The portfolio is owned by a large San Francisco multifamily owner/operator that acquired and financed them at the top of the market in 2007 and 2008. As a result, the properties, which have been more than 93% occupied since 1996, "are over-leveraged and are not currently performing," CBRE Capital Partners says in its description of the deal.
According to Frank Scavone, COO of the Capital Partners' funds, the disposition strategy for the portfolio is to pursue a mix of discounted payoffs with the borrowers and short sales to third-party buyers, as well as foreclosure. Capital Partners tapped Coastal Capital to work through the assets and oversee the day-to-day operations of the properties under Capital Partners' direction.
The transaction was sourced through CB Richard Ellis Capital Markets, notes Jenna Gerstenlauer, managing director in charge of credit. Gerstenlauer says that Capital Partners' commitment and certainty of closing in such a short period of time were major factors in winning the deal.
CBRE Capital Partners operates a debt investment platform that targets the commercial real estate distressed debt market. Its platform includes programs that focus on the origination and acquisition of traditional conservative first mortgage investments, as well as higher-risk programs that focus on distressed debt and mezzanine investments. It is a unit of CB Richard Ellis Investors, an independently operated affiliate of CB Richard Ellis Group.
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