Clemente Forms Distressed RE Fund

C. Daniel Clemente, chairman and chief executive officer of Clemente Development Co., has announced the formation of a private equity fund to take advantage of investment opportunities in income-producing commercial real estate created by global financial disarray. The fund has $200 million in commitments, and Mr. Clemente said he is negotiating to leverage the commitments to $2 billion. "With mortgage underwriting standards for commercial real estate tightening and capital availability becoming constrained, defaults are sure to occur upon maturity of loans closed between 2002 and 2007," he said. Mr. Clemente said he believes that, in 2009, asset values will be lower, underwriting standards will be more conservative, and capital will not be readily available to bail out syndicators that overpaid for buildings.