Mountain Real Estate Capital Acquires Bank-Owned Property
A fire that destroyed a five-story condominium building in August 2010 just two days before the original closing date did not hinder Mountain Real Estate Capital from acquiring the distressed property this March from Capital One Bank.
Peter Fioretti, CEO of Charlotte, N.C.-based MREC, said the company was still interested in buying the property, known as Carriage Park, because of the opportunity to build 144 entitled home sites in Bound Brook, N.J.
“When the property burned, we needed to resolve several substantial challenges,” Fioretti said. “The bank patiently worked with us towards our common goal, which also required cooperation from the Borough of Bound Brook to modify development and other agreements, which we greatly appreciate. We can now focus on this project in this vibrant community.”
Arthur Nevid, CIO of MREC, who also heads the company’s bank portfolio acquisition program, concurred with Fioretti that there was never any inclination to not purchase this site.
“As a result of the fire and everything that was affected by it, Carriage Park turned out to be one of the more challenging REO acquisitions we have undertaken,” Nevid said. “Our company was founded in New Jersey and we were determined to re-enter the market—abandoning this opportunity was not an option. We are extremely excited to move forward with this acquisition, and we are speaking to other New Jersey banks about additional potential REO and note acquisitions.”
After the fire occurred, MREC had to work with Kalian Companies of Red Bank, which represented the bank in the sale of the property. Both sides operated together over the last seven months to manage the demolition, get insurance submissions, and finalize the purchase of the property.
“We have always believed, and still do, that Carriage Park will prove to be one of the premier multifamily projects in the state,” said Patrick Kalian, president of Kalian Companies. “What was required as a result of the economic turndown was a strong capital commitment and shared vision, both of which we knew Mountain would have based on our dealings with them over the last 15 years. Within days of introducing them to the bank, a deal was struck. When the fire gave Mountain the right to walk, they instead worked with the bank to close, and we are thrilled they did.”
MREC plans to invest $1 billion in bank REO/NPL focusing on acquiring or restructuring residential development projects for existing borrowers. Recently, the company has acquired more than $630 million of loans/assets from 20 different banks, totaling approximately 8,000 lots and an additional 7,500 acres of developable land.