Deferred Maintenance, the Next Looming Real Estate Crisis

September 13, 2010

FI Consulting’s Tom Follain Featured in CIRE Magazine

The Big Fix article coverArlington, VA—FI Consulting cofounder and principal, Tom Follain’s warning regarding deferred maintenance on commercial real estate properties with negative equities appears in the September/October issue of Commercial Investment Real Estate (CIRE) magazine.

Located in the Investment Analysis section, the article entitled, “The Big Fix: Is deferred maintenance the next obstacle to market recovery?” explores and examines the challenges posed by postponing maintenance activities on properties in commercial real estate.

As Follain asserts, “Neglected properties affect not only deal participants but the market as a whole as the industry tries to move itself forward in a stubborn economy.”

In the piece, Follain identifies those most likely to be affected and offers up recommendations for how to defend against this practice, “Deferred maintenance is of greatest concern to lenders and servicers with exposure to loans originated between 2005 and 2007.  Many of these property owners are underwater and believe that default is inevitable,” he explains.  “However, with robust monitoring and surveillance capabilities, lenders and servicers can identify these properties early on and enforce loan covenants intended to protect them from deferred maintenance.”

Commercial Investment Real Estate is the award-winning magazine of the CCIM (Certified Commercial Investment Member) Institute.

Follain, CFA, has more than a decade of experience implementing sophisticated financial applications used for the analysis and valuation of real estate loan portfolios in both the public and private sectors.  Prior to cofounding FI Consulting with Roman Iwachiw, Follain worked for both the Audit, Assurance and Business Advisory Services and Management Consulting Services divisions of PricewaterhouseCoopers LLP.

The full article can be found by visiting: