Restructuring and asset disposition for an industry defined by leverage, cycles, and complexity.
Real estate distress is driven by overleveraged capital structures, market timing, and development projects that outlive their financing. Lighthouse has served as CEO, CRO, and receiver for developers, office properties, and commercial portfolios — including a $1 billion merchant developer managed through an out-of-court liquidation and wind-down. Our engagements have yielded full creditor recovery and multi-million-dollar distributions to equity holders.
Real estate distress rarely involves a single asset or a single creditor. We manage the full complexity: multiple properties, multiple lenders, mezzanine layers, and partnership disputes with the financial discipline and negotiation experience to protect value across the entire capital stack.
Retained to lead the orderly disposition of a $1B commercial development portfolio.
Challenge: A $1 billion merchant developer was adversely impacted by the 2008 downturn in the commercial real estate market. Several of its related entities had filed for bankruptcy protection or were otherwise in the process of liquidating. After defaulting on its loan covenants, the company was put up for sale. The company had several sound development projects at various stages, but did not have the liquidity needed to complete them. The company had $500 million of secured debt, $50 million of unsecured debt and lacked sufficient cash resources to satisfy those claims. The company engaged Lighthouse to determine the best option to maximize value for all stakeholders.
The Solve: Lighthouse started by negotiating a multi-year forbearance agreement, allowing the company time to sell its assets in an orderly fashion. Lighthouse then implemented an employee incentive plan to ensure management continued involvement throughout the entire engagement. Once the situation was stabilized, Lighthouse worked with management to develop and manage a sales process.
The Outcome: Business operations and all remaining assets were sold during the sale process. generating net proceeds in excess of $550 million, and enabling the company to pay its secured and unsecured creditors in full.
How we support real estate engagements.
1. Portfolio & Capital Stack Assessment: We evaluate every property, lien position, lease, and partnership obligation to build a complete picture of the portfolio's financial position,including cashflow, to assess value and recovery potential.
2. Lender & Partner Negotiation: We engage directly with senior lenders, mezzanine holders, and equity partners to negotiate forbearance, restructure obligations, and align stakeholders around a realistic resolution strategy.
3. Asset Stabilization & Marketing: We stabilize property operations, manage tenants, maintenance, and leasing, while marketing assets through channels designed to attract qualified real estate investors and operators to maximize sale proceeds.
4. Disposition & Distribution: We execute property sales, manage closing processes, and distribute proceeds in accordance with the capital stack to create an orderly resolution that has delivered full creditor recovery and meaningful equity distributions.
The best outcomes start with early action.
The sooner we're at the table, the more options remain available. Reach out for a confidential conversation with our team