ATLANTA — Greg Maloney, president of Jones Lang LaSalle Retail, has taken on receivership responsibilities for nine underperforming retail properties. Maloney now oversees leasing and management activity at The Macon Mall in Macon, Ga., and the Burlington Square Mall in Burlington, N.C. Other distressed properties under his care in the Southeast include three Maryland Boscov’s stores. The Reading, Pa.-based department store chain filed for Chapter 11 bankruptcy protection in August.
In the current economy, Maloney has seen an uptick in requests for his services. Six months ago, he answered the occasional phone call about receivership duties — more requests for information than calls for help. Ever since the slumping economy started affecting commercial real estate, he’s been getting close to a dozen calls per week.
Maloney, who has served in a receivership role for 15 years, sees his court-appointed duty as just another option for lenders. “The receiver is really a fiduciary of the court,” he says. “It acts on their behalf and tries to solve the problems.”
A receiver’s job is to make sure the value of the property doesn’t decline further until a seller can be arranged. In the case of the 1.4 million-square-foot Macon Mall, Maloney will protect the asset until it is sold by auction later this month. Receivership, he says, is a legitimate way to stave off foreclosure, albeit one that isn’t done that often. “It’s just a different way to be able to work out a difference between the lender and the owner without somebody taking title to the property. Lenders don’t like to own properties. They like to lend money on the properties and let somebody else deal with them.”
Jones Lang LaSalle has a distress property receivership services division, but courts want to make sure individuals, not corporations, are in charge of the duties. That’s why Maloney’s in charge. This guideline varies from state to state, but most courts like knowing there’s a person with an established background in rehabilitating assets on the other end of the deal.
“They like to see the person who’s going to be making the decisions,” Maloney says.
While his most recent acquisition concerns retail properties, the property types Maloney receives run the gamut. Officials at Jones Lang LaSalle have acquired hotel, multifamily and even senior housing properties ripe for receivership services. As economic hardships for real estate investors are far from over, Maloney anticipates more lenders looking for receivers, and he’ll be ready for them, whatever the asset type.