BH Capital Formed to Target Acquisition of Properties in Debt
Behringer Harvard, a global real estate investment program, has formed BH Capital that will focus on the acquisition of small-balance debt properties sold on the secondary market through individual transactions or portfolio sales.
BH Capital said its investment strategy is to take advantage of the recent economic disruptions to acquire a blend of performing and nonperforming loans secured by commercial real estate or industrial assets.
The Dallas-based firm plans to acquire loans originating from every type of financial institution, including sound, distressed and failed entities. The company will create and manage a series of private, closed-end funds that will be offered to accredited and institutional investors.
“We believe that the next three to five years will offer expanded business opportunities for experienced professionals with proven ability to acquire debt, manage workouts and sell commercial real estate assets in an improving market,” said Michael McKinney, CEO of BH Capital. “We have established a management team that brings to this new venture a wealth of focused, disciplined experience in debt acquisition, portfolio management and disposition of acquired debt and collateral assets.”
The firm is optimistic that it will be successful because they are anticipating loan sales to increase as the Federal Deposit Insurance Corp., which manages asset liquidation for failed member financial institutions, prepares to bring to market hundreds of billions of dollars of commercial loans secured by commercial real estate or other business assets. Additionally, both stable and distressed financial institutions are likely to increase loan sales as they rebalance their loan portfolios by reducing their exposure to commercial real estate and other overweighted asset classes.
Jay Verdoorn, chairman of BH Capital's board of managers, said the newly launched company brings capabilities that will allow Behringer Harvard the opportunity to diversify and expand the types of investment strategies available to its clients and partners.
The management team is comprised of six executives who have worked at a major wholesale bank that is active in the secondary loan market. The team consists of Michael McKinney as the CEO, Randy Hughes will be the president and COO, Daryl Bird will serve as executive vice president of loan acquisitions, Paul Jankovsky Jr., is the executive vice president of investment strategies, Kevin DeLozier was named executive vice president of portfolio management and Bryan Crow is the executive vice president of finance and reporting.
As a team, these individuals have acquired, originated, managed and sold more than $17 billion of commercial and residential loans.