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$307M Loan Pool Comes to Market

NEW YORK CITY-Assets with positive cash flow dominate the CMBS-driven pool; the Carlton Group's McCarthy says we'll be seeing more of that this year.

By Paul Bubny | Updated on February 03, 2010

NEW YORK CITY-The Carlton Group has been retained on behalf of various CMBS trusts to sell a $307-million pool of 66 non-performing loan and REO assets, says chairman Howard Michaels. More than 40% of the assets are retail, “a higher concentration than we’ve seen,” managing director Tom McCarthy tells GlobeSt.com.

In terms of dollars, that means about $136 million of the $307-million pool is retail, such as a 471,444-square-foot enclosed regional mall in Texas, and McCarthy says the entire pool is dominated by assets that are up and running. “In any bank portfolio, you might find a healthier mix of broken condominium loans and REO, as well as development and land transactions,” he says. “Whereas this sale is almost all vertical assets.” He adds that there will probably be more vertical assets coming up for sale than there have been previously.

Most of the assets–which also include about $88 million of multifamily–are generating positive cash flow, although perhaps not to the degree they were before, McCarthy says. “They run a cross-section from no duress to where the occupancy and rent rolls are down and they’re struggling.” Not surprisingly, there’s an emphasis on assets in states “hit a little harder than others” by the recession, including Michigan and Ohio, although some from healthier markets such as Texas and New York.

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