RECEIVERSHIP CALLS NO LONGER AN ANOMALY AT DWC
RECEIVERSHIP CALLS NO LONGER AN ANOMALY AT DOUGLAS WILSON COMPANIES
Retail failures kicked off 2019, but other sectors – including real estate – are facing challenges.
The year began with a “retail apocalypse” commanding the headlines, as such notable brands as Barney’s, Marie Callender’s, Gymboree, Z Gallerie, Forever 21, and Payless filed for bankruptcy protection. Some of these high-profile companies will cease to exist, while others choose to restructure under court-ordered receivership.
Outside of retail, a smattering of other sectors made BK news in 2019 including energy (PG&E), pharmaceuticals and chemicals (Purdue) and major players in transportation, finance and communications. The cannabis business has also claimed casualties this year, including a multi-state cannabis platform headquartered in Toronto. We expect to see more cannabis businesses in receivership over the next decade as that industry gets its legal and regulatory sea legs.
Here at DWC, our year started with a trickle of calls for receivership services. Moving into the 3rd quarter, as a frothy economy began to expose cracks and fissures, we were getting multiple inquiries. Across the country, we are now working on some complex partnership disputes and high leverage predevelopment projects.
In the world of real estate, we are seeing high-growth markets – like Denver and Portland – on the verge of distress. We are witnessing multiple factors converge: increased construction and labor costs; rent-growth slowing and extended lease-up periods; plus, the potential of rising cap rates.
Our team is heading to the airport a lot more lately than we have all year, and we don’t expect that to slow down. If we can be of service to you, please don’t hesitate to contact Douglas Wilson at 619-906-4312.