Receivership business picks up for property managers

Back to TopCommentsE-mailPrintBookmark and Share

Receivership—often a precursor to foreclosure—is a dirty word for owners of real estate, but companies hired by the courts to manage properties in financial distress are benefiting as the number of such properties grows.

“It’s a great way to pick up management fees and a great way to meet lenders,” said Jerry Collins, a principal in locally based apartment manager and developer Flaherty & Collins Properties. Properties in receivership account for more than 15 percent of the roughly 12,000 apartment units F&C manages, Collins said.

In the last 20 years, F&C’s principals or F&C itself have become court-appointed receiver for more than 50 apartment properties, a number that’s growing as more owners fall behind in making payments to lenders.
The company was appointed receiver for two properties in 2008. The number grew to seven last year. Less than three months into this year the firm has picked up three properties and is expecting three or four more in short order, putting the company on course this year to add a record number of units to its management portfolio via receivership.

The firm just added Meridian Shoreland apartments, a 195-unit high-rise near 38th and Meridian streets. It’s been managing the 366-unit Brookstone Apartments at 38th and High School Road since 2008 as the lender and owner try to work out their differences. It’s also managing the 220-unit Aspen Village, at 34th and Lafayette Road, a property taken back by its lender and now listed for sale.

In the last several years, as the number of properties in foreclosure has risen, more companies have gotten into the game. Buckingham Cos. is one of the most active in terms of apartment communities and also manages an Evansville office building in receivership.

Between 20 and 25 percent of the 18,000 apartment units the company manages are receivership units, said Alexandra Jackiw, president of Buckingham Management. Earlier this year it picked up The Cedars, a 248-unit complex at 34th and Lafayette Road. Its largest local property right now is Wildwood Village, a 324-unit property at 38th and Guion Road that is now owned by the lender.

Judges used to appoint as receivers individuals who would then hire property managers to oversee real estate in foreclosure. In the last 10 years, there’s a trend toward making the property manager the receiver, said Marion County Superior Court Judge Cynthia Ayers, who said appointing a company instead of a person makes more sense for larger income-producing properties.

Receivers are typically paid for their work from of the operating income a property generates. Collins of F&C said the amount varies from property to property. For a property with high occupancy, his company would charge a flat fee of four or five percent of gross income. Where there are large vacancies, F&C is more likely to establish a flat fee, say $4,000 a month, and charge the greater of that fee or a percentage of gross income.

Collins said F&C rarely buys a property that it has managed for a lender. “We see all the skeletons in the closet,” Collins said.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1