=commercial real estate buildings, scheduledUpdateDate=0, screenshotPreviewTakenAt=1680180841186, screenshotPreviewUrl=https://cdn1.hubspot.net/hubshotv3/prod/e/0/241918c1-cac2-42dd-88fe-e2b3400270c4.png, sections={}, securityState=NONE, siteId=null, slug=articles/challenges-for-tenants-caught-in-receiverships, stagedFrom=null, state=PUBLISHED, stateWhenDeleted=null, styleOverrideId=null, styleOverrideIdColumn=null, subcategory=normal_blog_post, subcategoryEnum=normal_blog_post, syncedWithBlogRoot=true, tagId=null, tagIds=[77269686321, 77269686339, 77270935654, 77270935659, 77570820764], tagList=[Acquisition, Lease Administration, Service Line, Transaction Advisory, Service], tagNames=[Acquisition, Lease Administration, Service Line, Transaction Advisory, Service], tagsForBuffer=[77269686321, 77269686339, 77270935654, 77270935659, 77570820764], targetObjectType=BLOG_POST, teamPerms=[], templatePath=, templatePathForRender=AllegroHS/templates/single-articles.html, themePath=null, themeSettingsValues=null, title=3 Challenges for Tenants Caught in Receiverships, tmsId=null, topicId=null, topicIds=[77269686321, 77269686339, 77270935654, 77270935659, 77570820764], topicList=[Acquisition, Lease Administration, Service Line, Transaction Advisory, Service], topicNames=[Acquisition, Lease Administration, Service Line, Transaction Advisory, Service], translatedContent={}, translatedContentEnumMap={}, translatedFromId=null, translations={}, tweet=null, tweetAt=null, tweetImmediately=false, unpublishedAt=0, updated=1680180840752, updatedById=13028929, updatedDateTime=2023-03-30T12:54:00.752Z, upsizeFeaturedImage=false, url=https://allegrorealty.com/articles/challenges-for-tenants-caught-in-receiverships, useFeaturedImage=true, useFeaturedImageColumn=false, userPerms=[], views=null, visibleToAll=null, widgetContainers={}, widgetcontainers={}, widgets={module_16576370385602={body={module_id=79002237368, title_image={alt=warehouse5, height=600, loading=lazy, max_height=600, max_width=800, size_type=auto, src=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/warehouse5.jpg, width=800}}, css={}, child_css={}, id=module_16576370385602, name=module_16576370385602, type=module, order=7, label=hero-title-image, smart_type=null, styles={}, module_id=79002237368}}})
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Think: As consumer spending slows and revenues drop, companies may cut back on hiring employees or buying new equipment. If spending increases, new employees and more materials are needed to adapt to this change.</p>
<p>Your corporate real estate—the physical embodiment of corporate strategy—is not different. As the first or second expense on an income statement, it’s important that your real estate continuously supports your<br>business goals.</p>
<p>As the economy ebbs and flows, business leaders often recognize that their existing commercial real estate portfolio no longer aligns with their needs.</p>, paper_form={form_id=379fb75a-1f6f-4cb4-9b29-f4762f9c6848, response_type=inline, message=<p>Thanks for downloading the guide. <a href="https://f.hubspotusercontent20.net/hubfs/6374170/Portfolio%20Optimization%20Whitepaper/Allegro%20Realty%20Portfolio%20Optimization%20Whitepaper.pdf" target="_blank" rel="noopener"><strong>Click here to download it.</strong></a></p>
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<p>For more resources like this, <a href="https://www.allegrorealty.com/blog\" target="_blank" rel="noopener">check out our blog</a>.</p>, gotowebinar_webinar_key=null, form_type=HUBSPOT}, white_paper_copy=<p><span>It’s the first or second expense on an income statement. It’s the physical embodiment of your corporate strategy. <strong>It’s your commercial real estate portfolio, and if it’s not optimized to continuously support your business goals, you could be missing out on massive financial gains. </strong></span><span></span></p>
<p><span>That’s why we created this free resource: </span><strong>“Portfolio Optimization: The Essential Corporate Real Estate Guide.”</strong><span></span></p>
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Commercial Real Estate Portfolio Optimization Guide
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, NAME=string_value: "Trailhead BioSystems Inc. Secures More Than $1M in Incentives to Offset Costs of Relocation"
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Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n","rss_body":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n<!--more-->\n<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href=\"/about\" rel=\"noopener\">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>\n<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>\n<p style=\"font-size: 18px;\">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href=\"/articles/missing-something-identify-it-using-a-cre-acquisition-strategy\" rel=\"noopener\">purchase of a building</a> that could sustain operations as business continued to grow.</p>\n<p style=\"font-size: 18px;\">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href=\"/articles/9-commercial-real-estate-government-incentives-to-capitalize-on\" rel=\"noopener\">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>\n<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>\n<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href=\"/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition\" rel=\"noopener\">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>\n<h2>Negotiating Significant Government Incentives to Offset Costs </h2>\n<p>The Allegro consulting team successfully negotiated <span style=\"font-weight: bold;\">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>\n<h2>Creating Room for Company Growth </h2>\n<p>The work completed and incentives won by <a href=\"/leadership\" rel=\"noopener\">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>\n<p style=\"font-weight: bold;\">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href=\"https://www.allegrorealty.com/contact/\" rel=\"noopener\" style=\"font-weight: bold;\">Contact us</a> to discuss your real estate needs today. </p>","tag_ids":[77267670076,77269685260,77269686306,77269686350,77270935654,77570820764],"topic_ids":[77267670076,77269685260,77269686306,77269686350,77270935654,77570820764],"enable_google_amp_output_override":false,"generate_json_ld_enabled":true,"post_body":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n<!--more-->\n<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href=\"/about\" rel=\"noopener\">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>\n<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>\n<p style=\"font-size: 18px;\">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href=\"/articles/missing-something-identify-it-using-a-cre-acquisition-strategy\" rel=\"noopener\">purchase of a building</a> that could sustain operations as business continued to grow.</p>\n<p style=\"font-size: 18px;\">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href=\"/articles/9-commercial-real-estate-government-incentives-to-capitalize-on\" rel=\"noopener\">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>\n<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>\n<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href=\"/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition\" rel=\"noopener\">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>\n<h2>Negotiating Significant Government Incentives to Offset Costs </h2>\n<p>The Allegro consulting team successfully negotiated <span style=\"font-weight: bold;\">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>\n<h2>Creating Room for Company Growth </h2>\n<p>The work completed and incentives won by <a href=\"/leadership\" rel=\"noopener\">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>\n<p style=\"font-weight: bold;\">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href=\"https://www.allegrorealty.com/contact/\" rel=\"noopener\" style=\"font-weight: bold;\">Contact us</a> to discuss your real estate needs today. </p>","post_summary":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n","blog_post_schedule_task_uid":null,"blog_publish_to_social_media_task":"DONE_NOT_SENT","blog_publish_instant_email_task_uid":null,"blog_publish_instant_email_campaign_id":null,"blog_publish_instant_email_retry_count":0,"keywords":[],"composition_id":0,"header":null,"published_at":1678456519270,"password":null,"head_html":null,"footer_html":null,"attached_stylesheets":[],"enable_domain_stylesheets":null,"include_default_custom_css":null,"layout_sections":{},"past_mab_experiment_ids":[],"featured_image_alt_text":"two lab technicians working with beakers","enable_layout_stylesheets":null,"tweet":null,"tweet_at":null,"campaign_name":null,"campaign_utm":null,"meta_keywords":null,"meta_description":"See how Allegro helped a biotech startup secure more than one million dollars in incentives to offset the costs of relocating their facility. 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Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n","rss_body":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n<!--more-->\n<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href=\"/about\" rel=\"noopener\">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>\n<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>\n<p style=\"font-size: 18px;\">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href=\"/articles/missing-something-identify-it-using-a-cre-acquisition-strategy\" rel=\"noopener\">purchase of a building</a> that could sustain operations as business continued to grow.</p>\n<p style=\"font-size: 18px;\">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href=\"/articles/9-commercial-real-estate-government-incentives-to-capitalize-on\" rel=\"noopener\">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>\n<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>\n<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href=\"/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition\" rel=\"noopener\">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>\n<h2>Negotiating Significant Government Incentives to Offset Costs </h2>\n<p>The Allegro consulting team successfully negotiated <span style=\"font-weight: bold;\">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>\n<h2>Creating Room for Company Growth </h2>\n<p>The work completed and incentives won by <a href=\"/leadership\" rel=\"noopener\">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>\n<p style=\"font-weight: bold;\">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href=\"https://www.allegrorealty.com/contact/\" rel=\"noopener\" style=\"font-weight: bold;\">Contact us</a> to discuss your real estate needs today. </p>","tag_ids":[77267670076,77269685260,77269686306,77269686350,77270935654,77570820764],"topic_ids":[77267670076,77269685260,77269686306,77269686350,77270935654,77570820764],"enable_google_amp_output_override":false,"generate_json_ld_enabled":true,"post_body":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n<!--more-->\n<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href=\"/about\" rel=\"noopener\">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>\n<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>\n<p style=\"font-size: 18px;\">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href=\"/articles/missing-something-identify-it-using-a-cre-acquisition-strategy\" rel=\"noopener\">purchase of a building</a> that could sustain operations as business continued to grow.</p>\n<p style=\"font-size: 18px;\">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href=\"/articles/9-commercial-real-estate-government-incentives-to-capitalize-on\" rel=\"noopener\">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>\n<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>\n<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href=\"/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition\" rel=\"noopener\">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>\n<h2>Negotiating Significant Government Incentives to Offset Costs </h2>\n<p>The Allegro consulting team successfully negotiated <span style=\"font-weight: bold;\">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>\n<h2>Creating Room for Company Growth </h2>\n<p>The work completed and incentives won by <a href=\"/leadership\" rel=\"noopener\">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>\n<p style=\"font-weight: bold;\">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href=\"https://www.allegrorealty.com/contact/\" rel=\"noopener\" style=\"font-weight: bold;\">Contact us</a> to discuss your real estate needs today. </p>","post_summary":"<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>\n","blog_post_schedule_task_uid":null,"blog_publish_to_social_media_task":"DONE_NOT_SENT","blog_publish_instant_email_task_uid":null,"blog_publish_instant_email_campaign_id":null,"blog_publish_instant_email_retry_count":0,"keywords":[],"composition_id":0,"header":null,"published_at":1678456519270,"password":null,"head_html":null,"footer_html":null,"attached_stylesheets":[],"enable_domain_stylesheets":null,"include_default_custom_css":null,"layout_sections":{},"past_mab_experiment_ids":[],"featured_image_alt_text":"two lab technicians working with beakers","enable_layout_stylesheets":null,"tweet":null,"tweet_at":null,"campaign_name":null,"campaign_utm":null,"meta_keywords":null,"meta_description":"See how Allegro helped a biotech startup secure more than one million dollars in incentives to offset the costs of relocating their facility. ","tweet_immediately":false,"publish_immediately":true,"security_state":"NONE","scheduled_update_date":0,"placement_guids":[],"property_for_dynamic_page_title":null,"property_for_dynamic_page_slug":null,"property_for_dynamic_page_meta_description":null,"property_for_dynamic_page_featured_image":null,"property_for_dynamic_page_canonical_url":null,"preview_image_src":null,"legacy_blog_tabid":null,"legacy_post_guid":"","performable_variation_letter":null,"style_override_id":null,"has_user_changes":true,"css":{},"css_text":"","unpublished_at":0,"published_by_id":13028929,"allowed_slug_conflict":false,"link_rel_canonical_url":null,"page_redirected":false,"page_expiry_enabled":false,"page_expiry_date":null,"page_expiry_redirect_id":null,"page_expiry_redirect_url":null,"deleted_by":null,"state_when_deleted":null,"cloned_from":86794999439,"staged_from":null,"personas":[],"compose_body":null,"featured_image":"https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/case-study-trailhead.png","featured_image_width":745,"featured_image_height":495,"publish_timezone_offset":null,"theme_settings_values":null,"last_edit_session_id":null,"last_edit_update_id":null}, jsonBodyMap={tag_ids=[77267670076, 77269685260, 77269686306, 77269686350, 77270935654, 77570820764], featured_image_alt_text=two lab technicians working with beakers, layout_sections={}, blog_publish_instant_email_retry_count=0, css={}, topic_ids=[77267670076, 77269685260, 77269686306, 77269686350, 77270935654, 77570820764], css_text=, featured_image_width=745, featured_image_height=495, featured_image=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/case-study-trailhead.png, html_title=Allegro Procures Property Manager for Private University’s Diverse CRE Portfolio | Allegro, generate_json_ld_enabled=true, has_user_changes=true, attached_stylesheets=[], composition_id=0, allowed_slug_conflict=false, enable_google_amp_output_override=false, blog_publish_to_social_media_task=DONE_NOT_SENT, cloned_from=86794999439, published_by_id=13028929}, keywords=[], label=Trailhead BioSystems Inc. Secures More Than $1M in Incentives to Offset Costs of Relocation, language=en, languageVariant=false, layoutSections={}, legacyBlogTabid=null, legacyId=null, legacyPostGuid=, linkRelCanonicalUrl=null, linkRelCanonicalUrlColumn=null, listTemplate=, liveDomain=allegrorealty.com, mab=false, mabExperimentId=null, mabMaster=false, mabVariant=false, majorVersion=0, metaDescription=See how Allegro helped a biotech startup secure more than one million dollars in incentives to offset the costs of relocating their facility. , metaKeywords=null, migratedLegacyPost=false, name=Trailhead BioSystems Inc. Secures More Than $1M in Incentives to Offset Costs of Relocation, nextPostFeaturedImage=null, nextPostFeaturedImageAltText=null, nextPostName=null, nextPostSlug=null, onlyIdSlug=false, pageExpiryDate=null, pageExpiryDateColumn=null, pageExpiryRedirectId=null, pageExpiryRedirectIdColumn=null, pageExpiryRedirectUrl=null, pageExpiryRedirectUrlColumn=null, pageRedirectedColumn=false, pageTitle=Allegro Procures Property Manager for Private University’s Diverse CRE Portfolio | Allegro, parentBlog='Case Studies' blog (77571626139) of hub id 6374170, password=null, passwordColumn=null, pastMabExperimentIds=[], performableGuid=null, performableVariationLetter=null, permissionedObjectType=Optional[BLOG_POST], personas=[], placementGuids=[], portableKey=null, portalId=6374170, position=null, postBody=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>
<!--more-->
<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href="/about" rel="noopener">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>
<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>
<p style="font-size: 18px;">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href="/articles/missing-something-identify-it-using-a-cre-acquisition-strategy" rel="noopener">purchase of a building</a> that could sustain operations as business continued to grow.</p>
<p style="font-size: 18px;">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href="/articles/9-commercial-real-estate-government-incentives-to-capitalize-on" rel="noopener">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>
<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>
<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href="/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition" rel="noopener">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>
<h2>Negotiating Significant Government Incentives to Offset Costs </h2>
<p>The Allegro consulting team successfully negotiated <span style="font-weight: bold;">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>
<h2>Creating Room for Company Growth </h2>
<p>The work completed and incentives won by <a href="/leadership" rel="noopener">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>
<p style="font-weight: bold;">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href="https://www.allegrorealty.com/contact/" rel="noopener" style="font-weight: bold;">Contact us</a> to discuss your real estate needs today. </p>, postBodyRss=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>
<!--more-->
<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href="/about" rel="noopener">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>
<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>
<p style="font-size: 18px;">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href="/articles/missing-something-identify-it-using-a-cre-acquisition-strategy" rel="noopener">purchase of a building</a> that could sustain operations as business continued to grow.</p>
<p style="font-size: 18px;">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href="/articles/9-commercial-real-estate-government-incentives-to-capitalize-on" rel="noopener">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>
<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>
<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href="/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition" rel="noopener">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>
<h2>Negotiating Significant Government Incentives to Offset Costs </h2>
<p>The Allegro consulting team successfully negotiated <span style="font-weight: bold;">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>
<h2>Creating Room for Company Growth </h2>
<p>The work completed and incentives won by <a href="/leadership" rel="noopener">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>
<p style="font-weight: bold;">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href="https://www.allegrorealty.com/contact/" rel="noopener" style="font-weight: bold;">Contact us</a> to discuss your real estate needs today. </p>, postEmailContent=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>, postFeaturedImageIfEnabled=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/case-study-trailhead.png, postListContent=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>, postListSummaryFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/case-study-trailhead.png, postRssContent=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>, postRssSummaryFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/case-study-trailhead.png, postSummary=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>
, postSummaryRss=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>, postTemplate=AllegroHS/templates/single-case-studies.html, potentiallyStale=true, previewImageSrc=null, previewKey=caQOGoNA, previousPostFeaturedImage=https://6374170.fs1.hubspotusercontent-na1.net/hubfs/6374170/university3.jpg, previousPostFeaturedImageAltText=, previousPostName=Allegro Procures Property Manager for Private University’s Diverse CRE Portfolio, previousPostSlug=case-studies/allegro-procures-property-manager-for-private-universitys-diverse-cre-portfolio, processingStatus=PUBLISHED, propertyForDynamicPageCanonicalUrl=null, propertyForDynamicPageFeaturedImage=null, propertyForDynamicPageMetaDescription=null, propertyForDynamicPageSlug=null, propertyForDynamicPageTitle=null, publicAccessRules=[], publicAccessRulesEnabled=false, publicAccessRulesEnabledColumn=false, publishDate=2023-03-10 13:55:19, publishDateLocalTime=2023-03-10T13:55:19.270Z, publishDateLocalized=com.hubspot.jinjava.objects.date.FormattedDate@42d9085d, publishDateLong=1678456519270, publishDateSnakeCaseLong=1678456519270, publishImmediately=true, publishImmediatelyColumn=null, publishTimezoneOffset=null, publishedAt=1678456519270, publishedByEmail=null, publishedById=13028929, publishedByName=null, publishedUrl=https://allegrorealty.com/case-studies/trailhead-biosystems-inc.-secures-incentives-to-offset-costs-of-relocation, requiresDeletion=false, resolvedDomain=allegrorealty.com, resolvedLanguage=null, rssBody=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>
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<p>Costs were an important consideration for Trailhead. Although the team was facing pressure to relocate to a new city, the lower real estate and labor costs in Cleveland influenced their decision to stay in Ohio. Additionally, the startup was raising Series B funding and needed to ensure their existing financial resources were allocated appropriately.<br><br>The team at Trailhead contacted <a href="/about" rel="noopener">Allegro</a> for transaction support. Allegro's deep connections within the Cleveland market and years of CRE expertise solidified Trailhead's decision to work with the team.</p>
<h2>Identifying a Unique Location and Seeking Financial Support for a Nuanced Client </h2>
<p style="font-size: 18px;">In the early stages of their partnership, Allegro met with Trailhead to solidify its relocation needs. While Trailhead knew it required more lab space than its current real estate could offer, the team needed assistance in conducting due diligence to support the <a href="/articles/missing-something-identify-it-using-a-cre-acquisition-strategy" rel="noopener">purchase of a building</a> that could sustain operations as business continued to grow.</p>
<p style="font-size: 18px;">Ultimately, Trailhead was looking for affordable real estate that could be transformed into state-of-the-art lab space, a location near highly skilled workers, the flexibility to accommodate growth, and a property manager to oversee any necessary renovations and building operations.<br><br>Allegro’s real estate team immediately selected and managed a team of due diligence vendors to evaluate Trailhead’s preferred location. At the same time, Allegro’s <a href="/articles/9-commercial-real-estate-government-incentives-to-capitalize-on" rel="noopener">government incentives</a> team was busy with a request for incentives that was sent to a local economic development agency. Allegro also sent out requests for proposals to select a property manager.</p>
<h2>Overcoming Challenges to Secure State-of-the-Art Lab Space</h2>
<p>After thorough evaluation of the preferred property, Trailhead acquired a 37,348-square-foot facility in Beachwood, Ohio. This new location would provide ample space for its existing 22 team members and the 47 future employees Trailhead planned to hire over the next decade. <br><br>During <a href="/articles/understanding-the-4-types-of-due-diligence-during-cre-disposition" rel="noopener">due diligence</a>, a number of building concerns were revealed. The presence of asbestos in the building posed a significant environmental challenge. Furthermore, worldwide supply chain disruptions would make needed renovations—including an advanced HVAC system and a new roof—difficult and expensive. Allegro managed multiple vendors to gather cost estimates to improve the building systems.</p>
<h2>Negotiating Significant Government Incentives to Offset Costs </h2>
<p>The Allegro consulting team successfully negotiated <span style="font-weight: bold;">an incentives package worth $1.9 million.</span> It contained a real estate tax abatement, worth $678,000, and an additional $77,000 in job tax credits to account for the nearly four dozen high-paying jobs Trailhead intended to create. <br><br>Trailhead also received a state credit, worth $200,000 to support the cost of transforming the building into a cutting-edge laboratory and facility. The resulting space will allow Trailhead to continue work in specialized human cells, drug discovery, and human disease investigations.</p>
<h2>Creating Room for Company Growth </h2>
<p>The work completed and incentives won by <a href="/leadership" rel="noopener">Allegro’s expert teams</a> led to Trailhead’s successful relocation and CRE buildout. This facility not only accommodates Trailhead’s expanding operations, but also creates future research jobs to contribute to Cleveland’s growing life sciences industry.</p>
<p style="font-weight: bold;">Do you have a similar commercial real estate need that could qualify for economic incentives? We can help. <a href="https://www.allegrorealty.com/contact/" rel="noopener" style="font-weight: bold;">Contact us</a> to discuss your real estate needs today. </p>, rssSummary=<p>Trailhead BioSystems Inc., a biotech startup, sought to relocate after recognizing their current lab space was not meeting their needs. Because developed lab space is extremely expensive to acquire, the team at Trailhead was looking for office space that could be built out to match their specific lab requirements. </p>
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Trailhead BioSystems Inc. Secures More Than $1M in Incentives to Offset Costs of Relocation
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