Douglas Wilson Companies - Spring 2021 Newsletter

NEWSLETTER SPRING 2021

SPECIALIZED SERVICES Court Appointed Fiduciary Development Services Land Entitlements Asset/Property Management

DWC IDENTIFIES 3

GROWING SCENARIOS FOR REAL ESTATE

ADVISORY NEEDS

EXTENSION OF ADVISORY

SERVICES PROVIDES ADDITIONAL SUPPORT TO DEBT FUNDS

Assignment for Benefit of Creditors Resort/Hotel Management Receiverships Trustee Brokerage & Disposition Referee Forensic Accounting Due Diligence Chief Restructuring Officer Special Master Liquidating Trustee Bankruptcy Examiner Expert Testimony Highest and Best Use Analysis

As the world recovers from a year dominated by the pandemic, DWC has taken note of a rising need for real estate advisory services — a trend that spans both families and businesses and often includes legacy asset transitions from one generation to another.

The rise in inquiries for these services is attributable to several themes: the economic shift resulting from the pandemic; the desire of opportunistic buyers to approach owners during an uncertain time; and an unprecedented transfer of wealth making its way from baby boomers to their successors.

All the while, many families and entities are operating in a “holding pattern” of sorts, based on COVID-19-related uncertainty and the recent transition to a new presidential administration. Such a pause in economic activity can present a major opportunity for those who own and operate real estate to assess its highest and best use and prepare for upcoming decisions.

3 CRITICAL REAL ESTATE SCENARIOS A dragging economy — When the economy falters, it presents time to prepare for real

DOUGLASWILSON.COM

estate transitions. With many prospective buyers and sellers awaiting a solid recovery prior to making significant changes, this can be just the time to enlist the help of experts who can assess and create a plan for positioning potential upcoming asset transfers and/or redevelopment opportunities.

Deal prospects approaching — While some place decisions on hold during uncertain economic times, others seek opportunity.

Some buyers are approaching real estate owners during the downturn, which can be a critical time to seek the assistance of an experienced real estate advisor to best position the property and achieve the highest and best offer.

A wealth transfer takes place — The “great wealth transfer” is under way, as an estimated $68 trillion begins to make its way from baby boomers to their children over the next 20 years. When the creators of real estate wealth are ready to pass it down, an advisor can assist in providing a plan for real estate assets going forward, and serves as an educator in transitioning the ownership and management of such assets to the next generation.

(Story continues on inside)

Problem Resolution & Fiduciary Services | Fiduciary Advisors for Legacy Real Estate | Real Estate Advisory | Real Estate Development | Senior Living | Brokerage

CONNECTING

DWC Team on the Move

In late 2020, DWC Senior Managing Director Ryan Baker was elected to the California Receivers Forum state Board of Directors. He will serve in this role for a two-year term for the duration of 2021 through the end of 2022, providing leadership and expertise to the California receivers community.

Douglas Wilson recently spoke on the “Guide to a Successful Receivership” panel for Information Management Network’s

(Continued from cover) “The experience and expertise that DWC brings is not just our understanding of real estate,” says DWC Vice President Michele Vives. “Because we have been principal real estate developers, we understand the land use environment, the building environment and access to the capital markets. These are three very important components of a well-rounded approach to real estate advising.”

largest debt funds in this capacity. In the current pandemic-fueled environment, many of these funds are finding themselves in a position where they now control undeveloped land or other real estate. DWC provides expertise in entitlement, re-entitlement, financial modeling and underwriting, market studies and creative approaches for these funds to achieve upside and long-term value of these assets.

DWC EXTENDS ADVISORY SERVICES TO DEBT FUNDS

“DWC acts in an advisory capacity, essentially as a real estate arm for these funds that do not have in-house real estate expertise,” says DWC Chairman and CEO Douglas Wilson. “In these situations, we can provide something they are lacking. We expect to engage more clients in this area while some sectors continue to experience economic shortfalls.”

On the heels of the Great Recession a decade ago, a series of real estate debt funds emerged based on restricted access to traditional capital.

DWC is growing its advisory services to assist these funds with a focus on asset preservation and currently is assisting one of the nation’s

DOUGLAS WILSON COMPANIES WELCOMES MICHAEL WILSON AS ASSOCIATE DIRECTOR Douglas Wilson Companies

(IMN) Bank Special Assets & Credit Officer’s Virtual Forum.

DWC VP Michele Vives led a February roundtable hosted by the Urban Land Institute as part of its annual Women’s

MICHAEL WILSON

New to DWC in January 2021, Michael Wilson joins the firm as Associate Director. As DWC anticipates and experiences new business growth as a result of the changing economy, Michael supports the firm’s

project staff including project management, asset and property management and all related functions.

Internship event geared toward aspiring women in commercial real estate.

Upcoming events and panels include: Vice President Michele Vives will be speaking on the “Searching

IN SUPPORT OF INTERNAL OPERATIONS AND GROWTH, MONICA GARCIA JOINS DWC AS ADMINISTRATOR Douglas Wilson Companies

for Dry Land: Real Estate Bankruptcies” panel at the 33rd Annual Insolvency Conference hosted by the California Bankruptcy Forum, May 14 – 16, 2021.

MONICA GARCIA

SPRING 2021 | DOUGLAS WILSON COMPANIES

In support of Douglas Wilson Companies’ internal operations and growth across new projects, Monica Garcia joined the firm in late October 2020 as Administrator. In her role, she will augment the firm’s

administrative team through project support including accounting, project organization and facilitation, and a variety of operations-related functions.

MANAGING DIRECTOR WHITNEY BLUNDELL JOINS DWC TO OVERSEE PROPERTY & ASSET MANAGEMENT OPERATIONS Douglas Wilson Companies

WHITNEY BLUNDELL MANAGING DIRECTOR

Managing Director Whitney Blundell joined DWC in February to work closely with the leadership team and provide asset management expertise across the company’s commercial real estate endeavors. Whitney brings more than 10 years of experience in industrial and commercial real estate, working with private regional firms as well as institutional ownership and global REITS.

property management operations and will apply her capacity for high-volume portfolios and platform expansion to support the company’s growing real estate and receivership activities.

As managing director for DWC, Whitney oversees DWC’s in-house asset and

EMMES GROUP.

MOST RECENTLY, SHE SERVED IN A

MANAGEMENT ROLE WITH NATIONAL

REAL ESTATE INVESTOR-OPERATOR

LUXURY BEVERLY HILLS PROPERTIES LISTED FOR SALE Doulgas Wilson Companies News Briefs

Two luxury residential sites in Beverly Hills are now listed for sale as part of a DWC receivership assignment that began in 2020. The properties, at 1200 and 1210 Laurel Way, were originally purchased by a Canadian developer who began construction on two Paul McCleandesigned luxury homes on the sites, featuring sweeping views of downtown Los Angeles and the Pacific Ocean.

Now ripe for completion, the sites have been maintained and were partially constructed under the receivership assignment, which aimed to preserve the properties’ value and ultimately market

them for sale after the original developer defaulted on his loan.

DWC began the assignment with both residences partially constructed, exposed to weather elements and in need of permit renewals and the remobilization of the general contractor and subcontractors.

Further, various subcontractors were owed for work that had been completed and there were several lawsuits outstanding.

As agent for receiver, DWC reengaged many of the subcontractors, renegotiated with the general contractor, established a payment plan, secured permits, and procured and

placed new construction insurance — a complex and difficult feat. Under renewed permits, construction progressed and both properties are now being marketed for sale

by Beverly Hills-based Hilton & Hyland at $15.9 million and $17.5 million, respectively.

“Not often do receivers come into a site that is in mid-construction,” says DWC Senior Managing Director Ryan Baker, who is the receiver on the assignment. “DWC is very unique in being fit for this type of project because of all the development we have done and our vast experience with complex real estate endeavors.”

BEL AIR HADID HOME LISTED IN RECEIVERSHIP SALE Doulgas Wilson Companies News Briefs

Following a years-long high-profile saga, the famed property situated on a hillside in Bel Air, California is listed for sale.

The property has been the subject of widespread reports and contention as it was originally purchased by luxury developer Mohamed Hadid as the site of a 30,000-square-foot, mega-mansion, and later found to be in violation of various city

building codes and causing endangerment to surrounding properties.

Douglas Wilson was appointed as receiver to oversee demolition of the existing construction on the acre-plus site, allowing for a new buyer to develop the land, which features vast canyon and city views of Los Angeles.

As agent for receiver, Douglas Wilson Companies’ vast experience with real estate construction and development has allowed the company to bring the property to market during the receivership, and maintain its value as a development opportunity — all while carrying out the court-ordered demolition of the existing onsite structure.

AN INDUSTRY IN FLUX: IF AND WHEN HOSPITALITY RECOVERS HOW AN INNOVATIVE DWC PARTNERSHIP IS SUPPORTING HOTELS IN DISTRESS Problem Resolution & Fiduciary Services

The hospitality industry was among the hardest hit by the COVID-19 pandemic, and there is widespread speculation as to when — and if — the industry will ever fully recover. According to research published in January by the American Hotel & Lodging Association (AHLA), hotels will begin to recover in 2021, but half of U.S. hotel rooms are projected to remain empty.

Hotels will experience several shortand long-term changes on the road to recovery, says Thomas Corcoran, president and CEO of TCOR Hotel Partners, LLC, which through a direct partnership with DWC, provides more than 80 years of experience owning and operating hotels to assist hospitality owners in distress.

“MOST [IN THE INDUSTRY] BELIEVE IF WE GET THE VACCINES OUT

DOUGLAS WILSON COMPANIES & TCOR

70% OF THE POPULATION — BY

MORE THAN 80 YEARS OF EXPERIENCE OWNING AND OPERATING HOTELS

SUBSTANTIALLY — TO 60% OR

THE MIDDLE OF THE YEAR, THEN

THE THIRD AND FOURTH QUARTER

WILL BEGIN TO SEE LEISURE TRAVEL RETURN FIRST,” CORCORAN SAYS.

“BUSINESS TRAVEL WILL COME

NEXT. THE YEAR 2022 WILL BE A

MUCH BETTER YEAR, FOLLOWED BY

INCREASES AS CONFIDENCE LEVELS

RETURN; SAFETY BEING THE NO. 1

CONCERN.”

Increased cleanliness protocols will be a permanent fixture across the industry, Corcoran anticipates, with many hotels having to offer both in-person services and digital capabilities as conferences and other large gatherings occupy a hybrid model for many months to come.

SPRING 2021 | DOUGLAS WILSON COMPANIES

Some will not withstand the reduced occupancy and limited travel, however, as special servicers discontinue the extended terms which have allowed some to eke out an existence through the pandemic.

DWC’s partnership with TCOR is ready to serve these hotels experiencing distress. An innovative pairing of DWC’s receivership and workout expertise with TCOR’s operating experience and hotel industry knowledge allows the partnership to serve many functions to those owners and operators who find themselves in need of debt resolution, restructuring and operating assistance. “[DWC] has the experience as a receiver and TCOR [does not], but what we do have is hotel experience,” Corcoran says.

“We have joined forces, with TCOR as a third-party asset manager and Douglas

Wilson as the receiver to provide the hotel evaluation and pick the best manager for that hotel. We develop an evaluation of branding, day-to-day management, capital requirements, deferred maintenance and relay this to the receiver to oversee it.”

The partnership creates a key differentiator: DWC is not a hotel management company that acts as a receiver in order to secure a hotel management agreement, we act as a neutral third-party to hospitality clients.

“Through our TCOR partnership, DWC brings professional, unbiased and objective solutions to each assignment, including which management company is the best match for the asset,” says DWC Chairman and CEO Douglas Wilson. “We’ve served in this exact capacity on more than 100 hospitality assignments.”

A MESSAGE FROM OUR CHAIRMAN & CEO D O U G L A S P. W I L S O N

POSITIONING FOR THE FUTURE. After reflecting upon the alternatives, a few years ago I made a conscious decision (with the input of many others) to actively position the firm for the future. An option had been a sale, but being a family owned business, it was determined that the best long term strategy was to continue to build upon the legacy of the company brand. In order to accomplish this, a key goal was to define the future market position and services offered by the firm that could continue to be adapted to meet the ever-changing economic landscape.

The foundation of accomplishing this goal is simple: continue to hire high quality people with the skills and resources that will ensure that goal is met. Toward that end, we have been assembling a dynamic group of younger, diverse professionals who can build

upon DWC’s national stable of institutional clients and families that we service with our legacy platform.

I personally continue to be motivated by the challenges and opportunities that present themselves on a daily basis. Being surrounded by some of the best and brightest minds in the industry only inspires me further to continue to provide the highest level of service to all of our clients.

All of us at DWC appreciate the importance and depth of our relationships and look forward to working with all of you in the future!

Sincerely,

Douglas P. Wilson dwilson@douglaswilson.com 619-906-4312

Las Vegas

330 E Warm Springs Road Suite B43 Las Vegas, NV 89119

Phoenix

502 South College Avenue Suite 300 Tempe, AZ 85281

San Diego

1620 Fifth Avenue Suite 400 San Diego, CA 92101

San Francisco 50 California Street Suite 1500 San Francisco, CA 94111

Washington, D.C. 1200 G Street NW Suite 800 Washington, DC 20005

Los Angeles/ Orange County 19200 Von Karman Avenue Suite 416 Irvine, CA 92612

For More Information Contact: Douglas P. Wilson dwilson@douglaswilson.com (619) 906 - 4312