MIAMI-First Market Properties, a real estate companyspecializing in buying and selling distressed assets, purchased$15.6 million in multifamily debt on August 3. The all-cashpurchase was for non-performing loans on 17 properties inMiami-Dade and Broward Counties.

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The seller was J.P. Morgan Chase, according to industry sources,who also estimate that the debt was purchased at an approximately50% discount.

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Now that First Market Properties, which has offices in Floridaand New York, has purchased the loans, the firm plans to sell themto other investors or finish foreclosing on the properties and sellthem, says Aaron Kurlansky, head of South Florida acquisitions forthe firm.

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Alternatively, says Kurlansky, First Market Properties couldwork out deals with the borrowers to give the firm deeds in lieu offoreclosure, or they might qualify for a forbearanceagreement. “We could either lower their interest rates ormaybe the principal,” but they would first have to show that theyhad sufficient cash flow, he says.

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The loans which First Market Properties bought run anywhere from$300,000 to $3 million and the borrowers are mostly smaller localinvestors, says Kurlansky. The properties, which have from five to40 units each, were built within the last forty years, he says. Berger Commercial Realty Corporation in Ft. Lauderdale is oneof the brokers which First Market Properties is planning to use tosell the debt or the properties, he says. The company was areceiver for many of them.

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“This transaction shows that the market for non-performing loansis still strong for experienced buyers who have the ability to workwith banks on all-cash deals which can close quickly,” saysKurlansky. First Market Properties closed on this deal within twoweeks, he says.

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