Distressed Multi-Family Opportunities Proliferate Primary and Secondary Markets
Market for Discounted Debt and Need for Recapitalization Has Emerged.
- New York, NY (1888PressRelease) October 23, 2010 - Distressed multi-family opportunities are proliferating the primary and secondary markets nationwide as more and more banks seek to shed non-performing assets that cannot qualify for permanent financing, according to Spencer Garfield, managing director of Hudson Realty Capital LLC, based in New York City. These opportunities, as well as financing alternatives, were the recent focus of a panel discussion entitled "Scoping Out the Opportunities in Distressed Multi-Family Properties" at GreenPearl Event's Distressed Real Estate Summit New York.
"The opportunities of today are much different than those originally anticipated, but they are good opportunities nonetheless," said Garfield. "A market for discounted debt, particularly in the middle markets where there is tremendous need to recapitalize Class B and C apartment-rental properties, has emerged."
According to Garfield, bridge loans are being effectively utilized to facilitate the repositioning, re-tenanting or redevelopment of distressed properties. "By bridging the gap between the distressed debt purchase and loan repayment strategy, the asset can be reset and stabilized and value can be added," he said.
Recently, Hudson closed a $9.17 million bridge loan for the acquisition and renovation of a 370-unit garden apartment complex in Texas. The sponsor had acquired the property from a special servicer that had foreclosed on the property. Currently, the 44-building complex is undergoing a major $4 million renovation and modernization.
In addition to addressing bridge financing, stabilizing the property and maximizing value, the conference panel discussed buying at the right price, opening up a viable buyer market through auction and smaller properties and some of today's best geographic buying opportunities.
"Although many institutional lenders are focusing on Class-A multi-family assets in top-tier markets, there is considerable need for capital in the tier-2 and tier-3 submarkets," added Garfield.
Based in New York City, with a northeast regional office in Portland, Maine, Hudson currently has more than $2 billion of assets under management. Garfield, who joined the company at its inception eight years ago, oversees Hudson's new loan originations, business development and business relations and is a sought-after guest speaker.
A certified Minority-Owned Business Enterprise (MBE), Hudson has closed more than $3.5 billion in transactions since the formation of its initial two funds in 2002. The company's business strategy focuses on originating, purchasing, participating in, servicing and restructuring special-situation debt. As a premier real estate fund manager, Hudson also invests directly in real estate and acquires under-performing assets and other real estate-related instruments.
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