Monetizing Stalled Construction Deals

Published on November 7, 2021

High Rise Construction

Practical Solutions for Lenders & Investors

Fraud, incompetence, insufficient liquidity and delays due to a global pandemic are just some of the forces resulting in stalled real estate developments. Lenders and investors with capital tied up in these projects have common goals – complete construction, resolve any litigation, and monetize the asset through a sale, leasing and/or refinancing.

We have transformed millions of square feet of stalled residential, commercial and industrial construction projects into marketable assets for sale or occupancy through receiverships, out-of-court restructurings, ABCs and bankruptcies through the following process:

6 Steps to Monetizing Stalled Construction Projects

1. Determine the feasibility of completing construction vs. abandoning or selling project as-is:

  • Secure and protect the property and associated business operations:
  • Get control of finances, bank accounts, books & records, contracts and management offices
  • Employ and manage security personnel
  • Identify and extend all liability insurance including construction defect “Wrap Policy” protection

2. Identify, procure and manage financing requirements:

  • Incremental construction financing
  • Construction takeout mortgage financing


3. Review, amend and manage the design/construction team:

  • Reestablish contracts with architect-of-record, other designers and drafting support
  • Hire a third-party construction manager
  • Identify and contract directly with all sub-contractors

4. Complete the construction project:

  • Identify and resolve entitlement issues, permitting and easement requirements, construction setbacks, environmental approvals and land permitting violations
  • Oversee general contractor through completion of project
  • Employ third-party DRE attorney to prepare and modify required final tract maps, contracts, CC+Rs and disclosures
  • Obtain final certificates of occupancy from cities and municipalities

5. Design and implement the sale or leasing process:

  • Retain specialty sales or leasing team serving local market
  • Design and prepare sales/leasing platform to market property
  • Negotiate with any pre-existing buyers of residential properties
  • Retain and manage title company

6. Manage finance and accounting:

  • Prepare budgets, manage cash flow and track performance
  • Pay vendors
  • Process lien-related paperwork
  • Coordinate sale and escrow financials


Representative Engagements

SEC Receivership – Residential Towers: High Rise Construction

Completing construction of 96-unit and 93-unit condominium towers in Northern California. When we took possession:

  • The 96-unit and 93-unit towers were 50% and 70% complete, respectively;
  • The contractor was out of business;
  • No sub-contractors were working; and
  • The properties required remediation for issues such as mold, ADA compliance and faulty construction.

We are completing construction and will begin marketing the units for sale soon.

Receivership – Industrial Building:Industrial Building

Completed construction of 200,000 square foot General Services Administration (GSA) security lab:

  • Developer failed to complete building pursuant to contract;
  • Helped resolve multi-million dollar dispute between lender and developer; and
  • Completed construction of the state-of-the-art government lab facility.


Receivership – Track Home Development:

Completed construction of three large track home developments in Arizona and managed the sale of the homes:

  • The home builder did not have sufficient capital to complete the developments;
  • Managed all permit issues to enable completion of construction;
  • Negotiated and cured outstanding debts to clear liens;
  • Found and retained a contractor to complete construction; and
  • Sold the homes in 8 months, with many selling for more than appraised value during a weak market, generating proceeds exceeding the lender’s expectations.

More Info

Receivership – Primary School:Primary School

Completed construction of a new, unoccupied primary school after the developing school’s charter was pulled, four months before completion:

  • Obtained certificate of occupancy;
  • Marketed the property for sale; and
  • Maintained the property for two years until its $20 million sale to the local school district.

More Info

CRO / Consultant – General and Specialty Contractor:Real Estate

  • Managed weekly cash flow;
  • Reviewed all project progress and completion milestones and assessed costs to complete;
  • Reviewed litigation and risks for collection of receivables; and
  • Reviewed bids for new work and borrowing base reporting.


For more information about our Stalled Construction and other Real Estate Solutions, contact:

David Kieffer