JV Joins Crowd Looking at Distressed Asset Acquisition

Preparing for the recovery of the commercial real estate industry, a joint venture called Cofinance-RiverOak Realty Partners formed with a goal of gathering “opportunistic real estate acquisitions” in the Northeast corridor from Boston to Washington.

The joint venture is the combination of Cofinance Inc. of Hackensack, a subsidiary of Cofinance Group of Luxembourg, and RiverOak Investment Corp. L.L.C. of Stamford, Conn.

The new entity is well-funded, ready to make deals and currently exploring potential acquisitions of multifamily, office, retail, industrial and hotel projects, according to information released by the joint venture, with special emphasis placed on distressed situations requiring intense property and asset management.

“We have some experience with Cofinance. (Cofinance President James J. Maurer) and I actually worked together at two other locations,” RiverOak managing director Stephen DeNardo (pictured) told CPN. “So I know what Jim and his organization are capable of and vice versa. These things take a little while to get going and we wanted to put this in motion now in preparation for what we hope will be some decent assets coming on the market in next six to 12 months.”

The venture has readily available capital to target acquisitions that range from single asset deals between $15 million and $50 million, to portfolio purchases in excess of $100 million, according to information from the joint venture. It will seek low leverage debt 50 to 60 percent at the property level.

DeNardo said the joint venture plans to work mostly in the Northeast because it is an area both are most familiar with. “I think the kinds of assets we’ll look for, to a great extent, will be office. I think the New York Metropolitan area will be good hunting,” he added.

This isn’t new territory for investment firms, CPN reported this month at least two other entities created to deal with adverse investment situations on net lease properties. On January 14, CPN reported that real estate brokerage and advisory firm Calkain Cos. established a new division aimed at aiding clients in dealing with adverse investment situations on net lease properties. The group, dubbed Calkain Opportunity Services, was formed as a result of the increase in debt restructurings, failed investments and transaction-related litigation in the current environment of economic turmoil.

On January 9, CPN reported that Place/BV Student Housing Fund L.L.C. is setting aside approximately $50 million to acquire pre-distressed, distressed and foreclosed student housing properties. With leverage, the fund will have about $150 million to shop the market under the management of BVP Managers L.LC., a joint venture involving Place Properties L.P. and Blue Vista Capital Management L.L.C.Cofinance-RiverOak Realty Partners combines the collective talents and experiences of the two organizations including underwriting, acquisition sourcing, due diligence, financing, property management, asset management, leasing, portfolio management, disposition, syndication and investor management across all of the targeted asset types.

Headquartered in Stamford, RiverOak Investment Corp., L.L.C. is a real estate investment fund sponsor that works with high net worth investors. Cofinance Inc, a Cofinance Group company, is an investor in and a developer of residential, office, industrial and retail projects throughout the United States. Formed in June of 1983, Cofinance has completed acquisitions during the past 36 months in New York City, Northern New Jersey and Sarasota County Florida totaling $140 million.