Buyers Take Straight, Narrow Course

MIAMI—Buyer and sellers are coming closer to the same page after five years of low-yield alternatives. Will they meet in the middle this year?

GlobeSt.com caught up with Randy Banchik, EVP of Los Angeles-based Westwood Financial Corp., to get his thoughts on the narrowing gap between owners and investors. Click here to read part one of our exclusive interview.

GlobeSt.com: In what areas is your firm focusing its energies and why?  

Banchik: We have been focused on buying secondary core and non-core distressed real estate and notes, as we believe that these assets have the best opportunity for near term appreciation achieved by skillful management techniques, and our capital sources have remained true and flexible to help us with our mission to achieve profitability in a still choppy investment environment.  

GlobeSt.com: How have buyers' attitudes or strategies changed over the past 12 months? And how are they likely to change throughout the course of the year?

Banchik: After five years of low-yield alternatives, it seems that buyers have acquiesced to the attraction of yields driven by low borrowing rates, and many are taking the straight and narrow course to buy justifiable assets that they believe will be stable based on current cash flow, while others are really stepping out of the box up the risk curve to find new ways to participate in the waning distressed market.

GlobeSt.com: How have sellers' attitudes or strategies changed over the past 12 months? And how are they likely to change throughout the course of the year?

Banchik: As prices have continued to improve, it is increasingly compelling to be a seller. Much of the product offerings that we have seen over the past few years have been driven by lenders, and those sellers seem to have shifted to a more entrepreneurial mindset, utilizing the marketing tools and sales platforms that have been developed to greater advantage. “Exchange sellers,” however, might feel caught “out of the frying pan, into the fire” due to limited compelling exchange opportunities on the buy side.