By Tom Kirvan
Legal News
Ellen Mahoney, a former paralegal with two of Detroit's major law firms that represented a number of prominent commercial developers, had to shift her career sights in the real estate field from the boom times of a decade ago when economic growth showed no signs of abating.
“The commercial real estate market has been on a slightly different course over the last couple of years,” said Mahoney, president of Loss Mitigation Consulting Services, which in 2010 became a division of Complete Title Services of Southeast Michigan, a Birmingham based company. “When the financial markets crashed, the bottom essentially fell out of both the residential and commercial real estate markets. Prices fell so fast, and then the economy tanked and the country began hemorrhaging jobs.”
For some perspective on the extent of the free fall, Mahoney noted that there was $450 billion in commercial real estate sales in 2007. Over each of the next two years, the volume dropped to $50 billion, a precipitous decline that few if any experts could have predicted.
“By 2010, the market was at $100 billion; in 2011, the market was at $200 billion, and 2012, the market is close to $300 billion,” Mahoney reported. “So the trend is definitely improving.”
Yet, while the “market is much better,” it is “not without its challenges,” according to Mahoney, who heads up the short sale department for Complete Title Services.
“One of the greatest challenges is finding quality underwriting for commercial financing,” said Mahoney, who earned her bachelor's degree from the State University of New York and completed graduate studies in paralegal work at Syracuse University in 1983. “It is hard to find banks that are willing to even provide financing for commercial transactions, and the underwriting for the financing is extremely tough.”
Mahoney, who has been active with the Boys Hope Girls Hope program for at-risk children, moved to Michigan in 1985 from upstate New York, beginning her career here as an escrow officer at Lawyer's Title. She then joined Dickinson Wright as a paralegal in its real estate department, working “under the tutelage of a senior paralegal who ultimately left for a VP position at a major regional real estate company.” It was then that Mahoney “realized there were broader opportunities for paralegals.”
She took her talents to the former Clark Klein, now known as Clark Hill, serving as a senior real estate paralegal, helping manage commercial deals “from the time the contracts were entered into through the closing,” according to Mahoney. A few years later, Mahoney was asked to join the general counsel's office of Bay Harbor, the swank development on the shores of Little Traverse Bay in Petoskey. She spent four years there, overseeing brokerage as well as sales and acquisitions for the developer, David Johnson of Victor International.
Mahoney then entered the mortgage business and when the economic downturn hit in 2007, she found herself “being called upon to assist clients that were being referred to her by realtors that were having trouble with their mortgages,” leading to the creation of Loss Mitigation Consulting Services in 2008.
According to Mahoney, it is “important to have a team of experts assisting clients with transactions that are challenging and difficult. The commercial real estate market,” she said, “is ripe for fresh ideas on how to prevent the increasing amount of vacancies and distressed properties.”
Bob Pliska, a commercial broker and owner of a Sperry Van Ness, Commercial Real Estate Advisors franchise in Birmingham, echoes her remarks. According to Pliska — whose office handles multi-family, retail, industrial, office, and hotel properties — commercial and investment real estate has gone from “defense to offense” over the past year.
“Commercial real estate investors were caught for several years (2008-11) trying to save their properties via workout,” Pliska said. “Now, much of the fundamentals of commercial real estate have gotten much better — rents, occupancy, etc., where the investors are turning to more aggressively buying, improving value and cash flow, rather than spending a lot of time trying to save their properties from foreclosure.”
John Kahmi, a senior associate with Lee & Associates Commercial Real Estate Services in Southfield, said that “office space is a very tough market since there is so much vacant space available,” far outstripping demand.
“On the other hand, industrial properties are very prevalent, but also in very high demand,” Kahmi said.
Whatever the real estate challenge, Mahoney said her “focus has always been to work hard and make the attorney look good to their client. That has not changed since I left my role as a paralegal.”
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