Nonperforming commercial/multifamily whole loans trades are evolving as the market becomes more active, according to two executives at local New York/New Jersey specialist Helios Capital.
“We’ve seen some large pools trade at the same mark. But that mark can change significantly on a case-by-case basis, depending on what that pool is made up of: loan size, geographic location, etc.,” senior managing director Jonathan Horn told this publication.
“Our hope is with banks selling big pools of nonperforming loans to private equity funds or institutional funds they will resell pools or pieces thereof back into the market creating a new market benchmark,” Helios capital principal Steven Schultz added in an interview, noting that there has been some reselling in the market.
“With the banks selling off nonperforming loans we hope that the special servicers will follow suit and start to sell off more loans,” Schultz added.
Horn said smaller deals are increasingly being carved out of the larger purchases and sold through a local third party advisor like Helios with the aim of achieving more relatively favorable prices due to their local market expertise. Trades also are being done through platforms. Larger deals are being done in some cases directly.
The two executives added that most deals in the market are done on a cash basis or with other sources of funding rather than modification, and there are needs in some cases for bridge or mezzanine financing.
