WASHINGTON, DC-When asked about latest trends in distress realestate investment, Wayne B. Heicklen, co-chair of the real estategroup with New York law firm Pryor Cashman, talks about the backand forth negotiations between a troubled bank and an eager privateequity investor over a few distressed assets.

The firm had its eye on certain assets in a portfolio ofnon-performing loans held by a financial institution on LongIsland, NY. It quickly found, though, that the bank’s priceexpectations were too stringent, so it gave up. Then, the bankmerged with another institution, so Heicklen’s client tried againand found the new ownerships more amendable to a sale.

But the private equity company’s original idea of acquiring justthe best assets as a group? Not so fast. “The private equitycompany started out bidding on the particular assets it wanted butit was quickly pushed into buying the whole portfolio,” Heicklensays. In many ways this transaction represents current trends inthe industry, starting with the power that holders of distressedassets still wield in the market. That equation, though, can changeas more troubled banks seek out acquiring partners to keep themsolvent.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.