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MF Pros Team Up to Consult on Distress

Capital providers in the distressed arena now have a new ally in their corners.

By Sule Aygoren Carranza | Updated on June 16, 2009

DENVER-It’s a near certainty that occupancy and rental rates, along with values, for most multifamily properties across the country will continue to dip as the economic downturn puts further pressure on property owners, operators and tenants. This is bad news for lenders and equity players who provided capital to projects and properties in the past several years; with little to no income coming in from the assets, an increasing number of cash-strapped borrowers may have no choice but to default on debt.

For the capital provider, this means either working out a deal with the borrower in question, or foreclosing on the asset. Recently, two industry experts have formed a new company that will provide the services needed to help capital players make these difficult decisions. Based here and in Atlanta, Caldera Asset Management is a national consulting firm focused on the multifamily industry. Its founders, Mike Kelly, president, and Bill Leseman, who will serve as chairman, bring decades of asset management experience, during which they closed more than $5 billion in transactions.

According to Kelly, he and Leseman had been providing services to lenders and equity providers for several months before they decided to formalize the offering. “It became very evident a few months ago when the calls kept coming in that different clients were having different issues regarding their apartment needs,” he explains. “A lot of them weren’t immediate; they were trying to figure out how to address problems, how to refinance the deal, how to address the equity partner, etc. We figured we should formalize the company and go out there and try to solve client problems they have ahead of them, and most certainly will be ahead of them in the next couple of years.”

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