Valuation is the basic and first step, requiring an understanding of all the factors influencing value. However, repossessed and distressed assets generally require further steps in order to support reasoned decision making about the future of the property and to ensure sound financial reporting.
Asset management strategies incorporating legal, technical, and operational features are essential for the analysis of repossessed and distressed assets, but are not usually within the scope of valuation. We will offer asset management strategies introducing proposals and scenarios – in form of a business or action plan – to maximize the value and to optimize the exit strategy of distressed properties, also providing the basis for asset-level budgeting.
It is our experience from working within the banking sector that ‘special treatment’ required to address the particularities of repossessed and distressed assets, which are often illiquid and have holding costs and future capital requirements needed before eventual sale. Understanding and calculating these often goes well beyond the limits of conventional valuation, and requires an approach tailored to each problem.