Rich MacAuley of EBI Consulting Answers Questions on Special Servicers and Due Diligence

Rich MacAuley, managing consultant with EBI Consulting, provides insight into the due diligence and property assessment considerations for special servicers. Special servicers are obligated to complete a Phase I Environmental Site Assessment (ESA) when an asset is turned over to them. The pursuit of a Property Condition Assessment depends on the site itself and the special servicer’s business plan for the asset. To date, there has been a moderate increase in requests from special servicers for due diligence; however, it is not expected that this volume will reach that which occurred during last recession. When office leases rollover tenants may look to reduce their footprints or forego office space altogether causing strain on financials of loans in place – having an accurate Property Condition Report can be vital in helping execute appropriate business plans accordingly.