REO Sales Maintain High Profile with $221M Portfolio Offering
- Feb 12, 2009
Less than two months ago, CPN reported that real estate owned (REO) sales may be a driving force in sales volumes rebounding in the coming year. Sperry Van Ness brokered an REO deal just a couple of weeks ago and now Mission Capital Advisors L.L.C. is hoping to get bids for a $221 million commercial mortgage loan and REO portfolio secured by assets in multiple states. The commercial real estate mortgage loan and REO portfolio has an outstanding balance of $221.3 million. The sale includes assets in bankruptcy and sub- and non-performing assets secured by a variety of collateral types including hospitality, industrial warehouse, retail, office, multi-family, residential condominiums, retail condominiums, townhomes, and commercial and residential development land throughout Arizona, Florida, Nevada, Texas, Georgia, Alabama and Louisiana. On Jan 29, CPN reported that Sperry Van Ness–acting on behalf of Stillwater Capital and partners–closed the sale of the 131,900-square-foot Voice Road Plaza in Carle Place, N.Y., to a 1031 multi-family investor for about $36.2 million, including the assumption of a $23 million mortgage. Occupying 8.3 acres on Long Island, Voice Road Plaza was developed in 1951 and renovated in 1996. In December 2006, Stillwater, along with two operating partners, snapped up the property from First Allied Corp. for nearly $35.4 million, with plans for a short-term hold. Vacancy at the property–anchored by Staples, Big Lots, Party City, Dress Barn and Bass–reached its current level of 98.8 percent. Then the tide turned. The seller had put the community shopping center up for sale through another broker before turning to Sperry Van Ness, which originally marketed the asset with a price tag of $41 million, before lowering it to $39 million. After 10 months and 175 sale packages, Sperry Van Ness found a buyer represented by Double-Click Realty. Considering that Stillwater purchased Voice Road Plaza in 2006, and sold during one of the lowest points in the real estate market in quite some time, the fact that the company walked away with a nearly $1 million profit is somewhat significant. Deals like this may become more common in the coming year. On Dec. 22, Robert Brunswick, founder, president & CEO of real estate investment management firm Buchanan Street Partners, told CPN that he anticipates sales volumes to probably rebound somewhat over the next 12 to 24 months, but noted that this will probably be primarily the result of distressed selling to avoid foreclosure and salvage some equity and/or REO sales. Mission Capital is seeking the bids on behalf of a regional bank that was not named. Acquisitions could be made on individual loan pools, any combination of loan pools, or the entire portfolio. Overall, there are 50 loans or REOs within eight available pools, including 35 loans in Florida, four REOs in Florida, four loans in Georgia, three loans in Texas, and single loans in Alabama, Arizona, Louisiana and Nevada. “In addition to many of the assets providing cash flow to offset operating expenses, the portfolio is divided into several single asset pools, allowing investors to target specific assets by performance, collateral type or geography based on their individual acquisition criteria,” Will Sledge, managing director at Mission Capital Advisors, said in a prepared statement. Founded in 2002 by William David Tobin and Joseph A. Runk, Jr., Mission Capital is a boutique investment banking firm specializing in structuring the sale of performing, sub-performing, non-performing and charged-off residential, commercial, C&I, and consumer loan portfolios.