Bankers' headaches can be brokers' gains.

Throughout the eighties, when the real estate market was booming, investment in one development project after another was common practice by a wide variety of industries. Large companies, banks and lending institutions all tried their hand at the market, creating internal real estate departments to manage these investments.

At the same time, financing a real estate deal was easier than ever before - banks were all too happy to make money available. But then came the crash, from which the industry is still struggling to recover and many companies were left holding office properties they never intended to keep. Or investment properties that had always been at 90 percent occupancy were struggling to remain even 50 percent occupied, as the Northeast was glutted with millions of square feet of new, suddenly inexpensive office space that had to be filled in a severe recession.

Faced with dramatically increased volumes of properties that needed to be refurbished, managed and marketed, banks and lending institutions began turning to outside corporate real estate specialists for their expertise.

As the market slump continued, these financial institutions found a steady stream of distressed properties under their supervision, with understaffed OREO departments to manage them. This situations creates a unique opportunity for the real estate community.

If managed properly, the banking industry's headache can be the real estate industry's gain, providing a wealth of new clients for the brokerage firms. The Office Division of the Charles Klatskin Company has just the resources that banks and lending institutions need, and has experienced a flurry of activity as the financial community turns to brokers to sell or lease the increasing number of distressed properties on their books. By understanding the special needs and concerns of the banking industry, brokers can make a difficult situation profitable for both parties.

Some banks prefer to take advantage of the buyer's market, and will sacrifice price in order to remove the "troubled" property from their portfolio by selling a property at greatly reduced rates. These circumstances are ideal for a tenant attracted by the lowest prices in years, and looking to purchase a property, either for their own use or as an investment.

For example, when Midlantic Bank was left holding a vacant lot in River Edge, NJ, Michael Falk and Stephen Figurelli of the Charles Klatskin Company employed this strategy and found the ideal location for NJ Transit, which purchased the property for expanded commuter rail service and parking at the North Hackensack station.

Other lending institutions are more inclined to ride out the slump, waiting to sell properties at a higher price. In these cases, brokers can be a valuable resource in leasing up the properties, which are often taken back with high vacancy rates. For instance, Phoenix Home Life Mutual Insurance Company took possession of two office buildings - a 64,000 square-foot building at 1086 Teaneck Road, Teaneck, NJ and a 36,000 square-foot building at 57 Willowbrook Boulevard, Wayne, NJ - both of which were almost completely vacant. Jeffrey Prezant of the Charles Klatskin Company was called in to generate leasing activity, and both are now almost 80 percent occupied. Thus, a full tenant roster enables the institution to maintain the property until a sale would be more profitable.

A similar trend can be seen to a lesser extent industrial real estate market, where Klatskin was enlisted by United Jersey Bank to sell a 78,000 square-foot building at Interchange 8A of the NJ Turnpike. C. Robert Lonshein of the Charles Klatskin Company located the perfect purchaser - Eastern Tea Corporation, who will be using the building as a distribution center.

Paul Meier of the Charles Klatskin Company recently experienced the same successes when he sold a 68,500 square foot building located at 65 West Sheffield Avenue, Englewood, NJ for Midlantic National Bank.

In order to remain profitable, real estate companies must continually search for new ways to generate business, particularly in a soft market. The elimination of internal real estate departments at many banks and financial lending institutions creates an opportunity for former competitors to work together for mutual benefit.

Charles Klatskin is the founder and President of the Charles Klatskin Company, one of New Jersey's premier commercial/industrial real estate companies, with more than 30 years of experience. Klatskin specializes in commercial real estate development, management, brokerage and consulting for corporate and industrial clients throughout New Jersey and New York's Rockland and Orange Counties.