(To read more on the multifamily market and the debtand equity markets, click here.)

IRVINE, CA-The Bascom Group, which started out 10 years ago byturning around troubled apartment buildings, has now turned itsattention to troubled loans in the multifamily sector. Bascom andNew York City-based Warburg Pincus Real Estate I have launched a$200 million fund to invest in non-performing loans and distressedmultifamily properties.

Bascom co-founder Jerry Fink says that some borrowers ofhigh-interest-rate conduit loans that originated in the 1990s "arestruggling" to repay loans due to high defeasance costs andconcerns over high loan-to-value ratios. According to David Kim,also a Bascom co-founder, the new venture with Warburg Pincuspresents a value-added opportunity for Bascom while offering loanoriginators and note holders a chance to "quickly and seamlesslydispose of distressed assets" because the new fund can close on anall-cash basis.