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

The firm had its eye on certain assets in a portfolio of non-performing loans held by a financial institution on Long Island, NY. It quickly found, though, that the bank’s price expectations were too stringent, so it gave up. Then, the bank merged with another institution, so Heicklen’s client tried again and found the new ownerships more amendable to a sale.

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

However, the most recent and interesting change is illustrated by Heicklen’s client’s original desire: to buy just a few assets from the bank. This particular trend is gaining traction in a number of markets such as Georgia, according to Maxine Hicks, a member of Epstein Becker Green in Atlanta. “We are seeing this more and more—companies trying to cherry-pick certain branches of distressed regional banks.”

For the full story, please visit Distressed Assets Investor.