The end of “extend and pretend” is here. Five-year loans from the 2021-2022 market peak are maturing into depressed values, and lenders are no longer waiting for conditions to improve.
For OneWall Communities, that means most of the deals crossing the desk right now share one profile. As CEO Ron Kutas puts it: “Most of the deals that we are being asked to take a look at, especially by lenders, are ones where loan maturity has already happened or is coming up through the end of 2026.”
These takeovers are rarely clean. When an asset has been financially propped up for two years, vendors are the first casualty. “First you have vendors who are doing the work, and now the owner is aging their payable,” Kutas explains.
“It takes them a few months before they realize they’re not getting paid, and then they stop the work.” Deferred maintenance piles up, and the property enters what he calls the death spiral: “Services are not being provided, so the good paying residents are leaving. The only ones left are the ones that aren’t paying.”
The biggest mistake new owners make? Underestimating the clock. “It takes 90 days just to get your arms around the asset and understand what the real problems are,” Kutas says. “It takes another 90 days to figure out what the actual plan is, and then a year to execute on it. It’s not a quick turnaround.” No operator, he is quick to add, has a silver bullet.
OneWall Communities starts with curb appeal, the first thing a prospect sees, then works unit by unit in step with market demand rather than spending all the capital at once.
It is a disciplined, sequenced approach to value-add that only comes from a vertically integrated owner-operator background in workforce housing.
Property management is complex, and the best solutions come from shared incentives. Whether you’re exploring new approaches or facing specific challenges, we’re here to talk. Visit us at onewallcommunities.com or call us at (646) 596-7068.