BOSTON-KDX Ventures, a joint venture between DebtX and KEMA Advisors is selling a $234-million portfolio of multifamily and healthcare loans for the US Department of Housing and Urban Development. Consisting of 18 multifamily commercial real estate loans and three healthcare loans, they range from $1 million to $44.3 million.
The collateral for the portfolio is located in Arizona; Connecticut; Washington, DC; Florida; Kentucky; Michigan; Minnesota; North Carolina; Ohio and Rhode Island. Bids can be made on individual loans or regional loan pools, with no mixing and matching. The auction will take place at 1:00pm Eastern Standard Time on Thursday, September 9th.
DebtX CEO Kingsley Greenland tells GlobeSt.com that they expect a lot of interest since this portfolio boasts a large amount of multifamily loans, which tend to have a deep investment base than healthcare, simply because of their income-producing potential.
Generally, these auctions are rather well-received he notes. KDX's auction in April sold $306 million of non-performing multifamily and healthcare loans for HUD with12 winning bids out of 67 total. "HUD is recognized as a professional entity that is experienced in this process," Greenland explains. "Whenever you have a repeat seller who demonstrates that they understand value, investors tend to bid a little bit higher because they know that the assets are going to be sold. They know it's not a wasted exercise."
KDX puts bidders through a rigorous approval process to keep pretenders out of the process. " If you are qualified, you can get in, but it takes work to get in," Greenland tells GlobeSt.com "You can't just sit in your jammies and put in your Hotmail account and get in." Bidders will need to prove that they are experienced in the process, as well as the machinations of the secondary markets, having solid financials and references. This is particularly important with popular portfolios such as this one.
"The buy-side is very deep and ranges from local investors to national players and institutional capital," he notes. "The common thread is that have to be sophisticated and accredited. "
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