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WOODBRIDGE, NJ-With a focus on trading small-balance, non-performing commercial loans, Helios Capital LLC has completed $30 million in deals in its first seven months of operation. The local company, an affiliate of Onyx Equities, is run by two former New York City-based private equity fund managers.

Launched in January, the firm concentrates on matching up local and regional banks that want to get non-performing whole loans between $1 million and $50 million off their books with local buyers. It serves the New York Tri-State area and Florida.

Jonathan Horn, senior managing director, tells GlobeSt.com that there is still a wide distance between buyers and sellers, particularly the larger institutions that are unwilling to write-down their paper by a significant amount. Yet by bringing in a local player that gap can be narrowed. “Guys who own in a certain marketplace see more value and can afford to pay a bit more,” he says. “We find local strategic guys, and go after banks in that market. Our buyers are more of the loan-to-own guys who want to buy the debt and own that asset.”

In one of its deals, Helios structured the sale of a 24-unit multifamily building in New York City for $2.4 million. The transaction involved the sale of the Harlem property’s debt as well as the deed-in-lieu for the building, thereby giving the buyer a fee simple interest in the property at 301 W. 151 St. “The buyer was perfect for the building because he owned an asset four blocks away and already had a management team in place,” says Josh Malka, Helios’ managing director. “He had a plan to turn around the asset quickly.”

Among the firm’s other deals was the sale of a $2.3-million note backed by a 35-unit multifamily building in Wenonah on behalf of a local bank, as well as a $3.5-million loan sale on a mixed-use property in Brooklyn, NY that features five residences and 5,000 square feet of medical office space. That paper sold “at a compelling discount” to one of Helios’ private investor clients.

Helios works either on a fee or retainer basis, depending upon the specifics of the deal. Transactions are not widely advertised. “These banks don’t want to be out in the market marketing their loans because that could create a false sense that the bank may be in trouble and cause a deposit problem,” Horn states. “So what we do are quiet, off-market deals that are specific to our accounts needs. We find a deal, the banks tell us where they are prepared to write it down to, and we either meet that mark or we pass.”

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