HOUSTON-Continuing its southwest push and making its first move into Texas, First Market Properties LLC acquired a non-performing mortgage on the 338-unit Stonehaven at Galleria. The note contained an $11-million balance, and FMP acquired it at a discount of approximately 50%.

Aaron Kurlansky, vice president of the New York City-based FMP, tells GlobeSt.com that his company typically takes ownership of assets following purchase of the loans. The next step is to rehab and reposition the asset. “Then we make a judgment call on whether to sell the property or keep it in our portfolio,” says Kurlansky, who operates from the firm’s Miami, FL office in his efforts to boost southwest acquisitions.

Stonehaven at Galleria is at 6419 Skyline Dr. The 43-year-old asset is in a good area, Kurlansky says, but the property itself was overleveraged, a common issue in today’s markets. “We have to put in some work on aesthetics and there are some units that are down from previous weather--" in other words, Hurricane Ike, which came ashore near Houston in September 2008. Furthermore, Stonehaven will be repositioned in an effort to bring up both occupancy and rent. Newport Property Ventures, located in Florida, will handle the construction, repositioning and management. Earlier this summer, FMP made its first push into Phoenix, buying the mortgage for the 301-unit Pine Ridge Apartments. That loan had a balance of $6.5 million.

FMP pursuing more opportunities, especially in the southwest. But Kurlansky cautions he isn’t looking to buy up paper willy-nilly. The condition of the asset is important, he points out. “We don’t want to buy assets that are 100% vacant and boarded up, where we’d have to be the developer,” he explains.

The sweet spot for this company, he continues, is underperforming properties that could use new ownership, new capital infusion and a new lease on life. The fundamentals have to work, too--the locations of these assets need to be strong rental markets. Right now, FMP is focused on multifamily assets. However, “we’re slowly starting to extend our efforts into retail,” Kurlansky says.