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In Distressed Buys, Look Before You Leap

NEW YORK CITY-‘Trust nothing’ and ‘verify everything,’ experts advised potential investors in distressed assets during a panel discussion Tuesday.

By Paul Bubny | Updated on June 15, 2010

NEW YORK CITY-Bruce Stern, principal of Red River Asset Management, has four rules that he believes any real estate transaction must follow: don’t lose money, don’t lose money, don’t lose money and make money. Since a fair number of deals at the market’s peak failed to adhere to those watchwords, there’s enough interest in distressed assets to drive multiple conferences and panel discussions, including the one in which Stern participated Tuesday.

What there hasn’t been thus far in the cycle is a plenitude of transactions. Some that have occurred, Stern said, have been driven by funds with money to burn that bought too early and paid “stupid prices” as a result. Jumping the gun on a distressed buy was one of the three general mistakes Stern discussed in his presentation, part of a seminar titled “What You Need to Know (But Nobody Will Tell You) About Buying Distressed Commercial Real Estate.”

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