MINNEAPOLIS, Minn. — Philadelphia-based law firm Ballard Spahr recently announced a new division in its Minneapolis office with an interesting name: Distressed Assets and Opportunities Group.
“Distressed” refers to property subject to financial difficulties such as bankruptcy and foreclosure. “Opportunities” refers to strategies that can help distressed building owners and lenders stave off negative outcomes and come up with mutually beneficial solutions, such as refinancing, said William Wassweiler, an equity partner in Ballard Spahr’s Minneapolis office.
Nationwide, the distressed office properties category has grown as owners and lenders deal with a rising tide of loan foreclosures, in a time of record-high office vacancies and operating costs, and rapidly rising interest rates that further impact owners’ and investors’ return. As a measure of the potential damage, in 2024 more than $900 billion in commercial real estate debt is scheduled to reach maturity.
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