Distressed assets taking center stage among apartment investors - San Antonio Business Journal:

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Now, buyers are looking for something abit uglier. Of the handfupl of investment opportunities that exist in the localapartment market, those assets moving to the top of list these days are the so-called distressed assets, industr y brokers say. Specifically, the cream of that crop are bank-ownesd assets, or REO (real estate assets — foreclosed properties that have gone back to the Also falling intothe “distressed” category are apartment propertiesd put on the market due to the owners’ financial dire straits.
Phoenix and Miami have seen a deluge of REO dealzs over the past18 months, according to Caseyg Fry, an associate with the San Antonio/Austin office of Atlanta-baser (ARA). The first wave of these properties have now surfacede in San Antonioas well, Fry The city’s relatively stable economy makes it unlikelty that the local market will see as many of thesee REOs and distressed property sales as other metros, but as Fry pointxs out: “There will be more to come.
” While transaction velocityy in San Antonio has slowed considerably over the past two there is the likelihooe that more apartment communities will come to marketf — as more owners find themselves needing to adds Will Balthrope, a member of the Balthroper Group of the . Balthrope’ s partner is Ryan Epstein, who is basesd in San Antonio. Balthrope’s office is located in Looking back over the past year athis team’s property assignment s — including those that have alreaduy changed ownership, as well as those still for sale about 90 percent of these propertiezs were being sold by ownersx who had found themselves in financial trouble.
Or as Balthropw puts it, these were ownerd who had “compelling reasons to sell.” What’s the attraction of distressexd assets? Sums up Balthrope: “The opportunitt to profit in a time ofvalur change.” Words like “distressed” and “REO” are like big signs on the assey that say, “Come look at me!” Balthropw says. And for every ownerd that has a compelling reason to there are myriad buyers anxiouslyu waiting to take advantage of a good observesPatton K. Jones, managing director of ARA’ s Austin office. So who are the buyers now?
According to Jones, it’s all privatde money these days — or what he calle “country club money.” “The institutiona l investors are gone,” says Jones, adding that most of these playeras — names like and — have fallen on tougg financial times. “Now it’s the privater investors who are going to theircountrh clubs, to their friends and family and raising It’s a lot of new bloodd coming in, Fry says. “The buyers out they are not on ourregularr Rolodex,” he adds.