Real estate investment firm Madison Realty Capital has grabbed a portfolio of New York City loans from a regional savings bank. The portfolio, secured by 11 Manhattan properties and 14 Brooklyn properties, is valued at $28.7 million and consists of 15 notes.
The loans in the portfolio were originated between 2006 and 2009.
Joshua Zegen, co-founder and managing principal of MRC, told The Commercial Observer that the Manhattan properties were located in Hamilton Heights and west Harlem. “A number of the properties we got deeds and debt—we bought the debt but it came along with the deeds to the property as well at closing,” he said in reference to the upper Manhattan portion of the portfolio. Those number 125 apartment units and will be managed by Silverstone Property Group, the property and asset management arm of MCR. He said that they were working at the moment to maximize value on them.
The 14 Brooklyn properties are in Park Slope, Carroll Gardens and Bed Stuy.
In many cases, MRC restructures the deal back to the borrower, but Mr. Zegen said that his firm was uniquely positioned should this not be the case. In cases where it takes ownership, Silverstone is ready to take over management and reposition the buildings. “In many of these deals we won’t own,” he said, “and obviously we’re very happy to be paid off.”
Since 2010 MRC has closed over $150 million in distressed debt transactions with more than 10 banks. Mr. Zegen said that he sees more distress on the horizon as well.
“In the recent 12 months a lot of the deals have this kind of a restructuring or recapitalization component,” he said. “I see that happening more and more because some of the smaller banks—finally their balance sheets have strengthened—and so they have the ability to write down assets and sell loans at some sort of a discount.”