First Market Properties Acquires Note for Distressed Apartment Complex
For the second time in the summer of 2011, the investment firm First Market Properties has purchased the mortgage on a distressed multifamily asset in Phoenix.
The note, which has a balance of about $5 million, was bought at a discount of approximately 30%.
“Our business primarily is to help banks and other lenders clean their balance sheets of poorly performing mortgages quickly and efficiently so they can improve earnings and avoid the prospect of foreclosure,” said Aaron Kurlansky, vice president of First Market Properties, Miami. “Few, if any, lenders are properly equipped to become owners of troubled properties.”
The 256-unit property known as The Cove on 44th Apartments is more than 90% occupied. The complex comprises studio and one-bedroom apartments with balconies. It also has two swimming pools and a clubhouse.
“The property encountered financial trouble mainly because it was overleveraged,” Kurlansky said.
Kurlansky said there has not been a decision on whether the firm will take possession of the property itself.
In July, the firm took possession of the 301-unit garden apartment complex called Pine Ridge by deed-in-lieu of foreclosure. This mortgage acquisition was purchased at a discount of more than 50% with a loan balance of $6.5 million.
Kurlansky said the firm has plans to expand its distressed assets acquisitions throughout the Southwest and will also make investments on the West Coast.
“The firm's special expertise is in evaluating collateral, closing quickly and working to maximize the value of assets,” Kurlansky said.