tenant-delinquency-workout

A delinquent tenant workout compares cash-for-keys, eviction, and lease restructuring scenarios using NPV analysis. It models state-specific eviction timelines, re-tenanting feasibility, and covenant impacts to identify the financially optimal recovery path for commercial real estate leases.

NPV calculation for a commercial lease workout requires projecting cash flows across three paths: structured workout, eviction with re-lease, and cash-for-keys. The analysis incorporates tenant profile assessment, jurisdiction-specific legal timelines, and covenant risk to produce a recommended course of action.

State-specific eviction timelines directly impact delinquency recovery by altering cash-flow projections and NPV outcomes. The workout analysis applies jurisdiction-aware legal schedules to each scenario, ensuring accurate modeling of vacancy duration, re-tenanting delays, and overall financial recovery.

Covenant risk and environmental considerations for specialty restaurant tenants are modeled within the delinquency analysis. It evaluates specialty-tenant modules that address re-tenanting feasibility, environmental cleanup costs, and covenant implications specific to restaurant or specialty commercial spaces.

Cash-for-keys is optimal when its NPV exceeds the workout or eviction alternatives, often due to lengthy jurisdictional eviction timelines or high re-tenanting costs. The three-scenario comparison identifies the threshold where an immediate payout outweighs prolonged legal recovery.

Commercial tenant delinquency analysis includes specialty-tenant modules for restaurant spaces to address unique re-tenanting feasibility and environmental considerations. These modules evaluate factors like grease trap removal and kitchen retrofit costs that significantly affect the NPV of eviction and re-lease scenarios.