Protecting distressed Real Estate: What lenders should look for in a receiver

When a commercial real estate asset becomes distressed, lenders may need to take a more active role in protecting its value. Appointing a receiver can provide greater oversight, but selecting the right person or team is critical to ensuring the asset is managed effectively and positioned for the best possible outcome. Ahead of IMN’s Bank Special Assets West, September 9-10th 2026, we spoke with Rick Levin and James Paul, with Alps Group, delving into receivership, and when they may be appropriate, what lenders should consider when choosing a receiver, and how the right approach can help stabilize and maximize the value of a distressed asset.

Qualifications should come before cost

Before appointing a receiver, lenders should first assess whether receivership is the appropriate course of action and whether there is still an opportunity to work with the borrower toward a resolution. Open communication can be an important factor in determining whether issues can be addressed without taking further action.

When a receiver is required, lenders are advised to prioritize qualifications and relevant experience over cost alone. A lower hourly rate can ultimately prove more expensive if a less experienced receiver takes longer to resolve complex issues. Selecting a receiver with the right expertise and resources can help ensure the asset is managed efficiently while protecting its long-term value.

The scope of the role should also be considered. Depending on the property and circumstances, a receiver may need to oversee tenants, property management, construction, maintenance and court requirements. Reviewing a candidate’s experience and understanding how they have handled comparable situations can therefore be critical to the selection process.

The team behind the receiver matters

The capabilities supporting the receiver can be just as important as the individual appointed to the role. Complex properties can require significant operational resources, particularly where multiple tenants, owners or income streams are involved.

A lender’s own internal resources should also be taken into account. While a bank employee may be familiar with the loan and property, they may not have the specialist construction, property management or on-site expertise required to address issues as they arise.

For this reason, the cost of receivership should be considered alongside the potential value of professional oversight. Addressing maintenance issues, managing tenants and stabilizing operations can help protect an asset from further deterioration and support a stronger eventual sales outcome.

Creating opportunities to maximize value

Receivership does not necessarily mean taking a distressed property to market in its existing form. Assessing the asset carefully can reveal opportunities to improve its value or broaden the pool of potential buyers.

Depending on the circumstances, a conventional sale or auction may provide the most appropriate route to market. Auctions can offer greater transparency and a faster sales process, while also giving the market an opportunity to establish what an unusual or difficult-to-value asset is worth.

One example discussed by Alps Group involved three high-end vehicle storage units that had been combined into a single property. Rather than immediately accepting the existing configuration, the team explored whether subdividing the units could generate a stronger return.

The possibility of that change encouraged interested buyers to increase their offers, ultimately allowing the property to be sold in its existing configuration at a stronger price. The example demonstrates how evaluating different options can create leverage and preserve flexibility during the sales process.

Taking a proactive approach to distressed assets

The role of a receiver can extend well beyond simply overseeing a property until it is sold. For lenders, having the right expertise in place can provide greater visibility into the condition of an asset and the options available for resolving the situation.

As commercial real estate conditions continue to evolve, distressed assets can present increasingly complex challenges. Whether the appropriate strategy involves stabilization, a conventional sale or an auction, selecting a receiver with the relevant expertise and supporting resources can help lenders protect value and make more informed decisions.

Hear more from Rick Levin and James Paul at IMN’s Bank Special Assets West, taking place September 9–10, 2026, in Chicago. The event brings together the entire ecosystem involved in special assets, credit and distressed commercial real estate to delve further into these topics.

Watch the full conversation to explore the full exclusive industry insights: